Increased Education Spending Won’t Boost Teacher Pay

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One of Biden’s major campaign promises was to triple Title I funding—federal funding for disadvantaged students—in order to deliver substantial pay raises for teachers. Unfortunately, his attempt to do so likely won’t succeed.

The United States already spends more on public education per student than almost any other developed nation in the world.  Yet, the U.S. does not make the top of the lists for teachers’ salaries, lagging behind nations like Ireland, the Netherlands, Germany, and Canada—which also spend less per pupil.  It is worth asking why isn’t this country’s education funding making its way to teacher paychecks?

The answers are multiple but, a few problems stand out; large administrative staff and non-teaching workforces, huge numbers of school districts and costly retirement systems that divert dollars away from classrooms, and have kept teachers’ wages relatively flat for decades.

Some experts argue that teachers in the United States are sufficiently paid already. For example, Andrew Biggs of the American Enterprise Institute makes a forceful case that such popular narratives are myths.  “Teachers rarely quit their jobs and, when they do, rarely cite low pay as the reason,” Biggs notes. However, considering the average teacher salary has barely budged since 1990 while real median income of American households writ large has steadily grown; it is understandable that many teachers feel like they are falling behind.  

Further puzzling is the reality that real per-pupil education spending has increased by 28 percent alongside the stagnation in wages. The Organization for Economic Cooperation and Development (OECD) reports that the United States, despite being higher than almost any other nation on per-pupil spending, is in the middle of the pack when it comes to class sizes relative to other developed nations. 

So, if America’s high education spending does not translate into the highest salaries or the smallest classes, where is the money going? 

According to a 2018 OECD report, America spends higher proportions of education dollars on non-teaching staff (27 percent of US spending compared to the OECD average of 15 percent) and devotes a lower proportion of education spending to teacher compensation (54 percent compared to an OECD average of 63 percent). And these administrative and support staff costs continue to grow—administrative staff numbers have grown over five times faster than student populations in public schools since 2000. 

One of the major reasons behind these spending patterns is American dependence on school districts. While many European and Asian countries don’t have separate elected bodies to administer public education, the United States is somewhat unique in that it has thousands of locally-elected school districts, many of which are quite small. This equates to hundreds of thousands of administrators and so lots of dollars not going to teachers. 

Of course, there are many other factors diverting new education dollars away from teacher salaries, such as the increasing costs of pensions and benefits and the growing identification of special needs and disadvantaged students who require additional services from specialized staff. The growing numbers of support and administrative staff are also driven in no small part by increasingly standardized and restricted school funding laws that require substantial resources for compliance. Altogether, these complexities are crowding out teacher pay. 

Unfortunately, there is no quick fix for the structural issues preventing many teachers from getting competitive pay. In the long-run, the school funding system needs to be changed so dollars follow students and schools enjoy a large degree of freedom from district and state bureaucracies to then use education dollars to best fit their needs. One should expect the adoption of student-based, unrestricted funding to be good for teachers—since school leaders recognize that paying and retaining quality teachers is usually the most important factor driving student success. In a system where funding is based on students rather than institutions, teachers would become a higher priority.

Christian Barnard