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Teachers earn almost 20% less than comparable college grads: Economic Policy Institute

Reggie Wade
·Writer
·3-min read
A woman wears a "Teacher Strong" face mask as she attends a rally to protest the opening of schools following the outbreak of the coronavirus disease (COVID-19) in the Brooklyn borough of New York City, New York, U.S., September 1, 2020.  REUTERS/Carlo Allegri
A woman wears a "Teacher Strong" face mask as she attends a rally to protest the opening of schools following the outbreak of the coronavirus disease (COVID-19) in the Brooklyn borough of New York City, New York, U.S., September 1, 2020. REUTERS/Carlo Allegri

Being asked to go above and beyond the call of duty is par for the course when it comes to being a teacher in the United States right now — and for significantly less pay than non-teacher college grads. According to new research by the Economic Policy Institute (EPI), public school teachers earn about 20% less in weekly wages than non-teacher college graduates.

Despite a small contraction recently, the “teacher wage penalty” — which EPI defines as how much less, in percentage terms, public school teachers are paid in weekly wages compared to other college-educated workers (after accounting for age, degree level, marital status, state residence, and other factors that affect earnings) — has grown substantially in the last 20 years.

In 1996, the wage penalty was 6.0%. In 2019, the penalty was 19.2%, reflecting a 2.8 percentage-point improvement compared with a penalty of 22.0% a year earlier. EPI believes the uptick could be due to several successful strikes around the country in 2018 and 2019.

“Simply put, teachers are paid less (in wages and compensation) than other college-educated workers with similar experience and other characteristics, and this financial penalty discourages college students from entering the teaching profession and makes it difficult for school districts to keep current teachers in the classroom,” said EPI.

EPI’s study shows that the wage penalty for male teachers is much larger than it is for women in the profession — and it’s worsened considerably. The teacher wage penalty for men was 16.6% in 1979. In 2019, male teachers earned 30.2% less than similar male college graduates who chose a different profession. “This explains, to a large degree, why only one in four teachers are men,” according to EPI.

Economic Policy Institute
Economic Policy Institute

One area where teachers fare well compared to their non-teaching counterparts is benefits. Since most teachers are municipal workers, they pay less for health benefits than non-teachers. The study shows that non-wage benefits made up a more significant share of total compensation for teachers (29.3%) than for other professionals (21.4%). However, EPI notes that this benefit advantage of teachers is not enough to offset the growing wage penalty.

Teachers make between 2.0% and 32.7% less than other comparable college-educated workers depending on the state. Current data shows that it exceeds 20% in 21 states and Washington, D.C. The states of Virginia and Arizona currently have the highest teacher wage penalty.

Teacher Wage Penalty map — Economic Policy Institute
Teacher Wage Penalty map — Economic Policy Institute

Economic Policy Institute labor economist Lawrence Mishel tells Yahoo Finance that teachers are crucial to American society, and he is encouraged that educators are beginning to get some of the recognition they deserve amid the coronavirus pandemic.

“I think there is a better appreciation that teachers are heroes, and they're underpaid and overworked and they face tremendous challenges and none more than during the pandemic.”

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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