Teacher pay in the US is relatively low and trending downward

It is no secret that the K-12 teacher workforce doesn’t pay very well, though many readers may not fully appreciate the severity of the problem. In this Chalkboard post, we share information about teacher pay, how it compares to pay for other career choices, and how these relative comparisons have changed over time. We’ll also dispense with some myths about fringe benefits making up for weak salaries. Finally, we’ll point out that better teacher pay isn’t blocked by the lack of funds—what’s happened is we’ve decided to spend our educational dollars on other things.

We share these ideas with a particular economist’s belief: If you want the opportunity to hire lots of great people you have to pay appropriately. Not that pay is the only thing that matters in a career choice, but it does matter a lot. Unfortunately, we’ve often missed this lesson for school teachers.

Teacher pay is relatively low and has been declining

We begin with a comparison of average public school teacher pay (primary school only) to the pay of other college graduates across a variety of industrialized countries from the OECD publication “Education at a Glance” (see Figure 1). The other college graduate comparison group is important because this is the pool from which teachers are drawn. Teachers’ salary relative to other college graduates is represented on the y-axis, and countries are ordered on their relative salary rank.  

There are two striking takeaways from this picture. The first is that the U.S. ranks dead last on the chart. The second is that American teachers are estimated to earn less than two-thirds of what other college-educated Americans earn. That’s a huge gap and slightly larger than the Economic Policy Institute’s well-known “teacher pay penalty” (estimated at nearly 27% in 2024). It’s not unusual in other countries for teachers to be paid somewhat less than comparable labor (most countries are below the dashed “pay is equal” line)—but the U.S. gap is striking. The relative pay penalty and international rankings can vary based on how comparisons are done. For example, some argue that summers off may be an attractive perk for some people, which implies the estimated gap is too large. Other work highlights that teachers often attain higher levels of education than most other college-educated workers they are compared against, suggesting the gap is too small. Indeed, there is a vigorous academic debate about these issues—but regardless of the exact size of the relative gap, we think it’s fair to say that no one is likely going into teaching because they think it’s going to make them rich.

How should we think about these numbers? One possible explanation for the relative standing of American teachers is that the results are being driven by widening income gaps. In the United States (and many other countries as well), the upper end of the income distribution has pulled away from the middle of the distribution. No one expects teachers to be in the top 1% of earners. Thus, we might be wary of comparisons where averages (means rather than medians) might be distorted by high earnings at the very top of the income distribution. However, that turns out not to be the problem. The problem is that teachers fall behind in the middle of the income distribution.

Figure 2 uses year-round earnings data from the American Community Survey (ACS) to compare quantiles of the wage and salary distribution for teachers to the wage and salary distribution for non-teachers (all with a bachelor’s degree or more and working full time). You can think of this as lining up each group ranked from 0 to 100 in order of earnings. Thus, median earnings are ranked 50 for both teachers and non-teachers.

If teachers and non-teachers had similar salary distributions, the blue line would lie on top of the dashed gray 45° line. You can see that, in fact, at the low end of the salary distribution, teachers and other college grads have roughly comparable earnings. But at around the 16th percentile, the teacher line begins to diverge from the non-teacher line. The median teacher (the 50th percentile of all teachers) only earns about as much as a non-teacher at the 30th percentile of non-teacher earnings (represented by the dashed orange line). And a teacher near the top of teacher pay, the 90th percentile of teacher salaries, only earns about as much as a non-teacher at the 58^th percentile (represented by the dotted orange line). Even the best-paid teachers often experience a significant pay penalty.

Even more, as the relative standing of teacher pay has gotten worse over time, these trends do not appear to be an artifact of teaching being a female-dominated profession. Three-quarters of teachers are women—a number that has actually risen over the last 40 years. Fortunately, women and minorities now have far better access to professional opportunities than they did back 40 to50 years ago when there was significantly more discrimination in the labor market. But the labor market discrimination that once existed acted as a subsidy for teaching. That subsidy no longer exists as earning opportunities outside teaching have risen for these groups.

Figure 3 makes this point clear. It shows where a median-salaried female teacher stood in the salary distribution of other college-educated women over time. In 1980, the median female teachers earned slightly more than the median female non-teacher. So teaching was a relatively well-paying job back then, albeit not a profession where one was going to get rich. The median teacher’s position in the salary distribution has gone downhill since, with the drop since the pandemic being especially rapid.

From an economist’s point of view, there is no theoretically right or wrong salary for teachers. If you think that we have enough great teachers already—and we certainly have quite a few great teachers—then you should conclude that the relatively low salary teachers receive is good enough. On the other hand, if you think we need more great teachers, the relative salary numbers above provide ample evidence of why we’re falling short.

Enduring myths about teacher compensation

We have noticed some common misconceptions that often arise when talking about teacher compensation. We want to address those head on. First, we want to put to rest the myth that higher benefits compensate for low teacher salaries. As a fraction of total compensation, teacher benefits are not much different from what other professionals earn. A greater fraction of compensation of these benefits goes to retirement, though this is offset by lower benefits in other areas (e.g., paid leave). The Bureau of Labor Statistics offers the following data (see Table 1).

We do, however, want to draw attention to the very large difference in the share of compensation received as retirement benefits between teachers (15.3%) and the other professions (close to 5%). There is good, although limited, evidence that teachers value pension benefits less than they value current salary. In other words, there should at least be a discussion of whether some part of teacher compensation should be shifted from pension to salary. Going forward, of course, we hasten to add that we are not advocating for the reduction of retirement benefits already earned.

A second myth is that there just isn’t money for a significant increase in teacher salaries. Per-student spending has increased dramatically over time, though it’s apparently being spent on things other than teacher salaries. Real per-pupil spending (adjusted for inflation and not including capital spending and interest on school debt, though those are relatively small) has risen 10% over the last decade and 44% over the last 30 years. And in recent years, the number of teachers in schools has increased a bit even while the number of students has fallen somewhat.

Figure 4 shows the teacher salaries as a fraction of public school expenditures over more than a century.

If you go back 100 years, more than half of school spending went to teacher salaries. Where the data ends—just before the start of the COVID-19 pandemic—the fraction going to teacher salaries had fallen to a quarter. Basically, schools are spending more money, just not on teacher salaries. As an example, Chad Aldeman tells us that over a 20-year period, per-pupil revenue doubled (after inflation) but employee salaries rose only 5%. In other words, school districts have opted to increase staffing rather than increasing teacher salaries.

Reverse the trends in teacher pay to counter the declines in teaching

Teaching is at or near historic low points in terms of its prestige, on-the-job satisfaction, and interest in the profession. We need to draw more of the best and brightest into teaching. The basic facts are that teacher pay is relatively low, hasn’t been improving, and could be higher if we made different decisions about education spending. There is lots of room to argue about the best way to distribute higher pay among teachers. At the most basic economic level the argument is simple: If we believe that the human capital of teachers matters—and that’s certainly what the evidence shows—teacher pay needs to rise dramatically to make teaching an attractive career option, drawing more talent into the profession.