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Editor's Notes

• #5: The majority of every dollar spent on education pays for salaries and benefits. So it doesn’t make sense to cut budgets for photocopies or field trips in order to save money. To achieve serious efficiency in schools, we need to address how we deploy and compensate people. (Note: The above graph shows the breakdown of operating budgets only, not capital budgets.)
• #6: Real per-pupil spending has more than doubled over the last forty years. Since people make up most of education spending, have these increases been caused by hiring more people, or paying our workforce more money?
• #7: The answer is mostly that we’ve added a lot of workers. The above graph shows the dramatic decrease in the student/teacher ratio since the 1970s. Note that this does not include all of the non-teaching personnel (administrators, coaches, curriculum writers, and paraprofessionals) we have added to the payrolls! We need to ask whether we’ve gotten enough bang for our buck by simply throwing additional staff at the problem of low achievement.
• #8: Costs have *not* increased because salaries have gone up. As you can see, average real salaries are up about 10% since 1970. This increase can’t explain the doubling in per pupil spending during that time. And $55K may sound like a great salary in some places, but it doesn’t go far in others, especially for new teachers. Average starting salaries by state: CA $41,181; TX $32,868; MT $24,865 (NEA analysis).
• #9: So we have more teachers and other staff on the payroll than we did in past years. How good are they? The data suggest we’re not getting high achieving students to become teachers. New education majors score well below average on the SAT. Class-size reduction policies are partly to blame. California’s CSR policy resulted in 25,000 new teaching positions in its first two years. That means 25K people who were not good enough for the classroom prior to the policy were given responsibility for children’s learning. CSR does not work at huge, statewide scale.
• #10: The solution to these problems is to return control to local leaders, focus on quality over quantity, and make sure pay (and job security) reflect the value teachers and other staff add to the classroom instead of being based on one-size-fits-all state policy.
• #11: Retirement benefits for public-sector workers are extremely expensive, and states have not saved enough to pay for them. The graph on the right, showing the $600B in retiree health plans, is one of the scariest graphs in education policy in my opinion. However, the average teacher doesn’t get these rich benefits. They go only to those few workers who spend their entire careers teaching in the same pension system.
• #12: The few who get full retirement benefits do very well for themselves. Even in the depths of the recession, the number of teachers receiving $100K per year pensions from CalSTRS nearly doubled in two years.
• #13: Reform should not just punish beginning teachers, however, or teaching will be even less attractive to high-performers. The pension reform done by Illinois in 2010 means that new workers hired after 1/1/11 will earn less than half the pension wealth offered to someone hired in 2010, and it’ll take them years longer to reach the peak retirement amount offered by the system. This is unfair to new workers.
• #14: Teachers who move from state to state also suffer. This analysis shows the loss in pension wealth experienced by a teacher who leaves Missouri midway through his/her career to teach in a state whose pension system is also modeled after Missouri’s. (This allows an apples-to-apples comparison that avoids differences in pension policy between states.) The 21st century workforce we want to attract to K-12 education is highly mobile. Pension systems like this one serve the needs of the last century and must be reformed.
• #15: RI Treas Gina Raimondo, shown on the left, pushed through a major reform that will save Rhode Island $4B over time and puts the state’s pension system on a path to solvency. Dan Liljenquist, on the right, helped reform Utah’s pension system BEFORE the state experienced a serious crisis. Both examples show that pension reform, while politically difficult, is possible.
• #16: Traditional benefits do not serve the needs of most workers, especially most new teachers. Reform is needed immediately in almost every state. There are several paths to reforming teacher retirement benefits, however. We at Fordham prefer 401(k)-style individual accounts, but my colleague Raegen Miller at the Center for American Progress has made a great argument for cash-balance plans that preserve many features of defined-benefit plans while improving portability and fairness. (See http://www.americanprogress.org/issues/2011/09/redefining_teacher_pensions.html.)Retiree health care benefits need a hard look. States have saved very little for them, costs are increasing, and practically no other employers in the country provide such rich benefits.