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Are we thinking about teacher pay all wrong?

Jul 27, 2017

Credit Sarah Hulett / Michigan Radio

Nearly every school district in the nation uses the same type of salary schedule to pay its teachers -- a schedule with "steps" and "lanes" that pays based on years in the classroom, and you automatically get paid more if you have a master's degree or higher.

But let's look at some other ways to pay teachers and see how the research stacks up.

How does a $25,000 bonus sound? 

Kate Walsh with the National Council on Teacher Quality calls the steps and lanes salary schedule a "flawed system" because it doesn't take performance into account.

"You can be the best teacher in the school district and you’re going to get the same pay raise as the worst teacher in the district, so it doesn’t make sense from a labor market perspective," she says. 

Instead she advocates for performance pay or merit-based pay system, which some districts across the country have implemented with varying results. She and other education policy experts we spoke to for our series hold up the Washington, D.C. public school district as an example of how a successful performance-pay system for teachers could work.

There are two parts to the D.C. pay system: an annual bonus of up to $25,000 after one year of being rated "highly effective," and an increase in base salary of up to $27,000 for teachers who are rated "highly effective" two or more years in a row. 

The large bonuses come at a cost, though.

D.C. teachers have to give up some of their job security and will be fired for poor performance. Their performance reviews are based not just on test scores, but on classroom observations throughout the year, how well teachers explain concepts to students, and their support of school initiatives, among other things. The Washington Post reports that for math and reading teachers in grades four through eight, half their evaluation depends on students' standardized test scores.

In D.C.'s merit pay system, teachers deemed "highly effective" can earn up to $25,000 in annual bonuses and see increases in their base salary of up to $27,000.

Two recent studies show D.C.'s performance pay system has a positive impact on both teacher and student performance, and increased the voluntary attrition of low-performing teachers.

But there are many critics of D.C.'s controversial merit pay system because of the high stakes and the "significant differences" in the percentage of teachers rated "highly effective" in low poverty schools and high poverty schools.

David Hecker of the American Federation of Teachers of Michigan says steps and lanes are a proxy for knowledge and quality, and provide "objective" criteria for awarding raises. The union leader says his major problem with merit pay systems is that it's "too subjective" and puts the emphasis on individual teachers. He says a school that works best is one that works "as a team, and merit pay works against that." 

​Not all merit pay systems are created equal

AFT's David Hecker says he could see some value in a merit pay system that rewards schools as a whole, rather than individual teachers. New York took that approach several years ago, and the evidence of whether or not it worked is still muddy.  This report says NY's school-based approach didn't work (especially for larger schools) while this meta-analysis report shows that, broadly speaking, incentive-based programs aimed at groups of teachers do improve students outcomes.

A Kentwood public schools teacher who responded to our survey expressed concerns over merit pay systems:

"I'm very passionate about teaching, and I would say other truly passionate teachers would agree, we are working as hard as we possibly can, dangling a 'carrot' will not inspire us to work harder. When you are giving everything you have for these children, how can you give more?"

Some school districts just dip their toe in the water when it comes to merit pay. They offer small, incremental performance-based pay raises and bonuses. Joshua Cowen, an education policy professor at Michigan State University, says this smaller merit-pay approach (think $500 bonuses) does not appear to produce the same kinds of results as the "wholesale" multi-faceted merit pay changes incorporated in D.C. public schools.

One Michigan school district has even found these small, incremental raises have a "negative" effect on teachers.

According to this MLive article, for the last several years Whitmore Lake Public Schools was rewarding its "highly effective" teachers with a $500 stipend and "effective" teachers a $100 stipend, but the district's getting rid of its merit pay in hopes of finding other ways to reward teachers through collective bargaining.

Michigan actually revised its School Code back in 2010 under then-Governor Jennifer Granholm to make job accomplishments and job performance "a significant factor" in determining teacher pay, but it doesn't appear to have much teeth. 

A 2012 Mackinac Center for Public Policy survey found that many districts ignored the law, and a recent paper out of Western Michigan University also found that "substantial policy evasion occurred, with most superintendents not implementing merit pay" in part because they can. There are no penalties for districts that refuse to follow the law. 

Should I stay or should I go?

There are differing views on when, or if, teacher quality plateaus after a certain number of years in the classroom. But one thing almost everyone can agree on is this: teachers make the most rapid gains in improvement during their first several years in the classroom. And yet, that's when they're paid the least. 

"We need to increase starting salaries to encourage people to enter the field." -- public school teacher, Portland

D.C.'s teacher compensation system pays starting teachers relatively well ($51,359) compared to other districts.

NCTQ's Kate Walsh says that helps attract the best and brightest to the teaching field, and the generous performance-pay bonuses help keep the best and the brightest in the classroom.

Grand Rapids Public Schools officials realized they were losing a lot of teachers to other districts because of low pay, so they just signed a union contract that ups starting pay for teachers to $40,000 and "provides salary hikes for mid-career educators."

How do unions factor in? 

When it comes to salaries, the research is pretty clear on this point: unionized workers earn more than non-unionized workers. A 2014 analysis published in the U.S. Bureau of Labor Statistics' Monthly Labor Review shows that the same goes for teachers: while there is a pay gap between teachers and other comparable professions, "the difference is mitigated if they are employed in the public sector—and more so if they have union representation as well."

When it comes to student achievement, the research about unions is less clear. As this Politifact article points out, some studies show a link between strong unionization and greater student outcomes, while others do not. A 2015 paper in the Economics of Education Review reviews three decades of literature on the union-student achievement link, and also finds the evidence to be mixed. The authors call for more research:

In this dynamic policymaking context, we conclude not simply with the usual call for more research, but for more research of a certain kind. The variation in union strength identified in recent literature, the new policy experiments occurring in states across the country, and the sheer availability of large administrative datasets that link individual students to teachers in school across the country now allow a new field of highly focused questions that link educational outcomes to rules, regulations and conditions directly attributable to union efforts. We do not expect the results of this work to end all controversy on the topic, but perhaps the debate may shift from one that assigns blame to one that identifies particular, evidence-based solutions.

Does that master's degree really make you a better teacher?

If you're a teacher in Michigan and you have a master's degree, you automatically earn more than a teacher in your building who has only a bachelor's degree. There is so much riding on these advanced degrees salary-wise, but are teachers with advanced degrees any more effective than those without? 

Again, the answer is mixed.

There's a growing body of research that points to a "weak" or "tenuous" connection between advanced degrees and teacher effectiveness. Here's an excerpt from a study out of North Carolina:

Having a graduate degree exerts no statistically significant effect on student achievement and in some cases the coefficient is negative. Thus, the higher pay for graduate degrees would appear to be money that is not well spent, except to the extent that the option of getting a master's degree keeps effective experienced teachers in the profession.

There does appear to be one important caveat to these studies: teachers with advanced degrees in a specific subject area (e.g. math or physics) show higher gains in student achievement when they teach classes in those specific subjects, according to this Education Next report: 

Studies with more detailed measures of teachers’ education levels and coursework in subject areas found that, at least in math and science, academic preparation does positively influence student achievement. Having an advanced degree in subjects outside of math and science, however, does not appear to affect student achievement.

Ok, so you think the system doesn't work. How would you improve it?

We put this question to a number of education policy experts, school employees and union reps. Here are their answers:

"Need to offer starting teachers an apprentice pay for 5 years @ 55,000. If they are effective after 5 years bump them up to $75,000. If they are highly effective pay them $100,000." -- public school teacher, Bay City

(That's a big pay bump from where things stand today. Our Stateside team profiled a charter school in New York's Washington Heights neighborhood trying this approach. The school pays starting teachers $125,000.)

"You would add big salary improvements as experience grows, say in the first decade of a career, then create some kind of hybrid system where after the 10th year other factors would determine the salary level ... things like mentoring, leadership role in curriculum development, advising others." -- Josh Cowen, MSU education professor

"A moving average where bonus payments are based off of a longer run (three to four years) of a measure of student performance." -- Scott Iberman, MSU education professor

"Starting pay should be comparable to other professions. Should the senior teacher get more for experience, or the younger teacher who needs to make a decent living so they can be attracted to and stay in the field? That should never be the trade off." -- David Hecker, AFT of Michigan