NCPA - National Center for Policy Analysis

School Choice Means Higher Teacher Pay

September 9, 2014

Teachers' salaries would increase if states would introduce school choice, according to a study from Michael Barba and Vance Ginn for the Texas Public Policy Foundation.

Recently, the president of the National Education Association, Dennis Van Roekel, said that poor teacher morale was linked with declining school budgets -- the implication being that raising teacher pay would improve teacher satisfaction.

But is increasing education spending the best way to boost teachers' salaries? Barba and Ginn use the state of Texas an example. Texas is the largest employer of teachers in the nation, with more than 324,000 K-12 teachers in the public school system. This figure is far higher than the amount of teachers employed by private schools (just 23,360).

Teacher pay in Texas is set by local school boards. The state imposes a teacher pay minimum, and salaries are further adjusted according to a teacher's educational background and experience. In the 2012-2013 school year, Texas paid its teachers an average of $48,821.

How could the state increase that salary figure? By injecting competition into the educational marketplace. Dr. Jacob Vidgor, professor at Duke University, explained in a Texas school finance trial that the existence of a monopsony keeps prices down. A monopsony is similar to a monopoly, except that a monopsony involves a buyer with control over the market, rather than a seller. "In a market that's marked by monopsony power, the standard prediction for economics is that fewer teachers will be hired overall and their wages will be lower." But teachers' salaries would rise, Vidgor testified, with competition, as there would be more purchasers in the education market, beyond just public schools.

Indeed, without school choice, Barba and Ginn explain that teachers have little competition for their services, driving wages down. They contend that school choice would benefit both students and teachers, whose pay would rise as the demand for good teachers increases. According to Joseph Bast of the Heartland Institute, the introduction of universal school choice could raise teacher pay by $12,000 in public schools in Houston, Texas.

Source: Michael Barba and Vance Ginn, "Teachers Win: A Case for School Choice," Texas Public Policy Foundation, September 2014.


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