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Study Concludes Public School Teacher Salaries $120 Billion Over Market Value

11:15 AM, Nov 1, 2011 • By MARK HEMINGWAY
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Those on the left are wont to complain that government employees are under assualt these days because GOP politicians are going after public sector unions and generous deals they've leveraged through collective bargaining. The standard defense of civil service workers is, yes, they might have good benefits and more job stability but these things are necessary because public sector workers earn significantly less than private sector counterparts.

Well, a new study by the American Enterprise Institute's Andrew Biggs and Jason Richwine from the Heritage foundation concludes that America's public school teachers are just flat out overpaid. The headline numbers from the study are this: Teacher pay nationally is about $120 billion over market value, and teachers who switch to teaching from other jobs get a 9 percent pay rise, while people who leave teaching typically take a 3 percent pay cut.

Other conclusions from the study:

•The wage gap between teachers and non-teachers disappears when both groups are matched on an objective measure of cognitive ability rather than on years of education.

•Public-school teachers earn higher wages than private-school teachers, even when the comparison is limited to secular schools with standard curriculums.

•Pension programs for public-school teachers are significantly more generous than the typical private-sector retirement plan, but this generosity is hidden by public-sector accounting practices that allow lower employer contributions than a private-sector plan promising the same retirement benefits.

•Most teachers accrue generous retiree health benefits as they work, but retiree health care is excluded from Bureau of Labor Statistics benefits data and thus frequently overlooked. While rarely offered in the private sector, retiree health coverage for teachers is worth roughly an additional 10 percent of wages.

•Job security for teachers is considerably greater than in comparable professions. Using a model to calculate
the welfare value of job security, we find that job security for typical teachers is worth about an extra 1 percent of wages, rising to 8.6 percent when considering that extra job security protects a premium paid in terms of salaries and benefits.

Public school teachers have traditionally been treated as something of a sacred cow in political debates. This study could go a long way toward puncturing the myth that most of the nation's teachers are poorly compensated.

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