Friday, October 08, 2010

Teacher's Pay - Illinois Example

Just How Much Are America's Teachers Getting Paid?
Jeff Carter, Points and Figures | Oct. 6, 2010, 7:00 PM | 10,715 | 68
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The popular documentary movie, "Waiting for Superman" has caused a lot of consternation and outrage among people in America. On her television show, Oprah Winfrey had education reform as a topic twice in one week.

Numbers always bring clarity to emotional situations. Let's look at some facts.

Teachers are extremely important to our society. They are educating the next generation of human capital that will hopefully help us make the next great leap forward. Like there are good employees and bad employees, there are good and bad teachers. One thing is for sure, exposure to a great teacher that understands their craft can change a life.

Every single state has a different set of pay standards for teachers. The only thing in common is that the entire teaching community is unionized. No matter if you are a good teacher, or a bad teacher, you get paid the same. There is no risk in being a teacher. Once you attain tenure, you have a job for life. It is virtually impossible for you to lose your job.

Let's look at Illinois, and drill down into one state's numbers to see what they look like.

Illinois is broke. There is a great debate beginning in the state about public pensions. Teachers pensions are a part of that debate. An aside, another travesty in Illinois is public school administrators.
They make an average of $106,217 in salary, not including pensions and health benefits. In the final three years of their contracts, school districts jack up the administrator salaries to increase their pension benefits for life. Of course, there is hardly a check or balance on the behavior. The taxpayer gets stung.

Teachers also have a pretty good deal in Illinois. They are 100% unionized. The rent seeking teachers' union curries favor with the Democrats. Democrats at every level of government do whatever the union wants.

The average teacher in the state of Illinois makes $61,402. Illinois teachers work around 176 days, 300 minutes, or 5 hours, per day. That's just over 35 weeks per year. On average, they make $348.88 per day, $1.16 per minute, or $69.60 per hour guaranteed. Teachers in Illinois work an average of 12 years. They can retire at age 55.

In order to find out what they really make though, you should take their pension benefits, net present value them and amortize them over their career. As of 2010, the average pension for an Illinois teacher is $43,164. It compounds annually for life at 3% per year.

Now it's time to do some math and make some assumptions. Assume that the lifespan of the teacher is no different than the average American, 78 years. If they start teaching at age 22, on average they will quit at 34. This means they will wait 21 years to collect their pension. The discount rate for the cash flows is a conservative 5%.

When you crunch all the numbers, the net present value of that pension is $290,756. Amortizing that over a twelve year career adds $24,229.64 to their average salary, making their actual salary before health benefits are added in a tidy $85,631.67, or $97.31 per hour.

If you compare and extrapolate that number to the private sector, it is interesting. Assume that you work an 8 hour day, 50 weeks a year. $194,620 bucks a year is what you would make! Most private sector jobs at that level work a lot more than an 8 hour day. Recently, private sector employment has not been as lucrative as public sector employment. For the first time in American history, it pays to be in the public sector.

Being an professional educator is going to give you a comfortable lifestyle. Odds are, you won't own an island. But, you get summers off, a short work day, and no worries about ever losing your job. There will always be something under the Christmas tree.

However, our society really needs to rethink how we pay our teachers. In aggregate, our schools are not turning out a quality product. The country is falling behind. Our future is in danger. Unionization of education hasn't been good for great teachers, and it hasn't been good for America. It only helped the bad teachers.

This contract needs to be renegotiated. America needs to redefine how the teaching job is structured. Then, fair metrics can be applied for evaluation. Good teachers can make more, and poor ones can be weeded out. We ought to be paying our teachers more in upfront money for that change. On the back end, pensions need to go from defined benefit, to defined contribution.

Changes like this will make for better schools, attract better quality teachers, and turn America into a better educated populace. That is the great leap forward we need to stay competitive.

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anp said...

A teacher needs to be vested before receiving the benefits that you discussed. Vesting is based on years of service and in order to receive full benefits a teacher must work more than the 12 year scenario you describe. That being said - you raise several valid points such as increased salary in the last few years before retirement, which is now controlled more than it was before (TRS does not recognize the large raises that used to be part of teacher and admin contracts)and teacher pay is based on years of service and education and not on any sort of performance. Teaching is hardly the work schedule that you describe as most teachers (at least the one's that educate my children) work evenings to prepare for classes and answer parents questions/comments.
While we talk about the issues with teacher pension funds, we don't mention the funds that the state has borrowed from the fund and needs to repay. We also don't question why teachers in Chicago are covered under a different pension fund than the rest of teachers in the state

Anonymous said...

I have no idea where you got your information. I am a teacher in 150. I have a master's degree and I have been working 14 years....I DO NOT make more than 50,000 a year. I cannot retire for another 10 years and I am 55 years old. I work nights and weekends to grade papers, make lesson plans, shop for school supplies that we have to buy out of our own pocket, and get things ready for the next day of teaching. In the summer, i go to class for 8 hours a day most of the summer just to keep up on educating your students. I would like to know how many doctors have to buy their own pens, pencils, operating supplies, or hospital gowns of their patients? How many secretaries have to buy their pens, computers, desk chairs, paper clips, or anything else they use to work with? How many cooks have to buy the dishes they serve on or the utensels their customers use to eat with? Teachers are lucky to make minimum wage by the time you deduct all the supplies we have to pay for, all the college classes we have to take, and all the training we are REQUIRED by law to take but have to pay out of our own pockets. Most of those trainings average $175 a day not including travel expenses if they are in Chicago.
I think a little more investigation was needed before this author wrote the article he or she did.

Merle Widmer said...

To anonoy,

I taught 5 years before joining the private sector where I belonged. I didn't like the pay or the incompetent boards, or incompetent superintendents, or the pay.

I am quite familair with #150. You complain too much and should perhaps start a new career. You can't be fired, you can start drawing full benefits at 33, assuming you graduated at 21 and have practically your whole life in front of you. I started my own business at age 39.

You have to buy your own chair? That is not true according to an administrator at #150. You can always buy a chair you like if you don't like the chairs they provide to all teachers. In fact, you can buy anything you want but you are not forced to buy anything.

Don't you have a PTO?

Most classrooms I visited where there were good teachers who did not sit down during the entire class.

Are you obese?

Also, you have a lounge with chairs.

I would not like to be a student in your classrooms. I taught 7 classes a day, was head coach of all grade school sports and head coach in high school and was paid $3300 with NO benefits.

If you are not happy, seek other employment. An unhappy teacher can not be an effective teacher.

Anonymous said...

Nice try...

1) I am a teacher, and am contracted to work at minimum 1/2 an hour before school starts and 1/2 an hour after school starts...therefore my day is at least 8:00 a.m. to 4:00 p.m., usually is longer. And, I only get 35 minutes for lunch, not an hour like private sector folks. Therefore, I work far longer than that 5 hours per day figure you throw out there.

2) Last time I checked, Illinois teachers are not 100% unionized.

3) Counting a pension towards salary benefits is painting a false picture of neglect to mention teachers CANNOT draw Social Security like private sector employees, so our ONLY source of retirement income is the state pension to which we contribute, which might just get flushed down the toilet due to mismanagement by everyone down in Springfield. Their little way of saying "thank you" for a career of service, I suppose.

4) You mention you taught for 5 years...and you said you quit because you didn't like the pay (twice), and the incompetent people around you. I guess you realized you were the only competent one around...and weren't being compensated you quit. Your own personal example contradicts your argument, in my opinion.

Following the precepts set forth in your article, there would be even less pay for teachers, therefore inspiring even more "competent" ones like yourself to jump ship, and creating less incentive for people to enter the profession in the first place.

I don't tell CEO's how much to pay their employees...we don't need CEO's telling schools how much to pay their teachers. The business model and school model are NOT comparable.

Anonymous said...

teachers in rhode island are paid just as highly and its wrong. additionally one would think a requirement to join the union would be illegal and unconstitutional but the law in Rhode Island is that teachers must join the union.
People need to rise up and take government back from public unions.