Frozen Assets: Educationsector Reports

EDUCATIONSECTOR REPORTS
Frozen Assets
Rethinking Teacher Contracts Could Free Billions for School Reform
8y Narguar|ta 8oza
January 2007
A0Kh0wLF00FNFhTS
TheJoyceFoundationprovidedfundingforthisreport.The
fndingsandconclusionsarethoseoftheauthoralone,anddo
notnecessarilyrepresenttheopinionsofthefoundation.
A80UT THF AUTH08
MARGUERITE ROZAisresearchassistantprofessoratthe
UniversityofWashingtonsCenteronReinventingPublic
EducationandanEducationSectornonresidentseniorfellow.
A80UT F0U0AT|0h SF0T08
EducationSectorisanindependenteducationpolicythink
tankdevotedtodevelopinginnovativesolutionstothenations
mostpressingeducationalproblems.Wearenonproftand
nonpartisan,bothadependablesourceofsoundthinking
onpolicyandanhonestbrokerofevidenceinkeyeducation
debatesthroughouttheUnitedStates.
1
EDUCATION SECTOR REPORTS: Frozen Assets www.educationsector.org
Butsucheffortsareexpensiveand,asthenationfaces
thecostofcaringforanagingpopulationandother
challengesintheyearsahead,itisunlikelythateducation
willreceiveagreatdealofnewfunding.Education
leaders,asaresult,willincreasinglyhavetoscrutinize
theirexistingbudgetstofndwaystofundtheirreform
initiatives.Onepotentiallyvaluablesourceoffundsfor
reformarecommonprovisionsinteachercontractsthat
obligateschoolstospendlargeamountsofmoneyon
programsthatlackaclearlinktostudentachievement.
Educationisalabor-intensivebusinessanestimated
60percentto80percentofthemorethan$500billion
peryearspentoperatingthenationspublicschoolsgoes
directlytopayingandsupportingschoolemployees,
andteachercontractsplayabigroleindetermining
wheresuchresourcesaredeployed.Muchofthemoney
isdirectedtobasicsalarycosts.Butmanycommon
provisionsofteachercontractsrequireschooldistricts
tospendsubstantialsumstoimplementpolicieswhich
researchhasshownhaveaweakorinconsistent
relationshipwithstudentlearning.
Thisreportexamineseightsuchprovisions:
Increasesinteachersalariesbasedonyearsof
experience;
Increasesinteachersalariesbasedoneducational
credentialsandexperiences;
Professionaldevelopmentdays;
Numberofpaidsickandpersonaldays;
Class-sizelimitations;
Useofteachersaides;
Generoushealthandinsurancebenefts;and
Generousretirementbenefts.
Thereportestimatesthetotalspendingonthese
provisionsinpubliceducation,examinesstudiesonthe
provisionseffectsonstudentachievement,andexplores
howthesefrozenassetsmightbeputtodifferentuse.
Ouranalysisestimatesthatanaverageof19percentof
everyschooldistrictsbudgetislockedupbytheseeight
provisions.Thattranslatestoroughly$77billioninannual
publicschoolspendingnationally.
Thisisnotexcessmoneythatcouldbewithdrawnfrom
thepubliceducationsystemwithnoimpactonstudent
learning,butrathermoneythatmightbespentdifferently
andwithgreatereffect.Someschoolsandschool
districts,particularlythosethatservedisadvantaged
students,arelikelytorequiresignifcantincreasesintotal
fundinginordertoimprovetheirperformance.Butwith
suchmoniesinshortsupplyitsurelymakessensetoput
existingresourcestothebestpossibleuse.
Moneyspentonseniority-basedraisesandgenerous
healthplansformoreveteranteachersmightbebetter
usedforraisingminimumsalariestorecruityounger
educatorswhomeethighteachingstandards.Resources
spentmeetingmandatoryclass-sizetargetsorhiringa
prescribednumberofclassroomaidesmightbebetter
usedtohireteacherstoprovideafter-schooltutoringto
low-performingchildren.Teachercontractsoftendeny
schoolleadersthefexibilitytomakesuchtrade-offsinthe
eightkeyareasthereportexamines.
Teachersalsopayapricefortherigidityoftheprovisions,
atleastindirectly.Restrictingresourcesthatcould
bebetterusedelsewherediminishesthequalityof
schoolsand,assuch,theprofessionallivesofteachers.
Conversely,teachersaswellasstudentswouldbeneftif
resourceswereusedmoreeffectively.
Itisimportanttonotethatteachersunionsarenotsolely
responsibleforcontractprovisionsthatcontributelittleto
studentachievement.Everyteachercontractrequirestwo
state and federal accountability systems are putting immense pressure on
public schools to improve the performance of low-achieving students. to
respond, schools must be able to recruit and retain high-quality teachers,
strengthen curricula, and take other steps to provide struggling students
with the help they need.
2
signatures,onefromlaborandonefrommanagement,a
factthatissometimeslostindebatesabouttheimpactof
unionsonpublicschools.
Anotherindicationthatschooladministratorsbear
responsibilityformanyunquestionedexpendituresisthe
factthatmanyofthepoliciesandpracticesmandatedby
collective-bargainingcontractsalsoexistinstatesand
schooldistrictswhereteachersdonothavecollective-
bargainingrights.Forinstance,salaryschedulesinstates
withoutcollectivebargainingcompensateteachersfor
longevityandeducationlevelsinmuchthesamewaythat
salaryschedulesspecifedbylaborcontractsdo.
1
The Methodology
Teachercontractprovisionsvarysignifcantlyinthe
nations15,000schooldistricts;provisionsfoundin
someareabsentfromothers.Thisreportexamineseight
provisionsthatacademicliteratureandknowledgeable
researcherssuggestarecommonincollective-bargaining
contracts.Thereportalsofoundthesesameprovisions
inasignifcantnumberofcontracts.Thereport,however,
examinesonlythoseprovisionsthatresearchsuggests
haveaweakorinconsistentrelationshipwithstudent
learning.
Thecostofcontractprovisionsatthelocalleveldepends
onper-pupilspending,whichvarieswidelyamong
districts.Thereisnosingle,nationalrepositoryofteacher-
contractprovisionsgoverningspendingandlaborpolicy
thatwouldallowresearcherstodefneprecisecriteria
foridentifyingtypicalrequirements.Estimatesofthe
costofteachercontractsvarygreatlydependingon
themethodologyused.ThePacifcResearchInstitute,
aconservativethinktank,releasedastudyin2002
estimatingthat85percentofdistrictexpendituresare
tiedtocollective-bargainingcontracts.Incontrast,the
NationalEducationAssociation,thenationslargest
teachersunion,hasclaimedthatclassroomteacher
salariesmakeuponlyone-thirdofdistrictbudgets.
Thisreportestimatesonlythedifferencebetween
necessaryorganizationalexpendituresandthose
additionalexpendituresthatifnotforcontractprovisions,
couldbeuseddifferently.So,forexample,noteverydollar
spentonsalariesiscalculated,butratheronlythose
expendituresassociatedwithmandatedsalarybonuses
associatedwithexperienceandeducationdegrees.In
somecases,thereportidentifespoliciesandprograms
thatmanyschoolsystemsreasonablycouldbeexpected
topursue,suchasteachertrainingandclass-size
reductions,butthatresearchsuggestscouldhavegreater
effectonschoolqualityifschoolleadershadgreater
fexibilityinimplementingthepoliciesthanmostteacher
contractsafford.
Thereportscostestimatesarebasedonthelatest
availableaveragelevelsofper-pupilspendingandteacher
compensationinlargerurbandistricts.Itestimatesthe
costofemployeebeneftslikehealthcareandretirement
beneftsbylookingatthecostdifferencesbetweentypical
teacherbeneftsandthebeneftsenjoyedbytheaverage
workerintheprivatesector.Estimatesforpolicieslike
class-sizereductionandhiringofteachersaidesalsoare
conservative,attributingonlyafractionofthelikelytotal
costofthepoliciestocontractprovisions.Forteacher
professionaldevelopment,onlycostsassociatedwith
mandatorydaysofpaidtrainingareincluded.
Thereportdoesnotconsidercostsforothertypical
contractprovisionsforwhichdataisunavailable,suchas
salaryincreasesearnedforeducationalcreditsbeyonda
graduatedegree.
The Results
Thisanalysisfoundthateachoftheeightcontract
provisionshasasignifcantimpactonschool-district
bottomlines.Notsurprisingly,themostcostlyprovisions
relatetothewayteachersarepaid.
1. Increases in Teacher Salaries Based on Years of
Experience: Virtuallyeveryteachercontractinthenation
dictatesthatteachersalariesbetiedtoyearsofservice
intheclassroom.Seniorityisabedrockprincipleofthe
industrialunionismfromwhichtodaysteachersunions
sprang.Itrepresentsthesinglemostexpensiveteacher-
contractprovision.
Butwhilesalariesforteacherstypicallyincrease
throughouttheircareers,researchsuggeststhatteacher
effectivenessintheclassroomdoesnotincreaseona
similartrajectory.Studiesshowthatindividualteachers
arelesseffectiveintheirfrstyearofteachingthanlater
intheircareers,butimprovementtendstoplateauafter
3
onlyfveyearsorso,andmayevendecline asteachers
approachretirement.
2
Moreover,researchsuggeststhat
whileteacherswithsomeexperiencearealmostalways
moreeffectivethantheywereasnoviceteachers,some
beginningteachersaremoreeffectivethansomeveteran
teachers.
3
Thismeansthatteachercontractsobligate
schooldistrictstogivemanymoreseniorteachers
additionalsalarywithnocommensurateincreasedbenefts
forstudentsinreturn,asopposedtorewardingteachers
whoareparticularlyeffective.Thisisnottosaythat
teachersshouldnotberewardedforexperience,butthat
theremaybemoreproductivewaysofstructuringsalaries.
Tocalculatethecostoftheseprovisions,thereport
reliesondatafromavarietyofsources.Accordingtothe
SchoolsandStaffngSurvey(SASS),asurveyofteachers
andteacherpoliciesperiodicallyconductedbytheU.S.
DepartmentofEducation,theaverageteacherinacentral
cityearned$45,400duringthe200304schoolyear.
4
TheAmericanFederationofTeachers(AFT),thenations
second-largestteachersunion,reportsthattheaverage
teacherhas14.8yearsofexperience.
5
SASSdataindicate
thattheaverageteacherreceivesasalaryincreaseof2.58
percentforeachyearofexperience.Itshouldbenotedthat
thisincreaseisaboveandbeyondcost-of-livingincreases.
Table1showsthesecostsinper-pupilterms.Theamount
wasfoundbycalculatingthedifferencebetweenthe
averageteachersalary(minusincreasesformasters
degrees,asdescribedbelow)andtheamounttheaverage
teacherwould havebeenpaidiftheyhadreceivedno
salaryincreasesforexperience.Thatamount,$12,083,
isthendividedbytheSASS-reportedaverageof14.56
studentsperteachernationwide.Thisyieldsanaverage
per-studentcostof$830forexperience-basedsalary
increases.Sincethenationalaverageper-student
spendinglevelin200304was$8,287,
6
thismeansthat
experience-basedsalaryincreasesaccountforabout10
percentofallschoolspending.(Thespecifccalculations
usedfortheseandsubsequentcostestimatescanbe
foundinAppendix1).
2. Increases in Teacher Salaries Based on
Educational Credentials and Experiences: Inaddition
tolongevity,nearlyallteachersgetadditionalsalaryfor
earningadvancededucationalcredentials,aswellasfor
participatinginapprovededucationalandprofessional
developmentactivities.Buttheevidencesuggests
that,likesalaryincreasesforveteranteachers,these
contractprovisionsmandateexpendituresthatdontyield
additionalstudentlearning.Somestudieshavefoundthat
whilemastersdegreesinmathandsciencearebenefcial
formathandscienceteachers,mastersdegreesinother
disciplinesyieldlittlemeasurableeffectsintermsof
increasedstudentlearning.
7
Yettypicalteachercontracts
provideadditionalsalaryforallmastersdegrees,
regardlessofsubject.Otherstudiesshownolinkbetween
mastersdegreesandclassroomeffectivenessatall.
8
AsTable2 shows,SASSdataindicatethat48.7percent
ofteachershaveatleastamastersdegree,andthatthe
averagesalaryincrementformastersdegreesis$5,200.
Thistranslatesintototalcostsof$173perstudent,or2.1
percentofschoolbudgets.
Itshouldbenotedthatthisestimatelikelyunderstates
thetruecostofsalaryincreasesbasedoneducational
credentialsandexperiences,becauseitdoesnotaccount
forsalaryincreasesforobtainingadoctoraldegree,which
8.2percentofteachershaveearned,orsalarybasedon
additionaleducationalcreditsshortofadegree,which
manyteachersreceive.
9
Table 1. 0ost of Taachar Sa|ary |ncramants 8asad
on Yaars of Fxpar|anca
Averageteacherssalary(notincludingbenefts)* $45,400
Averagenumberofpupilsperteacheremployed* 14.56
Averagesalaryincrementperyearofexperience* 2.58%
Averageyearsofexperience 14.8
Cost per pupil of salary for years of experience $829.88
Portion of expenditures attributed to years of
experience
10.01%
*NCES200304fguresforlarge/urbandistricts.
Table 2. 0ost of Sa|ary |ncraasas for Nastars
0agraas
Averagesalaryincrementforamastersdegree $5,200
Averageportionofteacherswithamastersor
above
48.70%
Cost per pupil of salary increases for masters
degrees
$173.93
Portion of expenditures attributed to salary
increases for masters degrees
2.10%
4
3. Professional Development Days: Nearlyall
policymakersandeducatorsagreeontheimportanceof
givingteachersopportunitiesforeducationandtraining
oncetheyareintheclassroom.Butthetrainingprovided
isoftenofquestionablequality.AsaConsortiumfor
PolicyResearchinEducationpolicybriefsummarized,
Thereisagrowingbodyofopinionamongexpertsthat
theconventionalformsofprofessionaldevelopmentare
virtuallyawasteoftime.
10
Thereissomeconsensusonwhathigh-quality
professionaldevelopmentshouldentail.Among
otherthings,itshouldbebasedintheschoolswhere
teachersteach,itshouldgiveteachersthechancetotry
outnewstrategiesinrealclassroomsettings,itshould
includeongoingsupportafterinitialtraining,andit
shouldbeevaluatedtoensurethatitincreasesstudent
learning.
11
Theunevennatureofteacherprofessionaldevelopment
ispartiallyafunctionofthewayteachercontractsrequire
thattrainingtooccur.Mostteachercontractsspecify
thatteachersmusthaveprofessionaldevelopment
opportunitiesforacertainnumberofdayseachyear.
Teachersarepaidextraforthesedays,whichareadded
tothenumberofdays(usuallyspecifedinstatelaw)in
whichstudentsaretaught.
Yetinmanydistricts,teachercontractsmakethese
strategiesdiffcultorimpossibletoimplement.Most
contractsrequirethatprofessionaldevelopment
activitiesoccurindiscrete,set-asidefullorhalfdays,
precludingdistrictsfromofferingprogramsofongoing
supportinsmallerunitsoftime.Manycontractsalso
specifyprofessionaldevelopmenttailoredtojob
categories(e.g.,separatetrainingforlibrariansand
bilingualeducationteachers).Becausethesetendtopull
teachersfromvariousschoolstogetherintooneoff-site
location,theyreducethetimeavailableforprofessional
developmentprogramsbasedwithinindividualschools.
Teachersandstudentswouldlikelybeneftifthefunds
usedtopayformandatoryprofessionaldevelopment
dayswereusedformoreeffectiveprofessional
developmentpractices.
Whilelocalteachercontractsvary,theNEAhasreported
thatthemediannumberofpaidprofessionaldevelopment
daysforclassroomteachersisfve.
12
Inatypicalstate,
thatamountwouldbeaddedto180daysofinstruction.As
Table3 shows,thistranslatesintoadditionalannualcosts
of$84perstudent,or1.02percentofschoolbudgets.
4. Number of Paid Sick and Personal Days: Employee
absenteeismisaparticularconcernforK12schools.Unlike
manyprofessionaloccupations,ateachersworkcant
simplybesetasideforadayifsheorheistoosicktocome
toschool,orsimplywantstotakethedayoff.Substitute
teacherscanbeapoorsubstitutefortherealthing.
13
Teachers,comparedtootherprofessionals,getarelatively
generousnumberofsickandpersonaldaysasmandated
byteachercontractsandusemoresickdaysthan
average.AsresearcherMichaelPodgurskyhasnoted:
AccordingtoarecentU.S.Departmentof
Educationsurvey,duringthe19992000school
year,5.2percentofteacherswereabsenton
anygivendayonaverage.Thattranslatesinto
9.4daysoutofa180-dayschoolyear.During
the200001schoolyearinNewYorkCity,the
annualrateofabsencesreached11.3daysper
teacher.Theseratesaremuchhigherthanin
otherexecutiveorprofessionalemployment.
14
Podgurskysresearchsuggeststhatifteacherstooksick
leaveatthesamerateasotherprofessionalemployees,
theywouldtakeonly3.06daysper180-dayschool
year.Assumingthatsubstituteteacherscost$100per
day,Table4indicatesthatthedifferencebetween3.06
sickdaysandthe9.36daysthatteachersactuallytake
translatesintoannualcostsof$43perstudent,or.52
percentofschoolbudgets.
Table 3. 0ost of Pa|d Profass|ona| 0ava|opmant
0ays
Averageteachersalaryperday $245
Typicalnumberofteachingdaysperyear 180
Mediannumberofpaidprofessionaldevelopment
days*
5
Cost per pupil of teacher salary for 5 contracted
professional development days
$84.27
Portion of expenditures attributed to teacher
salary cost for 4.5 days***
1.02%
*TheStatusoftheAmericanPublicSchoolTeacher,NationalEducation
Association,2001.
5
5. Class-Size Limitations: Class-sizelimitations
havebeenapopularschoolreformstrategyinrecent
years.Thefederalgovernmentandanumberofstate
governmentshaveappropriatedextrafundstolower
classsizes,whileballotinitiativesinstatesincluding
CaliforniaandFloridahavemandatedmaximumclass
sizesforallschools.Theseinitiativeshavebeenmirrored
inasignifcantnumberofteachercontractsrequiring
someformofclass-sizereduction.Butschool-orschool-
system-wideclass-sizereductionsareexpensiveandits
notclearthattheyproduceresultssuffcienttojustifytheir
highcost.
Researchhasfoundthatstudentscanbeneftfrom
smallclasses,buttheevidencesuggeststhatclass-size
limitationsaremosteffectivewhentheytargetyounger
anddisadvantagedstudents,andwhentheyresultin
signifcantreductionsinclasssize.
15
Teachercontract
provisionsthatapplytoabroadrangeofstudents,orthat
produceonlymodestreductionsinclasssize,havenot
hadmucheffect.
Somecontractsspecifyalimitedsizeforallclasses,
ordifferentminimumclasssizesfordifferentgrades.
16
Somelimitclasssizesforspecifcgroupsofstudents,
likestudentswithdisabilitiesorEnglishlanguage
learners.
17
Otherslimitthenumberofstudentsthata
teachercanteachinagiventerm.Suchmandatesmake
itdiffcultforlocalschoolleaderstocreatethebestmix
ofclasssizes.Theexactnumberofcontractswithsome
formofclass-size-reductionprovisionisunknown.A
reportfromtheMackinacCenterforPublicPolicy,athink
tankthatpromotesfree-marketpolicies,suggeststhat
morethanathirdofMichiganscollective-bargaining
agreementsdictatelowerclasssizes.
18
Largeschool
districtswithclass-size-reductionprovisionsintheir
teachercontractsincludeBostonandNewYorkCity,and
otherslikeSeattlehavelimitsonclasssizesforcertain
typesofstudents.
Anumberoffactorsmustbetakenintoaccountto
calculatethetrueadditionalcostofprovisionstoreduce
classsizes.AstudybyWestEd,anindependenteducation
researchorganization,identifed14suchfactors.
19
They
includethetypicalclasssizebeforeimplementationof
class-sizereduction,thecostofnewteachershiredto
reduceclasssize(newteachersmaynotcostthesame
asexistingteachers),andthecostofbuildingmore
classrooms.Unfortunately,thisinformationisnotavailable
foralldistricts.ThesamestudyfoundthatCalifornias
class-size-reductioninitiativeimposedcostsrangingfrom
$0to$1,000perstudent.
Thisanalysisusesaconservativeestimateofthe
typicalclass-size-reductionpolicybecausethereare
differenttypesofcontract-basedclass-reduction
policies,andtheexactpercentageofcontractswith
suchpoliciesisunknown.Costsarecalculatedbased
ona5-percentreductioninclasssize,whichwould,
forexample,reducethenumberofstudentsinaclass
from30to28.5.Manycontractprovisionsmandate
signifcantlylargerreductions.Theestimatealsois
basedononlythedirectcostsofaddingteachers,and
doesnotincludeindirectcostssuchasbuildingnew
classrooms.
AsTable5 shows,suchapolicywouldtranslateinto
annualcostsof$187perstudent,or2.26percentof
schoolbudgets.
Table 4. |ncramanta| 0ost of H|ghar 8atas of S|ck/
Parsona| 0ays Than |n 0thar Profass|ons
Averagenumberofteachersick/personal
absencesper180daystakenforteachers*
9.36
Averagenumberofsick/personaldaysper180
daystakenforprofessionals*
3.06
Costofasubstituteteacherperday** $100
Cost per pupil of substitutes to cover difference
in sick days taken by teachers and other
professionals
$43.27
Portion of expenditures for substitutes to cover
difference in sick days taken
.52%
*ComputedfromfguresreportedbyPodgursky(2003),whichcites
BureauofLaborStatisticsastheoriginalsource.
**Averagestakenfromasamplingoffveurbandistrictscontracts.
Table 5. 0ost of 0|ass-S|za-8aduct|on Po||c|as
Teachersalarycost(includingbenefts)per
pupil*
$3,747.99
Per pupil cost (teacher costs only) of policies
that reduced class size by 5%
$187.40
Portion of expenditures attributed to costs
of reduced class sizes by 5 % (e.g. reducing
average class size from 30 to 28.5)
2.26%
*Assumesaloadingrateof20.2percent.Forthesourceofbeneftdata,
seeM.Podgursky,IsThereaQualifedTeacherShortage,Education
Next,2006.

6. Mandatory Use of Teachers Aides:Asignifcant
numberofteachercontractsrequirethatdistrictshire
aidestoassistteachersintheirclassroomduties.Aswith
provisionsthatreduceclasssizes,thesepoliciesvary
fromdistricttodistrict.Somecontractsrequirethata
certainnumberofaidesbehiredperclassroom,school,or
certaintypeofstudent,suchasEnglishlanguagelearners.
Somespecifythatteachersarenotrequiredtosupervise
studentsduringnon-academictimes(suchaslunchor
recess),thusrequiringaidestobehiredforsupervision
duringtheseperiods.Othersrequireaidesforclasssizes
aboveacertainthreshold.
Teachersandparentsoftensupportthehiringofaides,
claimingthattheylightentheworkload,helpmaintain
orderintheclassroom,andallowformoreindividualized
attentiontostudents.Butaswithmanyofthetypical
contractprovisionsdescribedinthisreport,theresearch
suggeststhatmoneyspentonteachersaidesdoesnot
yieldincreasedstudentlearning.
20
SASSdataindicatethaturbanschooldistrictsemployan
averageofoneaideforevery61students.TheNEAreports
thattheaveragesalaryofateachersaideis$18,052.Itis
likelythatmostdistrictsrequiresomenumberofteachers
aidesforvariouspurposes.Therefore,theentirecostof
hiringaidesshouldnotbeattributedtoteachercontracts.
Thisanalysisconservativelyassumesthatteachercontracts
increasethenumberofaideshiredby25percentabove
andbeyondthenumberthatwouldbehiredotherwise.
AsTable6 shows,theannualcostfor25percentmore
aidesis$74perstudent,or.89percentofschoolbudgets.
7. Above-Average Health and Insurance Benefts:
Manyschooldistrictsfacesignifcantfnancialchallenges
inprovidinghealthbeneftsfortheiremployees.Some
arefacingbankruptcyasaresultoftheirhealth-care
obligations.
21
Butwhilemanyemployersareexperiencing
fnancialstressduetothesoaringcostofhealthcare,the
costtoschooldistrictsisexacerbatedbythefactthat
teachers,onaverage,receiveunusuallygeneroushealth
benefts.Teachers,likeallpeople,needhealthinsurance,
soitwouldbeunreasonabletoattributetheentirecost
ofhealthbeneftstoteachercontracts.Thisanalysis
calculatesthedifferencebetweenthebeneftsenjoyedby
teachersandthebeneftsenjoyedbyprofessionalworkers
intheprivatesector.
AsMichaelPodgurskyhasnoted:
AccordingtorecentlyreleasedDepartment
ofLabordata,insurance(primarilyhealth
insurance)andretirementcontributionsare
asubstantiallylargerpercentageoftotal
compensationforteacherscomparedwith
professionalemployeesinprivate-sector
employment.
22
BasedondatafromthefederalBureauofLaborStatistics,
Podgurskysanalysissuggeststhatteacherhealth
andotherinsurancebeneftsamountto9.1percentof
theaveragesalary,comparedto6percentforother
professionals.Table7 showsthatthedifferencebetween
6percentand9.1percenttranslatesintoannualcostsof
$106perstudent,or1.28percentofschoolbudgets.
8. Above-Average Retirement Benefts: Teachers
needincomesecuritywhentheyretire,justastheyneed
healthbenefts.Butteachersretirementbenefts,liketheir
healthbeneftsare,onaverage,unusuallygenerouswhen
comparedtothebeneftsreceivedbyemployeesinthe
Table 6. 0ost of Prov|s|ons that hacass|tata
|ncraasad Usa of Taachars A|das
Averageaidesalary $18,052
Numberofstudentsperaide 61
Per pupil cost (aide salary only) of provisions that
necessitate 25% more aides
$73.98
Portion of expenditures attributed to costs of
increased aides by 25%
.89%
Table 7. |ncramanta| 0ost of Haa|th/|nsuranca
8anahts that Fxcaad Thosa of 0thar Profass|ona|s
Averageteachersalaryplusbenefts* $50,000
Percentageofannualsalarypaidforhealthandother
insurancebeneftsforteachers
9.1%
Percentageofannualsalarypaidforhealthandother
insurancebeneftsforprivatesectorprofessionals
6%
Per pupil cost of the difference between health/
insurance benefts for teachers and other
professionals
$106.46
Portion of expenditures attributed to difference
in health/insurance beneft rates of teachers and
other professionals
1.28%
*SASSdata200304.
7
privatesector.Likemanypublic-sectoremployees,most
teachersreceiveatraditionaldefnedbeneftpension
uponretirementthatguaranteesamonthlyincomebased
onhowmuchtheyearnedwhentheywereemployedand
howmanyyearsofservicetheyaccrued.Mostprivate-
sectoremployees,bycontrast,receivepensionbenefts
intheformofdefnedcontributionplans,inwhich
employerscontributeacertainamountofmoneyintoa
401(k)-typeretirementfund.Defnedbeneftpensionsare,
asarule,moregeneroustoemployeesandmorecostly
toemployers.Thisanalysiscalculatesthedifference
betweentypicalprivate-sectorplansandthosemandated
byteachercontractprovisions.
Podgurskysanalysis,basedonBureauofLaborStatistics
data,suggeststhatretirementcostsamountto5.9
percentoftheaverageteacherssalary,comparedto
privatesectorretirementcostsof3.8percentofthe
averagesalary.AsTable8shows,thedifferencebetween
5.9percentand3.8percenttranslatesintoannualcostsof
$72perstudent,or.87percentofschoolbudgets.
Unusuallygeneroushealthandretirementplanscreate
incentivesforteacherstoenterandstayintheprofession.
Manyschooldistricts,asaresult,havedisproportionate
numbersofseniorteachers.Therearedoubtlessmany
seniorteacherswhoseyearsofexperienceprovide
irreplaceablebeneftsfortheirstudents.Butthe
previously-citedresearchsuggeststhatmore-experienced
teachersare,onaverage,nomoreeffectivethanteachers
withmodestexperience,andthereissomeevidence
thattheoldestteachersmaybelesseffective.Asa
result,typicalhealth-andretirement-contractprovisions,
combinedwithannualsalaryincreasesbasedonyears
ofexperience,couldbecreatingbeneftlockamong
veteranteachersthatprecludesschooldistrictsfrom
hiringmoretalentedteacherswhoareyoungerandless
expensive.
Adding It Up
Takeninisolation,someoftheprovisionsdescribed
abovemayseeminconsequential,amountingto1
percentorlessofschoolspending.Butwhenthecosts
oftheseprovisionsareaddedtogether,theyamount
toasignifcantpercentageofallschoolresources.As
Table9 shows,theeightprovisionsdescribedabove
adduptoalmost19percentofallschoolspending.This
amountstoroughly$77billioninschoolspendingperyear
nationwide.
Thisisverylikelyaconservativeestimateoftheamount
ofmoneylockedupbymostteachercontracts,sinceit
onlyrepresentsthecostofcommonprovisions.Many
contractscontainother,less-commonprovisionsthatare
alsoexpensive:Somerequirethatsubstitutesremainon
payrollevenwhennotneeded,whileothersprescribethat
districtssetasidemoney,often$100,000ormore,for
teamsofunionmemberstospendastheyseeft.Some
districtsevengrantextrapaidtimeoffforteachersto
renewtheirdriverslicenses.
Table 8. |ncramanta| 0ost of 8at|ramant 8anahts
that Fxcaad Thosa of 0thar Profass|ona|s
Percentageofannualsalarypaidforretirement
beneftsforteachers*
5.9%
Percentageofannualsalarypaidforretirement
beneftsforprivatesectorprofessionals*
3.8%
Per pupil cost of the difference between
retirement benefts for teachers and other
professionals
$72.12
Portion of expenditures attributed to difference
in retirement beneft rates of teachers and other
professionals
.87%
*SASSdata200304.
Table 9. Tha Tota| 0ost of 0ommon Taachar 0ontract
Prov|s|ons
Contract Provisions
Cost as a
percent of
school budgets
Teachersalaryincreasesbasedonyearsof
experience
10.01%
Teachersalaryincreasesbasedon
educationcredentialsandexperience
2.10%
Schooldayssetasideforpaidprofessional
development
1.02%
Aboveaveragepaidsickandpersonaldays .52%
Classsizelimitations 2.26%
Mandatoryuseofteachersaides .89%
Aboveaveragehealthandinsurance
benefts
1.28%
Aboveaverageretirementbenefts .87%
TOTAL 18.95%
8
Frozen Assets
Thereareanumberofwaystorepurposethebillionsof
dollarslockedupinthesecommoncontractprovisions.
Someeducationpolicyanalystshavecalledforincreasing
teachersbasesalariesasawaytoattractmoreand
betterteachersintotheprofession.TheNEAhascalled
for$40,000minimumsalariesforallteachers(theaverage
startingsalaryiscurrentlyabout$31,000),notingthat
accountantstypicallystartat$44,500andsoftware
developersstartat$54,000.
23
Suchaproposalwouldcost
approximately$680perpupilnationwide,or8.2percent
ofcurrentschoolbudgets.Thatislessthanhalfofthe
resourcescurrentlytiedupincommonteachercontract
provisions.
Therealsohavebeencallsforthereformofteacher
compensation.Somestatesanddistricts,forexample,
havebeguntoofferadditionalpayforcredentialslike
certifcationbytheNationalBoardforProfessional
TeachingStandards(NBPTS).Othershaveproposed
givingbonusestoteacherswillingtoteachinhigh-
poverty,low-performingschools,teacherswithhard-
to-fndsubjectspecializationslikescienceandspecial
education,andteacherswhoproduceunusuallylarge
gainsinstudenttestscores.Butteacher-contract
provisionsmakesuchreformsdiffculttoimplementin
manyplaces.Provisionsthatmandatethatsignifcant
amountsofmoneybepaidtoteachersonthebasisof
theirseniorityandeducationcredentials,forexample,also
oftenprohibitdistrictsfrombasingsalarylevelsonfactors
thatpolicymakershavesuggestedmaypromotehigher
studentachievement.
Changesincommoncontractprovisionswouldalsofree
upfundingtoincreasethesizeoftheawardsunderthe
newcompensationmeasures,andthushelpincreasethe
incentivestheygivetoteacherstodosuchthingsaswork
inhigh-povertyschools.Currentsalaryincentivesofthat
sorttypicallyamounttoonlyafewthousanddollarsor
less,notenoughtoprovidestrongincentivesorchange
thedynamicsoftheteacherlabormarket.Indeed,many
incentiveshavebeenproposedforyears,butrelatively
few(withtheexceptionofNBPTScertifcation)havebeen
putintopracticeonawidescale.Moneyisoftenamajor
stumblingblocktoimplementation.
Oneplanthatwouldprovideanadditional$25,000in
compensationto25percentofallteachers,andan
additional$10,000toanother25percentofallteachers,
wouldincreasethataverageschoolbudgetby$601
perpupil,or7.25percent.Thisisjustoverathirdof
theamountofmoneytiedupinthecommoncontract
provisionsweexaminedforthisreport.
Schooldistrictscouldalsorepurposefundstogive
schoolsfexiblepotsofmoneytomeetthespecifcneeds
oftheschoolsteachersandstudents.Atoneschool,
teachersandadministratorsmightcollectivelydecide
tousesuchfundstocreateintensive,ongoingschool-
basedprofessionaldevelopmentprogramsforteachers.
Anotherschoolmightinvestinnewtechnology,orchoose
toholdadditionalclasseslaterinthedayoronSaturday
foracademicallyat-riskstudents,payingparticipating
teachersanadditionalsalaryamount.Insteadofusing
adefned-beneftpensionplanthatdisproportionately
beneftsteacherswhostayinthesystemfordecades,a
schooldistrictcouldchoosetoprovidemoregenerous,
portable,up-frontretirementbeneftsasameansof
recruitingyoungerteacherswhoexpecttochange
professionsmultipletimesthroughouttheircareers.
Suchstepswouldnotreducefundingforteacher
compensation;rather,theywoulddistributecompensation
differently,inwaysthatpotentiallywouldbeofgreater
benefttostudents.Andgiventhatredistributingteacher
compensationandchangingteacherworkingconditions
wouldlikelybecontroversialwithintheteaching
profession,schooladministratorswhoimplementsuch
changeswouldhavetotakestepstohonorcommitments
oncompensationandworkingconditionsthattheyve
madetocurrentteachers.
Butitsclearthatschooladministratorsandteacher
leadershavemoreopportunitiesthantheyrealizeto
makeandpayforchangesthatpromotehigherstudent
achievement.Theyneedonlytakeahardlookattheir
teachercontracts.
9
ENDNOTES
1
FrederickHessandAndrewKelly,Scapegoat,Albatross,
orWhat?inCollective Bargaining in Education,eds.Jane
HannawayandAndrewRotherham(Cambridge,MA:Harvard
EducationPress,2006).
2
Rice,JenniferKing,Teacher Quality: Understanding the
Effectiveness of Teacher Attributes(Washington,D.C.:
EconomicPolicyInstitute,2000).
3
Ibid.
4
Thisamountreferstotheaverageteachersalaryinacentral
city.Thisamountwasusedinsteadofthenationwideaverage
teachersalaryof$44,400asthecalculationsdonehereare
intendedtoshedlightontheeffectoflabornegotiationsin
largecities,wherecontractsaremostofteninthespotlight.
5
Survey and Analysis of Teacher Salary Trends(Washington,
D.C.:AmericanFederationofTeachers,2004).
6
The$8,287fgureincludesalloperatingexpendituresforPK
12educationandexcludesexpendituresforadulteducation,
communityservices,anddebtservice.
7
Ibid.
8
Increasing the Odds: How Good Policies Can Yield Better
Teachers(Washington,D.C.:NationalCouncilonTeacher
Quality,2005).
9
Becausedataonaverageeducationcreditsearnedarenot
available,analysisoftheirassociatedcostswasntincluded.
10
ConsortiumforPolicyResearchinEducation,CPREPolicy
Brief:Helping Teachers Teach Well: Transforming Professional
Development,June,1995.
11
Ibid.
12
The Status of the American Public School Teacher
(Washington,D.C.:NationalEducationAssociation,2003).
13
See,forexample,M.N.Olson,Identifying Quality in School
Classrooms: Some Problems and Some Answers(NewYork:
MetropolitanSchoolStudyCouncil,1971).
14
M.Podgursky,FringeBenefts,Education Next,2003.
15
TennesseesProjectSTARshowedthatinastudy,dramatic
classsizereductions(to1217studentsperclassas
comparedwith2226)yieldedpositiveeffectsonstudent
achievement.
16
See,forexample,NYCsCollectiveBargainingAgreementas
discussedinD.Ballou,Shackling Principals Leadership(New
York:ManhattanInstituteforPolicyResearch,1999).
17
See,forexample,SeattlePublicSchoolsCollectiveBargaining
Agreement.
18
Collective Bargaining: Bringing Education to the Table
(Midland,MI:MackinacCenterforPublicPolicy,1998)Online
athttp://mackinac.org/article.aspx?ID=1400(Accessed
9/20/06).
19
JoanMcRobbie,JeremyFinnandPatrickHarman,Class Size
Reduction: Lessons Learned from Experience(SanFrancisco:
WestEd,1998).
20
J.BoydZahariasandH.Pate-Bain,EarlyandNewFindings
fromTennesseesProjectSTARinHow Small Classes Help
Teachers Do Their Best(Philadelphia:LaboratoryforStudent
SuccessatTempleUniversityCentreforResearchinHuman
DevelopmentandEducation,2000).
21
GlennCook,Gathering Storm(Alexandria,VA:American
SchoolBoardJournal,2006)Onlineathttp://www.asbj.com/
current/coverstory.html(Accessed5/23/06).
22
M.Podgursky,IsThereaQualifedTeacherShortage,
Education Next,2006.
23
The Bills Come Due(Washington,D.C.:NationalEducation
Association,2005)Onlineathttp://www.nea.org/
neatoday/0510/coverstory.html(Accessed9/25/06).
10
Tachn|ca| Appand|x: 0a|cu|at|on of 0osts
Cost of Salary Increments for Masters Degrees and Longevity
Averageteachersalary(withoutsupplements)peryear* $45,400
Averagenumberofpupilsperteacheremployed* 14.56
Averagesalaryincrementforamastersdegree* $5,200
Averageportionofteacherswithamastersorabove* 48.70%
Cost per pupil of salary for masters degrees $173.93
Portion of per pupil expenditure attributed to compensation for masters 2.10%
Averagesalaryincrementperyearofexperience* 2.58%
Averageyearsofexperience** 14.8
Cost per pupil of salary for longevity $829.88
Portion of per pupil expenditure attributed to longevity 10.01%
*Takendirectlyfrom,orcomputedfromNCES200304fguresforlarge/urbandistricts.
**ReportedbyAFT:Dataonnationaltrendsinteachersalaries.
Cost of Paid Professional Development Days
Average teacher salary (without supplements) per day* $245
Typicalnumberofteachingdaysperyear** 180
Averagenumberofpaidprofessionaldevelopmentdays** 5
Cost per pupil salary for masters degrees
Average per pupil expenditure ($8,287.06)
Average number of pupils per teacher employed
Average salary increment for
a masters degree
Average portion of teachers with
a masters degree or higher ( ) ( )
Average teacher salary per day
Average salary increment for
masters degree ( )
Average portion of teachers with masters or higher
Average first-year salary assuming 2.58% increase
for 14 years ($30,783) ( )
Cost per pupil of salary for longevity
Typical number of
teaching days per year
Average number of paid
( ) ( )
11
Tachn|ca| Appand|x: 0a|cu|at|on of 0osts (cont|nuad}
Cost of Paid Professional Development Days (continued)
Cost per pupil of teacher salary for fve contracted professional development days $84.27
Portion of per pupil expenditure attributed to teacher salary cost for 4.5 days 1.02%
*ComputedfromNCES200304fguresforlarge/urbandistricts.
**ReportedmedianinNEAsStatusoftheAmericanPublicSchoolTeacher(2001).
Incremental Cost of Higher Rates of Sick/Personal Days Than in Other Professions
Averagenumberofteachersick/personalabsencesper180daystakenforteachers* 9.36
Averagenumberofsick/personaldaysper180daystakenforprofessionals* 3.06
Costofasubstituteteacherperday** $100.00
Cost per pupil of substitutes to cover difference in sick days taken by teachers and other professionals $43.27
Portion of per pupil expenditure for subs to cover difference in sick days taken .52%
*ComputedfromfguresreportedbyPodgursky(2003)whichcitesBureauofLaborStatisticsastheoriginalsource.
**Averagestakenfromasamplingoffveurbandistrictscontracts.
Cost of Class Size Reduction Policies
Teacher salary cost (loaded with benefts) per pupil** $3,747.99
Average number of paid
Typical number of teaching
days per year
Average number of pupils
per teacher employed
( ) ( )
Cost per pupil of teacher salary for five contracted professional development days
Average number of sick/personal absences per 180 taken for teachers
Average number of sick/personal days per 180 taken for professionals ( ) ( )
Cost of a substitute
teacher per day
Average per pupil expenditures ($8,287.06)
Cost per pupil of substitues to cover difference in sick days taken by teachers and other professionals
Average benefit load rate (20.2%) Average teacher salary per day
12
Cost of Class Size Reduction Policies (continued)
Per pupil costs (teacher salaries only) of policies that have reduced class sizes by 1% $37.48
Per pupil costs (teacher costs only) of policies that have reduced class sizes by 10% $374.80
Per pupil cost (teacher costs only) of policies that reduced class size by 5% $187.40
Portion of per pupil expenditure attributed to costs of reduced class sizes by 5 %
(e.g. reducing average class size from 30 to 28.5)* 2.26%
*BasedonNCES200304reportedaverageexpenditureof$8287.06.
**Basedonanaverageloadingrateof20.2%(seeendnote22).
Cost of Provisions that Necessitate Increased Use of Teacher Aides
Averageaidesalary $18,052
Numberofstudentsperaide 61
Per pupil cost (aide salary only) of provisions that necessitate 25% more aides $73.98
Portion of expenditure attributed to costs of increased aides by 25% .89%
( )
Average teacher
salary per day
Average benefit
load rate (20.2%)
( )
Average teacher
salary per day
Average benefit
load rate (20.2%)
0.99
( )
Average teacher
salary per day
Average benefit
load rate (20.2%)
( )
Average teacher
salary per day
Average benefit
load rate (20.2%)
0.90
( )
Average teacher
salary per day
Average benefit
load rate (20.2%)
( )
Average teacher
salary per day
Average benefit
load rate (20.2%)
0.95
Per pupil cost (teacher costs only) of policies that reduced class size by 5%
Average aide salary
Number of students
per aide
Average aide salary
( ) ( )
Number of
students per aide
0.75
Per pupil cost (aide salary only) of provisions that necessitate 25% more aides
13
Incremental Cost of Benefts that Exceed Those of Other Professionals
Averageteachersalaryplussupplements* $50,000
Percentageofannualsalarypaidforhealthandotherinsurancebeneftsforteachers 9.1%
Percentageofannualsalarypaidforhealthandotherinsurancebeneftsforprivatesectorprofessionals 6.0%
Per pupil cost of the difference between health/insurance benefts for teachers and other professionals $106.46
Portion of expenditure attributed to difference in health/insurance beneft
rates of teachers and other professionals 1.28%
Percentage of annual salary paid for retirement benefts for teachers 5.9%
Percentage of annual salary paid for retirement benefts for private sector professionals 3.8%
Per pupil cost of the difference between retirement benefts for teachers and other professionals $72.12
Portion of expenditure attributed to difference in retirement beneft rates of
teachers and other professionals .87%
*SASSdata200304.
Percentage of annual salary paid for health
and other insurance benefits for teachers
Percentage of annual salary paid for health
and other insurance benefits for private
sector professionals
Average teacher salary plus supplements
( ) ( )
Per pupil cost of difference between health/insurance benefits for teachers and professionals
Percentage of annual salary paid for
retirement benefits for teachers
Percentage of annual salary paid for
retirement benefits for private sector
professionals
Average teacher salary plus supplements
( ) ( )
Per pupil cost of difference between retirement benefits for teachers and professionals

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