America's Education Problem is a Problem of Incentives

This article is cross posted at etrevino.net.

My first teaching job was in a working class urban high school in the Boston area. For a conservative Southerner raised on a series of military bases by Texans, the workplace culture was, to put it mildly, a shock. The teachers did not like the new principal (who had hired me) and so went out of their way to obstruct his policies. They used obscure union rules to force him to personally hand deliver each teacher’s substitution assignments each day, just to make his life a little bit more difficult. In return, he made their lives into a little slice of hell with every method allowed to him. This only made the union more recalcitrant. The principal, though he had worked as a teacher for years, shared the public’s view that teachers (particularly unionized ones) were more concerned with their pay than with the students under their charge. Except for a select few teachers, I largely shared this opinion: there teachers who were bleeding the system dry and not doing their jobs. This is not a particularly unique view. Across the United States, this idea has gained more and more traction. Its culmination may be the current standoff in Wisconsin, where Governor Scott Walker is seeking to reduce public sector unions’ collective bargaining power. Protesting most vociferously are the teachers’ unions. It remains to be seen whether they can force Governor Walker and the Republican legislature to back down. There is no doubt, however, that they represent a widespread perception that the teaching profession has failed.

The attack on the teaching profession springs from several sources, many of them cultural, but the underlying theme is that teachers are paid too much. Critics point to the fact that teachers are only scheduled to work seven hours a day, 180 days a year. This is far below the eight hours a day, 250 days a year that most Americans work. In a place like Milwaukee, when you add in benefits, the average teacher gets $101,091 a year. To make the equivalent hourly wage a contract worker would need to charge about $80 an hour and a salaried employee would need to be paid approximately $50 an hour. That’s an extraordinary amount, but it doesn’t reflect the teacher’s actual workload. Most teachers’ days do not end when the school doors close. Their work tends to continue into the night for 10-12 hour days. This makes the compensation more sensible—$50 for a contract employee, $31 for a salary employee—but to the general public this is still unaccountably high.

That’s born out of two problems, the first that teachers and students have summers off. It would appear that teachers could easily supplement their income by working a summer job, but those part-time manufacturing and service jobs have either left the country or are being filled by cheaper teenage labor. The second problem that creates the impression that teachers are paid too much is the generally poor state of the United States educational system. Parents see their taxes going to support school systems that are rife with problems. In New York City, hundreds of teachers are paid their full salary while on enforced leave because of professional misconduct. Students’ test scores have been slipping for over a generation. Attempts to fix this problem (such as No Child Left Behind) have only revealed more problems than they have fixed. This understandably makes parents restive.

This is thrown into sharper relief when you compare the general sentiment against teachers with the esteem that they are held in some of the best American educational districts. Places like Brookline, Massachusetts, and Fairfax County, Virginia, levy heavy taxes upon their constituents. That money is almost entirely spent on educating students to the highest quality possible. In these districts, parents see that their money is being well spent and complaints are few. It is not a stretch to imagine that the reason constituents accept such high taxes is because they see that they are getting good “bang for their buck.” This leads me to presume that the pushback against teachers and teachers’ unions has to do with the perception that their tax money is being wasted. People do not feel that current teacher contracts give them good value for their money. In other words, teachers are overpaid in relation to how well they educate our students. If parents could guarantee that their money was well spent, perhaps they would be far more willing to direct $101,091 to each teacher.

Workers in private industry represented by unions certainly face accusations of substandard work and laziness. It is not often acknowledged, however, that corporations and unions can still work together to produce high quality goods that sell well. Corporations want to maximize profits for shareholders and union members want to maximize their share of the profits. The way to make more money for both sides is to make better products for the least amount of money possible. This creates a modus vivendi between unions and corporations, because no one wants to kill the goose that lays the golden eggs. Of course, this doesn’t always work out: people can be obstinate and destructive and corporations can still fall victim to the economy. Nevertheless, corporations and unions can find a middle ground.

Public sector unions do not have any such middle ground with the government. One reason for this is union lobbying. Unions have been involved with politics since they first began to organize. This was generally part of an intent to turn back laws against workers organizing. In some countries, unions actually became political parties of their own. In the United States, organized labor spends considerable sums of money to help friendly candidates. When such an official negotiates with his unionized employees, he knows that he’s negotiating with the folks who got him elected. There is no inclination to “draw the line” on public sector salaries and benefits.

Furthermore, private sector unions and corporations share the same measure of success: profits. Public sector unions measure success by the salary and benefits they negotiate, whereas taxpayers and government measure success by the quality of education. There have been several attempts to link teacher salary with student outcomes, but they all founder on union intransigence and the problem with measuring student success. This also penalizes teachers for working in the low-income areas where they are needed most, because socio-economically disadvantaged students are less likely to perform well on tests, hurting teacher salaries.

Teachers, then, have only intrinsic incentives to perform well. That is, good teachers are the ones who have a personal mission to teach well. There is nothing else in their pay and benefit structure that provides external incentives. Improving education in the United States means providing external benefits to teachers so that the do not become demoralized and lose their intrinsic incentives. The only way around this is to provide several degrees of incentives. The first should be a social incentive. Parents, teachers, and students should be able to obtain information about teacher, school, and student performance. This will move towards creating a more informed public who can better choose the best school system for their children.

Teachers should also be paid better for doing better. This is tricky, because setting student standards is a politically charged process. Teachers’ unions object to using student performance for several reasons, but the most valid reason is that sometimes teachers get a body of students who are unprepared for school. The teacher in this classroom then spends a great deal of time “catching up” the students and may not be able to meet all of the milestones the state or county has set. The alternative, not often enough mooted, is that teachers should be measured on student improvement, not student outcomes. Thus, a fourth grade teacher who receives students performing at the second grade level should be rewarded if he can advance the students’ education close to what is expected at the fourth grade level, even if he is unable to meet all of the standards expected of a fourth grader, because he has effectively taught students in a year what normally takes a year and a half. Conversely, there should be a negative incentive. Teachers who consistently underperform make their colleagues’ job harder, so the underperformers should be fired.

The last part of the solution is the most controversial. We need to provide parents school choice. The information transparency expected of schools should be used to let parents decide where their children will be educated. This is, of course, subject to limitations, not the least of which is the fact that schools will have to have a sensible criteria to determine which students they will or will not accept. School choice has a very good effect upon student performance. Parents and students report greater satisfaction with the education system, because they have a stake in it. Student attendance is better and graduation much more likely.

Within the United States, there is a consensus that education is important. An educated child will make more money in his lifetime. He will perform tasks that create wealth and make the United States a better place. Debate in America centers on the fact that most taxpayers do not believe that their money is being well spent. Teachers are being more and more perceived as leeches and less and less as key drivers of American performance and innovation. This is a political failure that can only be remedied with a radical rethink of American education. The ideas are out there, only the execution is lacking.