Could a Federal Minimum Salary for Teachers be a Reality in the U.S.?

US lawmakers propose increasing teachers' minimum salaries to $60,000 in an effort to address a nationwide teacher shortage and looming 'mass exodus'

Educators play a crucial role in shaping the future of our society. They are responsible for imparting knowledge and skills to the next generation, and yet, despite the importance of their work, many teachers struggle to make ends meet. A Pew Survey before the pandemic found that one-in-six U.S. teachers work second jobs, and not just in the summer. There has generally always been fairly broad support for increasing teacher pay.

A new bill recently introduced in Congress has sparked an interesting debate: this bill authorizes funding of four-year grants to states and school districts that would establish a minimum salary of $60,000 per year for K-12 teachers. In order to receive those grants, states must ensure that the minimum salary for a full-time teacher starts is not below $60,000. The bill also authorizes the Secretary of Education to spend no more than 4% of the funds on a national campaign to increase awareness of the importance of teachers and to encourage more people to consider teaching as a career.

The notion that we are experiencing a teacher shortage isn’t new; we’ve been talking about it since the 1970s. Each decade, a shrinking share of college students earn bachelor’s degrees in education. In 1971, about 21% of all bachelor’s degrees were conferred in education. Fast forward to 2020 and that figure is now at just 4%. One of the main barriers for students considering an education degree is that teaching isn’t considered a lucrative and supported career. The data bears this out: between the 1970s and 1990s, teachers earned an average of about 5-10% less than other college graduates. Since the 2000s, the teacher pay penalty has gotten worse, especially for men:

As we enter another year of debating how to solve the teacher shortage, most people at least recognize it as an issue facing their community. When surveyed before the 2022 school year about potential solutions, nearly 3-in-4 Americans said they were in favor of raising teacher pay. No other recommendations had nearly as much support and initially appears like there may be some public support for a teacher minimum wage.

This widespread support, however, may come from a lack of information about how much teachers earn. The same survey respondents were also asked a series of questions on the salaries of public school teachers in their state, including how much those teachers are paid on average and how much the respondents think their state’s teachers should be paid.

Americans tend to slightly underestimate how much elementary, middle, and high school teachers are paid in their state. The ideal salaries, however, are fairly close to the recommended minimum salary proposed in the American Teacher Act. Oh, and it also happens to be just about the same as the actual real-world salaries of teachers in their state:

That’s right. It’s likely that Americans believe teachers are underpaid because they don’t know how much teachers are actually paid. While respondents generally thought high-school teachers should be paid more than middle school and elementary school teachers, the salaries of all three groups are relatively similar. This likely reflects how the survey questions were asked since respondents were only provided options in $10,000 increments and they could not enter different answers.

These results may mean less support for a national teacher minimum wage if half of all teachers are already being paid what the bill recommends they be paid. It’s important to keep in mind that the values above were median values and that value varies drastically across the United States. In states like California and New York, the median salary for secondary teachers is above $90,000 per year. A number of other states have median salaries closer to $50,000 per year. A national minimum wage for teachers would only affect states where teachers are earning less than that wage, and that means states like Missouri and Alabama would see more than half of their teachers earning more:

The second thing to keep in mind is that the median salary represents the distribution of all workers, regardless of experience. The national average starting salary was $41,770 in the 2020-21 school year, and raising pay to bring the minimum to $60,000 would result in pay increases across the pay scale. Teachers are often paid along a step scale in which each additional year of experience means increases in pay. Bringing starting teachers up to $60,000 would result in all teachers moving up as well since the scale would need to be adjusted to start at this new higher level. Legislators hope that this higher starting pay would address an estimated 36,500 teacher vacancies by encouraging students to major in education and would also reduce the high turnover rate for teachers.

The effects of a minimum wage are traditionally analyzed (and debated) in competitive labor markets, in which supply and demand dictate some sort of market wage. According to that model, minimum wage policies will affect the market whenever they are set above the competitive wage rate. In this case, states like Alabama and Missouri, but not likely in California and New York. At those higher wages, firms would reduce the number of workers they want to hire, but new workers would enter the labor market for the new, higher wages. Theoretically, there would now be more workers than there are jobs available and these workers would be considered unemployed.

There are a number of issues with this sort of analysis, but the main critique is that it assumes competitive labor markets. When labor markets aren’t competitive, the results can be very different. Noncompetitive labor markets may exist when firms have some sort of hiring power over the labor force or whenever the workers can’t (or won’t) relocate to other higher-paying jobs. In these non-competitive scenarios, the market ends up pushing wages below the competitive outcome. A minimum wage set above these lower has the ability to increase wages and add employment. Here’s the graphical explanation if you’re curious:

This is a fairly interesting bill because it seems to address a national sentiment that our teachers are underpaid. At the same time, it raises some serious concerns about the ability of legislators to determine the minimum pay for a particular occupation. A large percentage of Americans support higher salaries for their teachers, however, a large percentage of Americans don’t support government intervention in markets.

While the outcome will be determined in Washington DC, it will be interesting to see how the country reacts to such policies. It’s easy to post on social media that you support paying teachers more, but it’s completely different when you may need to pay higher taxes to make that happen. For now, the bill has only been introduced and has been co-sponsored by 8 Democratic lawmakers. As of this writing, the Congressional Budget Office has not calculated cost estimates for this policy.

• In the 2017–18 school year, there were 3.5 million full- and part-time public school teachers, including 1.8 million elementary school teachers and 1.8 million secondary school teachers [National Center for Education Statistics]

• There were about 270,000 fewer school staffers in July 2022 — including teachers, bus drivers, counselors, and librarians — than there were in January 2020 [U.S. Bureau of Labor Statistics]

• In 1979, teachers earned $1,052 per week, when adjusted for inflation [Economic Policy Institute]

• For 2020-2021, the average salary for public school teachers was $65,293, an increase of 1.8% over 2019-2020 [National Education Association]

• More than 44% of new teachers leave the profession within five years [Education Week]