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Home Publications Blogs Beat the Press The Pay of Chicago School Teachers and Selected Others

The Pay of Chicago School Teachers and Selected Others

Wednesday, 12 September 2012 03:53

Since the Chicago school teachers went out on strike Monday, many political figures have tried to convince the public that their $70,000 average annual pay is excessive. This is peculiar, since many of the same people had been arguing that the families earning over $250,000, who would be subject to higher tax rates under President Obama's tax proposal, are actually part of the struggling middle class. They now want to convince us that a household with two Chicago public school teachers, who together earn less than 60 percent of President Obama's cutoff, have more money than they should.

Anyhow, if we want to assess whether someone is getting too much money, we always have to ask the follow-up question, compared to what? Here are a few comparisons that I have found useful.


Source: Author's calculations, see text.

The first comparison number is the annualized pay that Chicago Mayor Rahm Emanuel got for a 14-month stint as a director at Freddie Mac. President Clinton appointed him as a director shortly after he left the administration. It's not clear exactly what Mr. Emanuel did as a director, he was not appointed to any board committees. While Emanuel's stint ended just as the housing bubble was building up steam, Freddie Mac was involved in an accounting scandal during this period for which it was forced to pay several million dollars in fines.

The second comparison is the compensation that Emanuel received for his day job after leaving the White House, working for Wasserstein Perella, an investment bank. According to Wikipedia, he earned $16.5 million for two and a half years of work.

The third comparison is the compensation that Erskine Bowles received as a director of Morgan Stanley, the huge Wall Street investment bank in 2008. Erskine Bowles has been mentioned in the news frequently as the co-chair of President Obama's deficit commission. The plan that he co-authored with former Senator Alan Simpson, the other co-chair, is often held up as providing a basis for a "grand bargain" on the budget.

The year 2008 is noteworthy because this was the year that the bank was driven to the edge of bankruptcy. It was saved from imminent bankruptcy by a bailout from the Federal Reserve Board, which allowed it to change its status to become a bank holding company on an emergency basis. This gave it the protection of the Federal Reserve Board and the FDIC. Morgan Stanley also received tens of billions of dollars in below market loans and guarantees from the government. (Bowles continues to serve as a director of Morgan Stanley as well as several other companies. Here is a fuller discussion of his record as a director.)

These pay packages might be useful information for those trying to decide whether $70,000 a year is too much to pay a teacher working in inner city schools in Chicago. On the same topic, Catherine Rampell provides a useful comparison of the pay of teachers in the United States relative to the pay of teachers in other countries, most of which have better student performance on standardized exams. 

Comments (37)Add Comment
..., Low-rated comment [Show]
Judging incompetence
written by David, September 12, 2012 8:11
The real problem is incompetent leaders and administrators (and parents) using assessment results in incompetent ways. For example, a 5th grade teacher can get a student reading at the 2nd grade level at the beginning of the year, teach them to improve by two grade levels over the year (instead of just one level), yet the teacher, who gets raves from her students, is branded a failure since she did not get the student reading at the 5th grade level in 9 months. She often had to go hours without potty breaks while waiting for a classroom monitor. (Yes, this is a true story of a teacher I know, who has a Master's degree; she no longer teaches, has a higher salary, and is able to take potty breaks at her new job whenever she needs to).
written by SS, September 12, 2012 8:14

"According to the US Census Bureau persons with doctorates in the United States had an average income of roughly $81,400. The average for an advanced degree was $72,824 with men averaging $90,761 and women averaging $50,756 annually. Year-round full-time workers with a professional degree had an average income of $109,600 while those with a Master's degree had an average income of $62,300. Overall, "…[a]verage earnings ranged from $18,900 for high school dropouts to $25,900 for high school graduates, $45,400 for college graduates and $99,300 for workers with professional degrees (M.D., D.P.T., D.P.M., D.O., J.D., Pharm.D., D.D.S., or D.V.M.).[22]"
from Wikipedia
written by SS, September 12, 2012 8:19
The issue of teacher evaluation is not a simple one. Civil service systems have since Andrew Jackson had some degree of review and protection in cases of dismissal to prevent the system's succumbing to political patronage. Basing teacher performance dismissals predominately on student test results when Charter schools attract some of the better students and certain schools are disfavored by poverty in their demographic zone can also be very unfair and counter productive. Other factors need to be taken into account.
Weeding out
written by jayackroyd, September 12, 2012 9:17

If getting rid of bad teachers were his goal, he'd be raising pay, and using higher pay as a bargaining chip for a process to eliminate bad teachers.
written by skeptonomist, September 12, 2012 9:22
"Reformers" claim they want to improve teacher's performance with incentive pay, but this always works out to a small bonus for the rare gifted teachers (or those who luck out on poorly designed evaluations) but a decrease in average pay. The standard economic principle here is simple; if average pay is decreased, the average quality will decrease and so will average performance. This is never in dispute for other professions, but somehow economic principles are inverted for teachers.
written by celo, September 12, 2012 9:32

Rahm has been failing in a big way as this post shows, but he wants to weed out under-performers? No credibility and no good faith.
I'm sympathetic to teachers, but Chicago teachers' pay is ridiculous, Low-rated comment [Show]
Comparing salaries to three millionaires is silly
written by Bill Heffner, September 12, 2012 9:41
The comparison provided in the reference, wherin we learn the teachers earn 62% to 80% of the amount earned by other college educated people, is far more useful.

And Baker, like the media, is stressing that the teachers union turned down the pay raise, which they did not. They found the pay raise acceptable. It was other conditions of evaluation and job security over which they struck. So far I can find no publication which will say what the specifics of those terms are, other than that they involve student test in some unspecified manner.

The role of the media is not to inform, but rather to inflame.
If we want to spend a fortune on overpriced health care and finance, we have to be careful about teachers' salaries, don't we?
written by Rachel, September 12, 2012 9:48

That Freddie Mac salary--that's very, very ugly.

To be fair, the OECD data suggests that we may have something of a problem. Korea spends almost as much on education as we do as a percent of GDP, but tries to make up for it with larger class sizes. Iceland manages to spend more than we do, but doesn't spend too much on teachers. They have a geographical problem, perhaps.

Now in California we spend quite a lot on education. Up in Chico, teachers make $95,000. And class sizes are reasonably small, 22 per. But we are said to do a lot of non-class spending, which runs up the costs. Is this a problem that Chicago has?

Of course it is only because we spend as much as we do on health care ($186,000 per GP as of 2011, vs 95 000 in France), and on those preposterous characters in finance, that the cost of modestly small class sizes and modestly good teachers salaries and health benefits, become a matter of real concern.
written by AlanInAZ, September 12, 2012 9:55
I think it is a symptom of the problems with our society that many resent teacher compensation that is really quite modest given the impact they have on the productivity of the economy. When I retired 12 years ago one of my colleagues took early retirement to teach at the local high school. He left a salary 12 years ago that was larger than the average $70,000 stated in the post. The frustrations and demands were too great and he left teaching after two years. I think it is a difficult job that is under compensated.
Don't believe everything you read about Unions
written by McDruid, September 12, 2012 11:08
Another question is if that $70 is really true. In fact it does not seem to match up with other sources:

The BLS, where a serious reporter would go to check the numbers, says that Chicago teachers average $45/hour. That works out to about
$58,000 a year.

If you don't like that, the actual teacher contract is online also: TOP PAY,
with a Ph.D. is about $77,000. Midscale with a Master's degree and 30 semester hours experience is about $60,000. (It appears the average teacher has a Masters.)

GlassDoor.com pegs the average at $46,000.

Indeed.com says $59,000.
written by liberal, September 12, 2012 11:11
Charles wrote,
Granted, Chicago is pricier than Tulsa. But, wow.

That's silly. Cost of living isn't the only factor to consider. Given that teaching in public schools in large cities is one hell of a lot less pleasant than most other places, the pay should be quite a bit higher even after adjusting for cost of living.
Annualized salary > $70K, Low-rated comment [Show]
written by liberal, September 12, 2012 11:15
Charles wrote,
Two teachers could easily earn a lot more than that. How does the median family feel about a teachers' family earning almost three times as much as they do? How does a poor family feel about the teachers' family making seven times what they do?

Frankly, that's just idiotic. If you think that teachers are overpaid based on some kind of labor market determination, fine. But the idea that we should be cautious of paying government employees more than "the people they work for" is pernicious and will only result in crap government and a crap country.
Chicago vs NY/LA
written by freebird, September 12, 2012 11:34
I think this article is a more meaningful comparison of teacher compensation--
This seems to presume that all teachers have the same job requirements, which I doubt is true. For example adjustments should probably be made for class size, duty cycle (prep time), duration of school year, etc. The part of this article I find most interesting is the bar chart-- if those really are the maximum and minimum pay levels, then I sure am glad that I work in private industry where the spread is much larger.
Response to Joe T
written by mart, September 12, 2012 12:42
If somebody resents working more hours for less pay than a Chicago school teacher, than that person should get a masters in education and apply for a job with Chicago Public Schools. I wish them luck.
What happened to annualized teacher salaries?
written by daxxenos, September 12, 2012 12:44
Apparently, under Mr. Emanuel, the Chicago school year is 180 days, averaging seven hours per day for secondary schools and five hours 45 minutes for elementary schools. As some of the comments have already noted, any comparison of teacher salaries to salaries of non-teachers, whether those happen to be the Mayor or other college-educated workers, should also be annualized if the comparison is to be, as they say, meaningful to readers.
Cosmo10, Low-rated comment [Show]
written by Jennifer, September 12, 2012 1:11
The strike is NOT about money, it is about health care benefits and job security. You only get that money if you are actually working. As partially explained in the link below--by an excellent local writer who has written much on Chicago politics-there are long-standing issues not all of which are the mayors fault--although certainly he could have prevented this if he wanted to.


Chi vs NYC
written by David, September 12, 2012 2:33
Chicago vs NY/LA
written by freebird, September 12, 2012 11:34 ...

That article also neglects to find out that NYC pays for healthcare insurance for employee and dependents. Chicago system does not (not sure how they do it, but it's not paid in full). Just that difference alone makes up for the pay differential. I didn't have time to check out the teacher pension plans, but I bet NYC is slightly more there, too.

That article could also have sorted the bars in order of cost-of-living, or do a cross-plot of those. In short, the dollars aren't equal so it's all pretty meaningless.
written by David, September 12, 2012 2:40
written by Cosmo10, September 12, 2012 1:07
... This strike is right down outrageous.

What's outrageous is that we vastly overpay medical doctors and CEOs compared to other developed countries, but significantly underpay and overwork our teachers. Your outrage is misplaced, Cosmo10.
written by Sonja, September 12, 2012 2:46
Precisely how did this article arrive at the figure of $70,000 per year as the "average pay" of a Chicago public school teacher? Precisely what is included as "pay" in this average? And, more important, does the pay scale follow a normal curve, or is the median salary much lower (as we often see these days . . . and by now, we should all know what that means)?

This reminds me so much of the days when Chicago steelworkers were said to make "exhorbitant" wages, and that the unions ultimately "forced" the closure of the major steel plants with their wage demands, when I personally knew many steelworkers who were considered highly skilled and were paid at the top of their grade, and NONE of them came close to the "exhorbitant" average. At the time, it turned out that they were including the full cost of health benefits in this "average wage." Also, of course, the typical office worker in Chicago had no idea that someone died in a steel mill every year, and that many were maimed . . . but I digress.

These are all hard jobs. They are given absolutely no respect. This is not going to work out well in the end. This recession is sowing the seeds of a new rise in extreme inequality in America. If you think things are bad now, just wait.
Those who do not know, should think before speaking
written by David, September 12, 2012 2:49
What happened to annualized teacher salaries?
written by daxxenos, September 12, 2012 12:44
Apparently, under Mr. Emanuel, the Chicago school year is 180 days, averaging seven hours per day for secondary schools and five hours 45 minutes for elementary schools. As some of the comments have already noted, any comparison of teacher salaries to salaries of non-teachers, whether those happen to be the Mayor or other college-educated workers, should also be annualized if the comparison is to be, as they say, meaningful to readers.

daxxenos' assumption, of course, is that teachers only work when they are at school, and only on those days that school is open. I strongly suggest that daxxenos take a job teaching at an inner city school, and figure out how much time annualized a teacher typically spends: grading 2-4 hours per night for 180 days (lessee, that adds on another 60-70 work days right there), parent-teacher conferences in the evening (since parents are working too), professional development days sponsored by the district (if you want those performance raises), continuing education (take a summer class every year or so, to keep current with your subject and its teaching methods, but also especially since a Master's gets you a raise; oh, and remember that tuition and books will come out of your own pocket), providing supervision for after-school events (evenings AND weekends).

Well, you get the idea. The point is that daxxenos wants to compare an half an orange to an orange and claim that they are both oranges. Nonsense, poppycock, and bloody well ignorant. "180 days." Bleah.
written by liberal, September 12, 2012 3:32
David wrote,
What's outrageous is that we vastly overpay medical doctors and CEOs compared to other developed countries...

Agreed. Not to mention that the banksters are very well paid, despite (a) almost destroying the world economy in 2008, (b) doing very little other than parasitically accruing economic rents, and (c) being essentially government employees, since if it were not for State action, all the major financial firms would have been buried and the banksters out of a job.

Anyone who whines about teacher salaries and hasn't yet strung up a bankster from a lamppost should go pound sand.
..., Low-rated comment [Show]
Really?, Low-rated comment [Show]
Congratulations to freebird, Low-rated comment [Show]
Look at what it costs to live in Chicago
written by ljm, September 12, 2012 5:04
I worked in an urban school district, retiring before anybody in a classroom made $70,000 a year, but I'd be willing to bet it's been recently that teachers in Chicago got paid that well. They no doubt started out making a salary that made if very difficult to make ends meet, like I did. Teaching in an urban school is hard work. Sometimes, it's dangerous work. Teachers in urban schools spend a lot of their own money for the supplies they need for the kids just to get through the day. I know what it's like to have to keep food on hand for kids who are hungry and not ready to learn. I bought scissors, paper, pencils, crayons and other things children need to be able to start a lesson, let alone complete one. I do, however wonder about all the urban school districts who are top heavy in administration with people making big salaries, but do nothing that really helps kids in a classroom. I'd like to know what the salary schedule is for Department of Defense Schools teachers, before condemning Chicago teachers.
Nobody in any other profession brings work home at night or on weekends...
written by daxxenos, September 12, 2012 8:03
...which is the conclusion one would have to draw if the point that teachers engage in some job-related activities at home somehow distinguished teaching from every other profession. Talk about assumptions.

Per the NEA, which probably does know, "teachers spend summers working second jobs, teaching summer school, and taking classes for certification renewal or to advance their careers." http://www.nea.org/home/12661.htm It requires no assumptions to recognize that the first two of the listed ways of spending summers are income-generating activities, the earnings from which are somehow ignored when non-annualized salary comparisons are made. Moreover, these are activities which are quite apparently readily accommodated by teachers' yearly schedules, however full those schedules might typically be.
The comparison I would like to see
written by John Q, September 13, 2012 1:28
Chicago teacher pay compared to other similar urban areas.
written by Beth in OR, September 13, 2012 2:34
I'm thinking that managing, say, 20+ voluntary attendees ages 6 to 11 for 5+ hours per day while teaching, evaluating, arranging remedial services, supervising, and counseling/addressing emotions is laudable enough when none of the attendees is malnourished, disabled, nor homeless. Planning often takes place on the teacher's personal time.

Now managing, teaching, evaluating, arranging remedial services, supervising, and counseling/addressing emotions, reading assignments, grading papers for 140+ attendees (only some of whom are voluntary, none of whom are unscathed by hormones) ages 12-17 is a whole 'nother ballgame. I figured 20+ students per class and 7 separate classes per day. Planning is still often on the teacher's own time.

You can walk in and actually see these people at work. And those are just the primary and secondary teachers. Why are we squabbling about anything other than the best way to facilitate their success? They're OUR kids and future neighbors, for crying out loud!
written by liberal, September 13, 2012 7:47
Charles wrote,
Pay is not based on how pleasant work is. Maybe it should be, but that's not how it is.

Apparently you can't read. I wasn't comparing the working conditions of inner city school teachers to garbagemen, etc. Rather, I was comparing them to the conditions experienced by other teachers.

It's clear that the labor market is going to dictate that a teacher is going to demand higher pay for working somewhere unpleasant, compared to somewhere less so.

If you can't understand such a simple, basic fact about labor economics, I don't understand why you're posting on an economics blog.
written by liberal, September 13, 2012 7:51
Charles wrote,
If they come to believe that teachers live lives of luxury, that support will evaporate. In fact, in Wisconsin, that seems to be exactly what happened. One of the most shocking statistics is how many non-union members living in union households voted to end collective bargaining.

Yes, it happened because rather powerful, wealthy interests pushed for it to happen.

Again, if you want to start a discussion by citing labor market figures, more power to you. If you want to make apologies for people stoking resentment against government employees based on nothing other than "they work for us, yet they get paid by us!", then your actions are pernicious.
written by liberal, September 13, 2012 8:00
Charles blithered,
So, we should not resent CEO pay because it is vastly greater than that of the workers?


CEO pay is to be resented not primarily because it's high, but because most of the pay received by most CEOs is economic rent (aka legalized theft). In other words, they're not getting paid because they make such useful contributions to the economy, or the firms they work for.

It's plausible to argue that teachers collect some economic rent and are overpaid, but the multiple is probably pretty small. For CEOs, it's enormous.
written by liberal, September 13, 2012 8:06
"they work for us, yet they get paid by us!", above should be "they work for us, yet they get paid more than us!",
We should cut the pay of administrators.
written by Robert Austin, September 21, 2012 5:49
Many of the problems in education today are caused by overpaid administrators who bully teachers and try their best to break our unions. They don't teach anyone, and they, too often, only interfere with education.

This is a petition to Congress asking them to cut administrators' pay all across America. This will save taxpayers lots of money, and improve education at the same time. The petition explains how, in detail. If you read it and agree with it, please sign it, and then spread it to others. Thank you. http://www.change.org/petition...egislation

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.