Excellence and teacher pay: A New York charter school is not the only school paying teachers $100,000+! | Economics in Plain English

Sep 04 2010

Excellence and teacher pay: A New York charter school is not the only school paying teachers $100,000+!

Published by at 2:28 am under Education,Standard of Living,Teaching,Wages

Next Test – Value of $125,000-a-Year Teachers – NYTimes.com

A New York City charter school is experimenting with paying teachers nearly triple the national average teacher salary of public schools. The article below describes the result:

So what kind of teachers could a school get if it paid them $125,000 a year?

An accomplished violist who infuses her music lessons with the neuroscience of why one needs to practice, and creatively worded instructions like, “Pass the melody gently, as if it were a bowl of Jell-O!”

A self-described “explorer” from Arizona who spent three decades honing her craft at public, private, urban and rural schools.

Two with Ivy League degrees. And Joe Carbone, a phys ed teacher, who has the most unusual résumé of the bunch, having worked as Kobe Bryant’s personal trainer.

“Developed Kobe from 185 lbs. to 225 lbs. of pure muscle over eight years,” it reads.

They are members of an eight-teacher dream team, lured to an innovative charter school that will open in Washington Heights in September with salaries that would make most teachers drop their chalk and swoon; $125,000 is nearly twice as much as the average New York City public school teacher earns, and about two and a half times as much as the national average for teacher salaries. They also will be eligible for bonuses, based on schoolwide performance, of up to $25,000 in the second year…

The school received 600 applications. Mr. Vanderhoek interviewed 100 in person.

It’s amazing to me that a school in NYC that pays $125,000 a year and expects teachers to work year round gets so much attention, while some international schools have been paying teachers nearly as much for decades to work a regular school year. Yet so many American teachers seem unaware of the career opportunities available at international schools! A salary of $100,000 is not unheard of in international schools, and often times that income is tax free (at least the majority of it, since it is considered “foreign earned income” by the IRS).

In economics we study how scarce resources are allocated by supply and demand in the market place. Demand for highly skilled, qualified teachers is huge in all kinds of schools, public, private, charter and international schools alike. But only once an American school like this New York charter school comes along and offers to pay teachers a salary more than double the national average (and then receives nearly a hundred applications for every opening) do we begin to read about teacher pay in the news and reflect on the roll it plays in attracting top notch, expert educators. From one economics teacher’s perspective, it should come as no surprise at all that when a school offers a higher salary it will attract better teachers and thereby improve the quality of the education it provides.

International schools have known this simple fact for years. Unlike the American public school system, which from state to state essentially resembles the “monopsonistic employer” model (meaning each state has a “monopoly” of sorts on the hiring of teachers), the market for international teachers is highly competitive. In most big cities, even, there are several international schools competing to attract the best educators from the limited supply available. And in a particular country, for instance China, there are dozens of private international schools, all seeking to offer the best quality education in order to increase demand for enrollment, competing against one another to hire the best teachers they can.

The result of the competition between international schools for student enrollment is increased competition for skilled, qualified teachers. Add to this the fact that year after year there end up being shortages of qualified international teachers and you end up with the perfect recipe for teachers like myself and all the colleagues I’ve worked with over the years, upward pressure on the salaries and benefits packages offered by international schools.

The lesson here is clear from my perspective. Increased competition among schools for student enrollment will lead to increased competition among schools for better teachers, and therefore better teacher pay. The NYC charter school set out with a clear vision in mind for achieving students success. Attract the best teachers and we’ll provide the best education. And in order to achieve this vision, it followed the most basic of economic principles, articulated so eloquently by Adam Smith himself:

Whoever offers to another a bargain of any kind, proposes to do this: Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.

The bargain being offered to teachers in this case is an attractive salary, and all the schools in question are asking for in return is excellent teaching. “In this manner” schools obtain from teachers a commitment to excellence and teachers obtain from schools a salary that rewards them for this commitment. Society’s need for excellent education and teachers’ need for a living wage are met. But public schools go against this basic tenet of  market doctrine when the monoposony that is the state public school system pays teachers not based on their achievement, training, excellence or results but on their years of service. The lack of competition for student enrollment leads to a failure of the incentive system for attracting good teaches, and what schools find themselves with is a burnt out, underpaid, disgruntled work force and test scores and student achievement that you’d expect to follow.

I hope this charter school succeeds. I hope the students’ scores surpass those of their public school peers. I hope this not  because I like to see the old model of education fail, but because I would love to see a new model, based on the simple market principle that individuals respond to monetary incentives, succeed. I can say from experience that the competition among international schools for the limited supply of skilled teachers benefits all the stakeholders in question: teachers are paid better, the schools that pay the most attract the best teachers and thereby attract the greatest demand for enrollment. The market has worked! If the New York charter school succeeds, how can this be ignored. How can America’s other public schools not admit that to improve education, competition for students and teachers must be embraced.


About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

13 responses so far

13 Responses to “Excellence and teacher pay: A New York charter school is not the only school paying teachers $100,000+!”

  1. Alain Meyeron 05 Sep 2010 at 8:12 pm

    As much as I support government-funded education, it's a very important sector to have some form of privatization (as we can see in teacher salaries). The ability to increase teachers salaries may be possible for charter and private schools, but the level of education and salaries in public schools will most likely stay the same for a long time to come. For the most part, competition can improve any industry, and I think that education is far too regulated. With more private schools and more competition, curriculum would actually be given space to evolve and improve over time. The capital that teachers have access to would also increase in quality and the concept of one-to-one-computing would be ubiquitous. Software in the educational market is currently stagnant because of the lack of software adoption rates among private schools. Private schools are more willing to try out new types of software and would also increase the demand for edusoftware.

    If we could somehow allow advertising in schools and allow people to go to private schools for free being subsidized by corporations, I'm confident that test scores would rise.

  2. Ignacioon 08 Sep 2010 at 12:51 am

    Im very convinced this new school in New York will have much higher scores to those public ones around it. In schools where the salary is lower teachers are usually not as skilled and usually do not put as much effort into finding new ways to increase test scores, however they don´t have the tools private and international schools do as Alain mentioned in the post above. Meanwhile in School where the salaries are 100.000 or more like in this new school in the New York City area where teachers are more qualified teachers will put more effort into increasing test score for the simple reason that they are getting paid a great deal and because they know that if they don´t succeed 100 teachers are willing to try.

  3. […] What if qualified teachers could make $100,000 dollars a year to work with the most challenged youth in order to show with the right opportunity every student has the chance to be successful? It happens: View Article […]

  4. Alexandre Kleison 10 Sep 2010 at 5:40 am

    I think that there is no reason why schools could not function as companies would in the private sector. As already mentioned in this blog post, this is the recipe all international schools abroad have used and it is the primary reason why those obtain excellent results in general. I think that the decision made by this New York Charter school is the best since high exam results can mainly be related to an excellent teaching quality; and in order for a school to have excellent teachers is to offer high wages, which will attract many teachers to work there. This will give the schools the opportunity of selecting the best teachers available on the market. Teachers, who will then be paid high salaries, will want to obtain the highest scores possible by putting as much effort as possible in order for them to keep their job.

    And if that has been working for years in international schools, why could it not work in the U.S.?Well, this will work and probably increase the reputation of the school as exam results will increase.

  5. MN Ed.on 11 Sep 2010 at 1:25 am

    As an economics teacher in a public school (MN) i can tell you VERY FEW of my collegues complain about salaries once they are 10-15 years in. Rather, the loss of autonomy to teach to individual students strengths has been seriously eroded by federally mandated (and unfunded) testing. These tests are extyremely expensive to implement and actually end up costing high acheiving students in the long run. If YOUR job security was based on bringing up the lowest 10% of your clients with NO reguard for those already marginally succeeeding where would YOU put all of you time and resources? The answer is predictable in that while the lowest performing students will make marginal gains compared with astonomical resources being poured into them, the middle and especially highest acheiving kids are largely "left alone" as they are already successful enough in the eyes of the government test makers. What then are the long run costs to this type of policy on the future workers in this country?

  6. Jason Welkeron 12 Sep 2010 at 6:02 am

    MN Ed,

    That's a great perspective, thanks. I hadn't thought of the effect standardized testing must have on your ability to differentiate among you students in the classroom. It sounds like the "no child left behind" model does more harm to the highest achievers than it benefits the lowest achievers. That must be frustrating to face day in and day out… thanks for sharing.

  7. Lyel Resneron 15 Nov 2010 at 3:10 am

    @Alain:

    The Equity Project Charter school to which Mr. Welker is referring, in fact receives no outside funding. Arguably their greatest innovation is not the insight that six-figure salaries will attract top teachers, but in restructuring their public funding (which is exactly the same as a traditional public school of the same size) in order to make this pay-scale achievable.

    You can read more about their model here:

    http://www.tepcharter.org/philosophy.php

    Regards,

    LR

  8. Steeveon 13 Jul 2011 at 5:09 pm

    All. I think that everyone is overlooking the relation between students' socio-economic status and test scores. While it might be nice to assume that schools that pay the teachers more get better teachers, I imagine the truth is that schools that pay teachers more get students who are better supported at home. I imagine higher test scores are more a reflection of the student body than the teaching faculty. I am also sure that test scores are not a good way of evaluating teacher success and this is always the problem with performance based funding for teachers – it is extremely difficult to empirically categorize achievement in teaching.

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    Excellence and teacher pay: A New York charter school is not the only school paying teachers $100,000+! | Economics in Plain English

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    Excellence and teacher pay: A New York charter school is not the only school paying teachers $100,000+! | Economics in Plain English