By Chad Aldeman
As teachers have staged walkouts and strikes in West Virginia, Oklahoma, Kentucky, and perhaps Arizona, most of the news coverage has focused on big-picture questions about state education budgets or average teacher salaries. But this misses a large trend going on in the background — teachers, like other workers in the American economy, are forgoing base salary increases in favor of in-kind benefits.
In 2016, I wrote a paper called “The Pension Pac-Man,” attempting to raise awareness of these issues. Using national data from the Bureau of Labor Statistics and other sources, I found that teacher salaries hadn’t increased, in inflation-adjusted terms, since the early 1990s. But while base teacher salaries have not risen, total teacher compensation has, driven by large increases in health care and retirement costs. That is, there’s a growing disconnect between what teachers are paid and what their employers pay for them.
This trend has accelerated rapidly over the past 10 years. Across the country, benefit costs are increasing much faster than salaries. At some level, this trend is playing out across the broader American economy as the baby boom generation begins to retire and as health care costs have soared. Over the past decade, civilian employers have paid average annual wage increases of 2.3 percent, their health care contributions have risen by 3.2 percent, and retirement costs have increased by 4.9 percent a year.