Why aren’t teacher salaries rising? Rising benefits costs partly to blame

Despite large increases in K-12 school spending across the board since 2002, teacher salaries have actually fallen 6.1%, a new study finds.

Analysis by the Reason Foundation found teachers’ salaries decreased from $75,100 to $70,500 when adjusted for inflation, despite a nearly 36% hike in public school spending between 2002 and 2023. Academic performance also has lagged.

“With nationwide funding approaching $1 trillion and outcomes declining – nearly 40% of 4th graders aren’t reading at a basic level on the National Assessment of Educational Progress – it’s critical to examine how dollars are spent and why they aren’t producing better results,” Reason’s Jude Schwalbach and Aaron Garth Smith write.

The findings chronicle several trends, including the rise in “non-teaching staff, such as instructional aides, counselors, social workers, psychologists, and instructional coordinators,” which have grown by nearly 23%, despite only a 4% increase in the number of public school students.

Then there’s soaring benefits costs for teachers, which now exceed $8,000 in some states.

“Research indicates that these costs are largely driven by teacher pension debt,” Smith and Schwalbach write. “States have failed to set aside enough funding to cover their pension promises, and now the bills are coming due.”

That’s led to massive hikes in benefit spending – especially relative to the number of students – in states such as Hawaii (194%), Illinois (170%) and Pennsylvania (166%).

School districts are heading toward an “unsustainable” fiscal cliff, especially as enrollment declines are predicted to continue. Nationally, about 1.2 million students have left public schools since the COVID-19 pandemic. More are continuing to leave for homeschooling and as school choice expands in more states. A federal school choice program will start in 2027. 

Closing under-enrolled schools – something many districts stubbornly resist – and making other financially necessary decisions could help stem the tide, although the report isn’t optimistic. 

“There are no quick fixes, but one thing is certain – policymakers can’t expect a good return on investment from public schools unless structural problems are addressed,” the authors conclude. 

“Focusing on academics, paying down pension debt, and right-sizing schools are difficult but necessary reforms that can pay dividends in the long run.”