When you first take an introductory microeconomics class, you learn all about the basic theory of supply and demand. You learn that in a competitive market, prices are determined by both how easy something is to supply and how valuable it is to the people consuming it.
You also learn that the same basic rules apply to the labor market. This is the justification that is given when the question is inevitably asked “why do people with more important jobs not make more money?”
The answer to this question has always been that prices in the labor market (wages) are not just a factor of the job itself, but of how easy it is to find employees in those jobs. That is why even though grocery store cashiers got labeled as “essential workers” during the pandemic, they still often are among the lowest paid employees in the state.
The same has also been said about teachers. Despite the fact that good teachers provide an extremely valuable service that everyone benefits from in the long run, the theory has been that it was easy to find teachers. Another reason that teachers are underpaid is that most of the benefits of teaching are externalities. The people who benefit from good teachers are children, while the people who pay for good teachers are taxpayers.
Positive externalities will always exist with teaching, but now it is no longer true that teachers are easy to find. We are currently experiencing a shortage of qualified teachers in most parts of the country. A policy brief from the Journal of Policy Analysis and Management by Jim Wyckoff from the University of Virginia looks at the teacher shortage in Virginia. He points to three major problems in the teaching workforce.
Teaching vacancies disproportionately affect a small number of schools. 20% of schools have 80% of the vacancies.
The schools that are most affected are the poorest schools, with the largest populations of BIPOC students.
Shortages are more pronounced among specialist teachers. For example, in the 2022 Virginia data, 3% of all teaching positions were vacant, while 6% of special education teaching positions were vacant.
Clearly, it is no longer true that it is easy to find teachers. The labor market for teachers is currently experiencing a major shortage. The good thing is that shortages in markets are fairly straightforward to solve. You just need to increase wages.
In his policy brief, Wyckoff also suggests that specialists who teach special education, math, and science should get an additional bonus of at least $5,000. Currently, most public school teachers get paid on a single schedule. That means that the only thing that determines wages is how long a teacher has been working. If we want to specifically address the shortage of specialist teachers, then we should be willing to pay them more. This bonus could also apply to teachers who choose to work in high poverty schools that are facing major shortages.
Education is one of the most important public goods. Paying teachers more is an investment in the future, not just a cost today. It may be expensive in the short run, but once these students grow up they are going to be better prepared to participate in society.
We know that education leads to so many positive outcomes for people who experience it. Paying teachers more is a rare policy that could potentially improve efficiency by correcting a market shortage, and equity by leveling the playing field when it comes to our education system.