NJ Teacher and Administrator Wages

I got curious this morning, and ended up spending more time than I wanted to on this quick and dirty analysis. You see… the whole premise of this Cartel movie is that the teacher unions in NJ are a mob cartel that has bullied the state into lining their (union members) pockets with high salaries, guaranteed annual increases, and all for no actual return in the quality of schooling. My slides in a previous post actually speak to the relative quality of NJ schooling in relation to NJ state and local revenues for schooling.

Anyway, this morning I ran a quick check on how elementary and secondary teacher and administrator wages stack up compared to other workers in NJ from 2000 to 2007. You’d think from all the rhetoric that they’ve run away from the pack. As in a much earlier post, I’ve taken data from the U.S. Census Integrated Public Use Micro Data System (Census 2000) and from the subsequent American Community Surveys. I’ve included only individuals with a BA or MA degree and between the ages of 23 and 65. I’ve computed relative “income from wages” from a regression model which controls for the Hours Worked per Week, Weeks Worked per Year, Age of Individual, whether they hold an MA or BA, race and gender (essentially comparing male wages to male wages, female to female, black to black, white to white… which, given gender wage gaps in many fields and the high percentage teachers who are female, potentially leads to overstating teacher relative wages).  Here’s what I got:


Yep… teachers have fallen sligthly behind. Administrator estimates have jumped around average. The green line  is the average predicted income from wages for a worker of similar attributes (hours per week, weeks per year, age, sex, race, degree level) as the teacher or administrator. Personally, I’d expect a 40 year old school administrator to make more than “average” for any 40 year old worker with a masters degree working similar weeks and hours per year. But even that has not systematically been the case in NJ over the past several years. Nor have administrator wages grown systematically relative to other comparable workers. (note that by excluding professional degrees and doctorates, I’ve excluded doctors and lawyers, but have not excluded other managers, individuals with MBAs, or architects and engineers).


  1. Sir,

    Your relative income analysis seems thorough in the factors you used to compile the above chart, but I believe there is a glaring deficiency. According to your description of the study, I do not see any factor for weighting the present value of pension and retirement benefits, as compared to those for the private sector. I believe you would agree that pension and retirement benefits are highly significant factors in one’s economic decision regarding job choices. Perhaps you would address this topic.

    Also, would your study have greater objectivity if you compared public educators to private sector educators? I believe you would agree that certain industries in NJ, particularly real estate and financial markets related occupations, had tremendous gains between 2000 and 2007. Do you feel it is valid to include those cyclical type professions with a non-cyclical profession such as teaching? It seems to me to be a basic lack of correlation in the study. Perhaps you could help me understand the validity of your data sample here.

    1. Your comments are right on target and indicative of the shortcomings of the available data – at least regarding my inability to capture the value of benefits by comparison. Bob Costrell and Mike Podgursky have done some nice work on this topic, showing that indeed, teachers have relatively healthy benefit packages: http://www.uaedreform.org/Research/Costrell-Peaks-Cliffs-Valleys.pdf

      On the other point – the relevant comparison group, there exists a substantial body of literature on competitive wage analysis that evaluates teacher salaries relative to all other private sector alternatives at comparable age and degree level. see: https://bush.tamu.edu/research/workingpapers/ltaylor/Comparing_Teacher_Salaries.pdf

      What I’ve put on this post is a blog post and not a real, thorough study by any stretch. It is a quick summary of wage data from the http://www.ipums.org, based on Census 2000 and American Community Survey Data, based on occupation and industry of workers, income from wages, age and degree level.

      In fact, it is those “tremendous gains” in industries such as real estate, where teachers could quite easily opt out of teaching to get a real estate license, that are particularly relevant here. It would indeed be fun to map out the next few years with the same data. Thanks for the insights.

Comments are closed.