A Lesson on Worth

I recently ran across one of those messages about how our nation needs to get its priorities in order, because we pay professional athletes so much more than we do teachers.

On the surface, it seems a difficult point to argue, because obviously teaching is important.

This is where an understanding of marginal utility comes into play.

The Difference is the Difference

We recently put our fantasy baseball league together, and guess who one of the top draft priorities was? A catcher for the Minnesota Twins named Joe Mauer. Statistically he’s as good as anyone in the game, but he’s even more valuable as a catcher because of the scarcity at his position.

The numbers will tell you that Albert Pujols is the best pick in the game, but I might bypass him for Mauer because the next guy down in First Base eligibility is not as far a drop as the next catcher beneath Mauer. So it’s not just a game of raw numbers, it’s how much of a marginal difference you get from the swap.

The difference in value (either in the fantasy game or in the real world) is a function of the difference you bring. Major League players are where they are because there is an appreciable difference between hitting a curve ball one out of every four tries instead of one out of every five. Do it one out of every three and you’ll go to All-Star games and the Hall of Fame.

So, why are teachers paid so much less than professional athletes?

Wait, are they?

Statistics Are Mean

We assume we know what teachers make, because on a year to year basis the answer is “not enough.” Teachers are always asking for raises, and in that regard are no different than the rest of us. However, many of the teachers I interviewed during my time in television news were shocked to find out that a starting TV reporter made far less than a starting teacher – and depending upon the station had to drive their own vehicle to cover the news.

We also assume we know what professional athletes make, because we see the vapor trail of zeros in the headlines of the sports page. And if there are enough zeros, it goes in the business pages as well. The USA Today has a salary calculator for the major sports leagues. Here are the stats for median salary for Major League Baseball teams for 2009.

New York Yankees $ 5,200,000
New York Mets $ 2,612,500
Philadelphia Phillies $ 2,500,000
Detroit Tigers $ 2,237,500
Chicago Cubs $ 2,200,000
Cleveland Indians $ 1,950,000
Los Angeles Angels $ 1,800,000
Boston Red Sox $ 1,625,000
Kansas City Royals $ 1,600,000
Houston Astros $ 1,550,000
Arizona Diamondbacks $ 1,500,000
Baltimore Orioles $ 1,500,000
Milwaukee Brewers $ 1,347,500
Tampa Bay Rays $ 1,290,000
Los Angeles Dodgers $ 1,250,000
Atlanta Braves $ 1,237,500
Chicago White Sox $ 1,112,500
Pittsburgh Pirates $ 1,062,500
Cincinnati Reds $ 970,000
St. Louis Cardinals $ 950,000
Toronto Blue Jays $ 932,500
Colorado Rockies $ 800,000
San Francisco Giants $ 661,250
Texas Rangers $ 555,000
Minnesota Twins $ 525,000
Washington Nationals $ 500,000
Seattle Mariners $ 480,000
Florida Marlins $ 470,000
San Diego Padres $ 466,200
Oakland Athletics $ 410,000

It pays to be a Yankee.

Remember, this isn’t the average (or mean), but the median.

Average indicates you dumped the whole payroll together and divided by the number of people who got the paychecks. Median means you picked the person right in the middle, where half make more and half make less. If you put Bill Gates in a room with 100 teachers, the average salary of the room would be a lot higher, but it wouldn’t affect the median all that much.

Still, the guy in the middle of the pack for the lowly Oakland Athletics makes decent money.

Play around with the calculator. The median salaries for NFL teams ranged from $1.3-million for the New York Giants down to $541K for the St. Louis Rams. In the NBA, the “middle-man” in the New York Knicks pecking order gets over $6-million a year, while the median for the Miami Heat is a cool $1.1-million.

But is this the applicable comparison for educators?

Perception is not reality

Again, you look at the headlines and the dollar amounts and compare that to what you see in the classrooms. Look at the parking lot of your nearest public school, and you’ll not see limousines (but you’ll see better cars than you might think.)

What you don’t see in the comparisons is the salaries of all the professional athletes who never made the major leagues. You don’t see the stats on their average career, which ranges anywhere from 2-5 years for the top sports.

You occasionally run across the profile of the minor-league baseball player who is trucking it in Single-A ball for near-minimum wage. Or a reference to Super Bowl MVP Kurt Warner, who worked stocking shelves at a grocery store for $5.50/hour to supplement his income while in minor-league football.

I won’t do the math. Researchers at Penn State already did. In 2004, the median salary for a professional athlete was $48,310 per year.

That same study, when you looked up public education, median earnings for kindergarten and elementary school teachers was between $41,400 to $45,920, based on location. Same range for teachers at junior high and high schools.

Shocking, but not in the way you thought.

Marginal Truths

There is a distinct difference between the guy who hits .280 and the guy who hits .240. It is a statistical measurement that can be correlated to a team’s chance of success.

Many of the factors that make for successful teachers are harder to quantify, so it would seem they are “punished” for dealing with so many intangibles. But there are a couple of other factors to consider.

How much of that lack of measurement is the fault of the teachers’ unions?

The unions typically fight against any standards-based testing, and I can understand why. When tests are administered across a broad area, some will perform better because of external factors. Kids with rich parents who provide additional tutoring and resources, and kids with two parents at home who care about education tend to do very well in school. Children in districts that are poorer and have more fractured home lives are not going to perform as well.

But who says the measurements have to be about raw performance? Why not measure students at the beginning of a year, and again at the end? And we can see how much improvement particular teachers provide, with apples to apples comparisons.

The unions likely won’t stand for that, either.

To Market

As it is, there is a very limited amount of performance-based incentive for teaching achievement. In some states, you’ll get a certain bump for having a Masters degree, or some type of certification in your subject. But most of the compensation is determined by a ladder system based on seniority.

The unions don’t want that level of disparity, though, because it would lead to the kind of income disparity we see in professional sports. For every Alex Rodriguez or Joe Mauer, there are many has-beens and wanna-bes who toil away for “the love of the game,” or some other homily designed to get their minds off their tiny paychecks.

And when it comes down to it, if you are engaged in a vocation where there are so many intangibles – so many factors of value that defy measurement – is one teacher really that much more valuable than another? Well, yes. If given a choice I wouldn’t want to just be thrown in at random.

But I don’t have a choice. There’s no free market for schools (at least not in Alabama.) And the teachers that excel – that really bring additional value to their profession and to the students they reach – they don’t have a free market either. A free market for teachers would provide the basis and incentive for finding a way to measure those intangibles. It would also mean some would end up as rock-stars (as much as their marginal utility would allow,) and some would end up bagging groceries next to young Kurt Warner.

And deep down, I’m not so sure that’s what they want.

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  1. My perception of the salary difference between teachers and athletes has definitely changed in the last few years. This post is the evidence behind those feelings. Weird.
    I wonder how many other industries we could look at and see what’s what. Government and military pay grades, for instance. Garbage collectors?
    There is certainly a lot more to a salary listing that the actual dollar amount. Good post.

  2. I imagine that pro athlete median is *substantially* reduced by the WNBA, LPGA, PGA, tennis and hockey numbers.  Many of the players in those leagues actually have additional jobs to supplement their winnings/salaries, and they can do so relatively easily because often the seasons take up only part of the year.  But let’s allow the comparison anyway.  The real problem with the comparison is the motivational structure for job seekers.  While not every pro athlete will nab a multi-million dollar contract and accompanying endorsements, that upper echelon *is* always a possibility if the stars and training align.  There is no comparable motivation for teachers, and given the intangibles, there’s no compelling reason to establish one.  Where the ‘market’ can work for getting better teachers is by ‘competing’ with other professional arenas for the truly talented candidates, and you do that by raising the base salary, something unions are certainly always trying to do.   And I actually disagree with you that “the unions won’t likely stand for” more contextual testing methods.  I don’t think you have any reason to make that claim because that hasn’t really been on the table in our national education policy debate.  And there *is* a free market for schools in Alabama.  You allude to it right here:
    “Kids with rich parents who provide additional tutoring and resources, and kids with two parents at home who care about education tend to do very well in school. Children in districts that are poorer and have more fractured home lives are not going to perform as well.”
    In fact, the rich kids’ schools themselves tend to be newer, have better student-teacher-ratios, higher salaries, better facilities and benefits, and greater teacher satisfaction.  It’s actually a bit of a perverse motivation structure.  The more difficult the job, the worse the working conditions, the lower the salary.  The solution to getting better teachers isn’t to make them compete with one another, it’s to make our schools competitive with our accounting firms, our hospitals, and our pharmacies for smart, talented candidates.

    • @Andrew — No, there is no free market.

      The AEA sets the ranges and steps for compensation. While you can move to a system that pays better, you’re still locked into a salary based on your years of experience. That is not a free-market at all.

      Every time teacher testing has come up in this state, the AEA has gone after it with all guns.

      And to the last point, maybe we could recruit and get better teachers than we have now. There are studies showing that education majors come into college with some of the lower aptitude scores, maybe there is a relationship to the anticipated compensation. But then we run into marginal utility again: if we get the best people we can for teaching, are they maximizing their own value? And is that margin of difference that much higher than other teachers?

      If not, then no big raise.

  3. Jason Braddy says:

    I agree that a free market school system would most likely increase teacher pay, but in a privatized school system wouldn’t the poor kids get an education so inferior that a defacto class system would emerge?

    • @Jason — There are several layers to the free market. One would be a free market for teachers, one would be a free market for schools.

      Public schools as we think of them are immune to market pressures, because they cannot fail.

      There’s a debate in Alabama’s legislature about allowing charter schools in Alabama. The AEA here is running heavy ads like this one, citing statistics about charter schools that have failed. Nationally, 600 out of 5,000 charter schools have been shut down because of failure or mismanagement.

      That’s 12%. The 12% at the bottom of the pecking order in business routinely fail. An even higher percentage.

      What percentage of public schools are guilty of the same poor performance and mismanagement as the failing charter schools, and should be thrown into the mill for a re-do? That’s what’s called “Creative Destruction,” where those entities that fail put their resources back into the market, where they are available for a better use.

  4. Fascinating. I never realized the spectrum of salaries for professional athletes.
    Interesting comparison.

  5. I spent 3 years working at an education nonprofit that fought the teacher’s union constantly. This is an argument that came up frequently and that I think has merit.
    A similar argument about teacher’s salary—that compares them with other professions—looks at what they get paid per hour of work. In this framework, they make more than many other sectors because they “aren’t working” for 2+ months during the summer.
    However, both of these arguments fail to weigh the value of the work that teachers do. I am a die hard sports fan and as a child I dreamed of being in the NHL, but nothing an athlete does contributes anything tangible to society except entertainment.
    I have come across some amazing teachers in my life and some of the worst, who sail along with tenure. But those amazing teachers provide something that cannot be compared to pro athletes or most other professions.
    The unions stand in the way of performance-based incentives and current tenure rules make it nearly impossible to get rid of bad teachers. But standardized tests don’t come near measuring performance. As you say, there are so many intangibles.
    I agree wholeheartedly that more has to be done to reward the great teachers and to weed out the bad, but we are far, far away from figuring out a way to truly measure what makes a great teacher. NCLB does not do it. Standardized testing in general does not do it. The only thing I can see that begins to scratch the surface is achievement over time.
    Following a student through school (not just their test scores) will begin to unravel the weak links.
    This is rarely being done and I don’t know that a free market for schools provides the solution.

  6. This comparison is really a waste of time.  Pro athletes are not state funded.  If fans and sponsors paid hundreds of millions to be associated with teachers then I’m sure they’d have higher salaries, too.

  7. Ike, the market I meant was not one in which teachers sell their services, it’s the one where you have a choice where to send your kids (a choice you make when you decide where to buy or rent an apartment).  But as it happens, there are other factors that contribute to job satisfaction besides salary, and the best teachers gravitate to schools that can afford to attract them.  Routinely, for instance, the best teachers in the Philadelphia public schools move to suburban districts because the work is less difficult.  Right now, the unions help preserve a floor of compensation and respect, and they’re absolutely right to fight additional meddling unaccompanied by taxpayer willingness to improve overall working conditions *and* salary.
    This marginal utility issue is an odd one.  What sort of efforts does a pharmacist undertake to maximize his or her own value?   I think the trouble we have attracting good teachers is partly one of compensation, and partly, I think it’s a deep and abiding belief among many many critics that, really, they could do a much better job at teaching our children if whatever it is they’re doing instead wasn’t so important.  People don’t like to become teachers because it has been allowed to become a low status job.

  8. This was a great article to read. This has always been soemthing that I have thought about, but never had the time to do research on. Teachers though in different areas make a completely different amount of money. Would this play into what you are saying? In Illinois certain districts after working 10 years, a teacher can make well into a figure salary, which compared to Florida, a teacher can work their entire career and never step close to that salary. Your post just got my mind thinking. I like that! Thank-you.


  1. Jon Hussey says:

    @ikepigott Excellent commentary. I worked in ed reform & have some thoughts to share. Will comment. http://bit.ly/97SRCO (via @chipgriffin)

  2. dmcordell says:

    RT @amandacdykes: Interesting view of teacher pay from @ikepigott a non-educator. http://bit.ly/d1vt1L *send hate mail to him haha!

  3. Ike Pigott says:

    Good feedback so far on my take on the uselessness of comparing teacher pay to sports contracts | http://ike4.me/o56

  4. Ike Pigott says:

    The downside of paying "Major League" salaries for teachers is most would be paid like the minors | http://ike4.me/o56

  5. RT @ikepigott: The downside of paying "Major League" salaries for teachers is most would be paid like the minors | http://ike4.me/o56

  6. Tim Brauhn says:

    RT @ikepigott: The downside of paying "Major League" salaries for teachers is most would be paid like the minors | http://ike4.me/o56

  7. Teachers, athletes, salaries, and some common sense from @ikepigott http://ow.ly/1rrT6

  8. Chris Oliver says:

    A Lesson on Worth – http://ike4.me/o56 – Rational discussion of teacher vs pro athlete salaries.

  9. Ike Pigott says:

    @speedmaster – In some respects, your post was similar in tone to this: http://ike4.me/o56