Posts tagged Economics

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.

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.