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Copyright 1998 by the Wyoming Department of Employment, Research & Planning


Selected Determinants of Elementary and Secondary Teachers' Wages

by: Gayle C. Edlin


Recent reports have indicated that Wyoming's teachers rank low in average salary comparisons with other states. The National Education Association (NEA) stated that the average salary for Wyoming's public school teachers was ranked among the ten lowest in the country1. But how do teachers fare when compared more specifically (e.g., elementary teachers versus secondary teachers), and what factors might play determining roles in salaries for these occupations? Understanding the labor market elements that influence salaries in specific occupations like these is important in learning how the labor market as a whole functions.

Occupational Employment Statistics (OES) wage data from 1996 appears to contradict the information presented by the NEA, showing that Wyoming's elementary and secondary teachers fare relatively well in comparison to other states, and particularly compared to some neighboring states. Furthermore, there were three factors found which are associated with the wages of both elementary and secondary teachers: the average wage in the educational services industry, the level of unionization in the state and the number of elementary teachers employed in the state.

Wages

A large amount of occupational wage data2 became available for state-to-state and national comparisons with the recent advent of the OES wage survey. The OES wage survey is unique in that it represents the first time all states have collected the same wage data using the same procedures 3. This is the reason that state-to-state comparisons are now possible. In the past, when states developed and produced their own wage surveys, the data were not directly comparable due to varying methodologies and occupational definitions. Use of the OES codes, occupational titles and standardized methods have mostly eliminated these particular problems; some problems remain, such as missing data due to confidentiality rules.

For various reasons, including low response rates in the education industry, the following states did not have 1996 OES wage data available for either elementary or secondary teachers: Alaska, Florida, Maryland, Massachusetts, Nevada and Oregon. There were a few additional states that did not have data available for elementary teachers: Delaware, Illinois, New Hampshire and Wisconsin. Wage data and the number of elementary teachers for these ten states were not included in this analysis. Tables 1 and 2 show states ranked by wage for elementary and secondary teachers, respectively, with all available states' data included. Wyoming ranks 23rd of 40 states in terms of elementary teachers' wages, and 30th of 44 states in terms of secondary teachers' wages. It is important to note that hourly wages for these teaching occupations have been adjusted to reflect a 9 1/2 month work year.

There does not appear to be any relationship between teachers' wages and geographic location. For example, Idaho has the fourth highest wage for elementary and secondary teachers, but Montana, North Dakota and South Dakota appear in the bottom five of available states each time. Wages for elementary teachers are better in Idaho, Utah and Colorado than in Wyoming, but Wyoming elementary teachers make more than in Nebraska, Montana, North Dakota and South Dakota. The situation is quite similar for secondary teachers, except that Nebraska pulls slightly ahead of Wyoming there.

Wages for elementary and secondary teachers in Wyoming are clearly lower than the U.S. average. But in neither case do Wyoming teachers appear in the ten lowest paid of the states. Indeed, if every missing state were to have higher wages than those in Wyoming, Wyoming would still rank 33rd of 50 in elementary teachers' wages and 36th of 50 in secondary teachers' wages. However, the OES data do not exclusively reflect public teachers, but additionally include some teachers in private schools.

Statewide OES data are collected by sampling from each state's firms by industry. Currently available data are not separated by industry, but are averaged across the private and public sectors. The Bureau of Labor Statistics (BLS), which organizes the survey, requires a 75 percent response rate for statistical purposes. The OES data are also collected in three-year survey rounds; the 1996 numbers will be updated over the next two years.

According to the Standard Industrial Classification (SIC) system, the industry in which elementary and secondary teachers are classified is the major group known as educational services (SIC 82)4. Establishments included in this major group are those providing academic or technical instruction; also included are establishments providing educational services (e.g., libraries, student exchange programs and curriculum development). Elementary and secondary teachers may work in the public or the private sector, though the majority of the employment in these occupations does come from the public sector (nationally, 85.2% of elementary teachers and 90.5% of secondary teachers are employed in public schools)5.

Analysis

The three variables found to relate to the state-to-state wages of elementary and secondary teachers were industry wage (SIC 82), unionization level and elementary teacher employment (see Table 3). Industry wages (SIC 82) in Local Government6 were obtained for 49 states in 1996 (data for Hawaii were not available). Local Government data were selected over private industry data because most teachers are employed in the public sector. Unionization level data were available for all 50 states, represented by the percent of teachers in each state who had collectively bargained contracts7. Elementary teacher employment was provided by OES wage data 2 and as such, was available for 40 states.

Two multiple regression analyses of the data (n=39 states) showed that industry wage (SIC 82), unionization level and elementary teacher employment were statistically significant8 at the five percent level (i.e., each variable influences teachers' wages 95 times out of 100). Together, these three variables explained more than 60 percent of the variation in the wages of elementary and secondary teachers (R2=0.637 and R2=0.682, respectively). Tables 4 and 5 show some of the statistical data for the models that included these variables.

The industry wage (SIC 82) includes not only wage data for elementary and secondary schools, but also colleges, universities and professional schools, junior colleges and technical institutes, libraries, data processing schools, business and secretarial schools and some vocational schools4. Occupations within the educational services industry (SIC 82) run the gamut from janitor to college president; other examples of occupations in the industry include: elementary and secondary teachers, postsecondary teachers, vocational and educational counselors, teacher aides, librarians, secretaries, school bus drivers and cooks. The fact that industry wage (SIC 82), specifically pertaining to Local Government (i.e., excluding private sector), is statistically significant in the wages of elementary and secondary teachers indicates that these wages are within the normal and representative range for the whole employing industry (educational services) across states.

The proportion of teachers who have collectively bargained contracts (unionization level) is positively correlated to the wages of elementary and secondary teachers as well. This means that, in general, states which have higher levels of teachers belonging to unions also have higher teachers' wages. A case in point would be Mississippi, which has 0.0 percent collectively bargained contracts for teachers and also has the lowest secondary teacher's wages (of available state data).

The number of elementary teachers (elementary teacher employment) is also positively correlated to wages. It appears that more elementary teachers lead to higher wages for both elementary and secondary teachers. This makes sense, if at least part of the reason more elementary teachers are hired is due to an increased number of students (i.e., the demand for more elementary teachers results in higher wages as more labor is required). More elementary students would correspond, eventually, to more secondary students as well, resulting in more secondary teachers and higher wages for those teachers.

Variables which were tested for statistical significance and failed included: secondary teacher employment, population density, urbanization level, average wage across all industries, multiple job holders, proportion of high school graduates, unemployment rate, state house and senate composition, revenues for public schools, state and local government employment, per capita state tax collections, civilian labor force and employment. It is important to note that while the preceding variables did not prove viable within the model, other factors must exist which also play determining roles in elementary and secondary teachers' wages. Furthermore, some of these "failed" factors might yet prove to be significant in combination with some as-yet unknown variable.

Cost of Living

The question of cost of living usually accompanies any discussion of teachers' wages. The assumption is that if it is cheaper to live in a place like Missouri than a place like Connecticut, then wages are correspondingly less as well. The difficulty in proving or disproving the cost of living/wage relationship lies in how "cost of living" is calculated. The federal government does not calculate interstate cost of living due to the high cost of producing such figures. The Consumer Price Index (CPI), commonly referred to as the "cost of living" index, produces monthly indexes for the U.S., four Census regions and a few local areas on a monthly basis9. Some states, like Wyoming10, have agencies producing their own "cost of living" index, but due to varying methodologies, the data are not directly comparable.

One of the most comprehensive compilations of cost of living data is produced by the American Chamber of Commerce Researchers Association (ACCRA) on a quarterly basis11. The ACCRA Cost of Living Index measures relative price levels for consumer goods and services in participating urban areas. This means that data exist for comparing how expensive it is to live in one city versus another, but are not particularly useful in relating why the average statewide wage for elementary teachers is more in one state than in another.

For example, in Wyoming, ACCRA numbers were generated for only two urban areas during the third quarter of 1996. The participating cities, Cheyenne and Gillette, represented roughly 15 percent of Wyoming's total population in 1996. While such figures have many potential uses in comparing cost of living between Cheyenne and Gillette, they do not say much about the cost of living in Wyoming as a whole. Colorado had 11 participating urban areas in the third quarter of 1996, which represented about 36 percent of the total statewide population.

It is possible to weigh urban cost of living figures with urban population data and thereby arrive at some estimation of a statewide cost of living index (e.g., for Wyoming, this number would be derived by multiplying the cost of living in Cheyenne by the population of that city and summing that figure with that obtained by multiplying the cost of living in Gillette by the population of that city, then dividing by the sum of the two cities' populations). Again, the states would not be represented by a common population proportion. Furthermore, a trial run of weighted statewide cost of living figures for Wyoming and its neighboring states (Colorado, Idaho, Montana, Nebraska, North Dakota, South Dakota and Utah) did not indicate a statistical relationship between the weighted state cost of living and the wages of elementary and/or secondary teachers. So, although cost of living may be useful in comparing salaries from city to city, it is not appropriate in a discussion of average state wages.

Conclusion

An analysis of available state data including wages for elementary and secondary teachers shows that the wages of Wyoming's teachers are fairly good when compared to the wages of teachers in neighboring states: not as high as some, but better than others. Wages of elementary and secondary teachers are positively correlated with industry wages (SIC 82), unionization levels and elementary teacher employment. This, combined with the fact that there will be many replacement openings created in the public education system in Wyoming in the next five to 20 years 12, means that teaching professions should continue to be a promising career area for future Wyoming workers.

Gayle C. Edlin is an Economist specializing in Labor Market Information (LMI) with Research & Planning. She is also the Editor of Wyoming Labor Force Trends.

1 Associated Press, "Wyo Teacher's Pay Ranks in 10 Worst," Casper Star-Tribune, May 15, 1998, p. A1.

2 Bureau of Labor Statistics, Occupational Employment Statistics, 1996 Occupational Employment and Wage Data.

3 Wyoming Department of Employment, Research & Planning, Wyoming Wage Survey, 1996, pp. 1-8.

4 Office of Management and Budget, Standard Industrial Classification Manual, 1987, pp. 391-393.

5 National Education Association, American Education Statistics ... At a Glance.

6 U. S. Department of Labor, Bureau of Labor Statistics, Employment and Wages Annual Averages, 1996, p. 530.

7 F. Howard Nelson, The Institute for Wisconsin's Future, Are Teacher Unions Hurting American Education?, October 1996.

8 Mike Evans, "Where Does the Wyoming Worker Come From?," Wyoming Labor Force Trends, November 1996, pp. 4-5.

9 U. S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index Overview.

10 Wyoming Department of Administration and Information, Division of Economic Analysis, Wyoming Cost of Living Index.

11 American Chamber of Commerce Researchers Association, ACCRA Cost of Living Index, Third Quarter 1996, pp. i-ii.

12 Lee Saathoff, "Wyoming Public Education Industry (K-12): Aging Employment in the Wyoming Education System," Wyoming Labor Force Trends, October 1997.


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These pages designed by Gayle C. Edlin.
Last modified on October 3, 2001 by Valerie A. Davis.