Excerpted from Occasional Paper No. 7
Are Teacher Salaries in Wyoming Competitive Enough to Retain the Best?
In Monitoring School District Human Resource Cost Pressures 2013 (Monitoring 2013), the Research & Planning (R&P) section of the Wyoming Department of Workforce Services presented an examination of the labor market for teachers in Wyoming. The report focused on the percentage of teachers in Wyoming approaching retirement age, their earnings, and the potential impacts of their retirement. This article summarizes key points of the findings presented in Monitoring 2013, and discusses the distribution of school district employees by age, regional employment growth, and drivers of demand for teaching occupations in Wyoming. This article is designed to offer the reader an overview of R&P’s findings while pointing the interested reader to more detailed information where desired.
The contents of Monitoring 2013 are meant to answer, in part, questions raised by the Wyoming State Legislature. R&P is in the process of developing strategies to understand the labor market more broadly, and the concepts here can be applied to other occupations, such as nurses or those working in public administration. R&P’s related research on nursing employment in Wyoming can be found at http://doe.state.wy.us/LMI/nursing.htm.
The annual Monitoring reports produced by R&P since 2012 go into greater detail about the local and national context in which Wyoming school districts operate, while this article focuses more on the aging of teachers in Wyoming and the increased demand for new teachers Wyoming may experience as baby boomers retire. In this article, the term cost pressure refers to those factors influencing the level of compensation leading to the “recruitment and retention of a staff capable of producing superior work in a public school setting” (Gallagher, 2013). The five cost pressures outlined here represent a portion of the findings presented in the Monitoring reports, and are presented as an introduction to the larger body of teacher compensation analysis produced annually by R&P.
The Monitoring reports can be found at http://doe.state.wy.us/LMI/education_costs.htm.
Research for Monitoring 2013 drew on several sources of information, many of which are not publically available, or are only available to state employees, such as those at R&P, working under contract to the U.S. Bureau of Labor Statistics. One major source used for wage information was the Occupational Employment Statistics (OES) program, which is a state-federal partnership. The OES program is the only source of reliable occupational-based wage estimates in the country.
R&P produced school district wage estimates using confidential OES files for Wyoming and surrounding states (Gallagher, 2013). The OES survey permitted reliable estimates of teacher wages at the state and national levels. Developing information on school districts at the county level required another approach: using Wyoming Department of Education 602 (WDE 602) files, which provided us with detailed information on the contract wages of teachers and other staff hired.
For Monitoring 2013, R&P analyzed records from several administrative databases, including Unemployment Insurance (UI) employer accounts, UI wage records, Wyoming Department of Transportation drivers’ license files, and Wyoming Department of Education (WDE) staffing files. R&P also obtained access to licensing files from the Professional Teaching Standards Board (PTSB), an “independent professional licensing board that governs teacher licensure in the state of Wyoming” (PTSB, n.d.). The PTSB files were combined with R&P’s administrative databases to better understand the current supply of teachers available for school districts.
As demonstrated in Appendix A of the Monitoring 2013 report, the current licensed potential supply of teachers extends beyond Wyoming’s borders (Harris, 2013). Linking PTSB licensing files to UI payroll accounts in other states can only be accomplished by Labor Market Information sections of state workforce agencies. R&P knows of no other state or government entity which has analyzed teacher licensing files in this manner. This strategy facilitates a rigorous and meaningful analysis of school districts’ multi-dimensional labor supply.
Cost Pressure #1
Teacher Supply in Wyoming:
Can We Replace Those Retiring?
During the 2012/13 school year, more than one in five Wyoming teachers (21.9%) was age 55 or older (see Figure 1). In some specialized teaching occupations, the percentage of teachers age 55 and older was even higher; for example, among all middle school special education teachers, 28.7% were age 55 or older (Knapp, 2013).
In 2012/13, 13.7% of all teachers in Wyoming were eligible for retirement, a proportion that will continue to grow. Given the large percentage of Wyoming teachers at or nearing the traditional retirement age of 65, succession planning may be necessary for Wyoming’s school districts.
Across all industries and occupations, Wyoming had a greater proportion of workers age 55 and older (26.0%) than the national average (22.7%). In Wyoming, the proportion of workers age 55 and older was even greater in industries such as educational services, information, health care & social assistance, and public administration. According to R&P’s studies, a large proportion of workers age 55 and older working in these industries presumably will be leaving Wyoming’s workforce in the next 10 years as they reach the traditional retirement age of 65.
Nowhere was this more evident than in Wyoming’s educational services industry, where 29.6% of all workers were age 55 and older and 65.7% had at least a bachelor’s degree (see Figure 2). The phenomenon of large numbers of Wyoming residents with a bachelor’s degree or higher approaching retirement age is not limited to teachers, but the educational services industry has the highest proportion of workers age 55 and older.
Given the more rapid aging of the workforce in industries requiring post-high school degrees, circumstances may lead to significant competition for qualified employees (Knapp, 2013).
Cost Pressure #2
What Teachers Earn
Figure 3 compares the average annual wages of teachers in public schools in Wyoming to those in other states. During the 2011/12 school year, the average wage for all primary, secondary, and special education teachers (SOC 25-2000) in public schools in Wyoming was $59,314 (Manning, 2013). The average annual wage for teachers in Wyoming was higher than in all surrounding states and the national average ($57,580).
The difference in average wage for teachers between Wyoming and surrounding states is substantial. Of all surrounding states, Utah had the highest average annual wage for teachers ($50,870). This was $8,444 less than the average annual wage for teachers in Wyoming. South Dakota had the lowest average annual wage for teachers at $40,165, or 32.3% less than Wyoming.
Teachers’ wages are higher in Wyoming than in surrounding states for the majority of specialized teaching occupations. Table 1 shows the average annual wage for Wyoming kindergarten teachers in the 2011/12 school year was $54,850, nearly $16,000 more than in South Dakota and nearly $15,000 more than in Utah. In almost all specialized teaching occupations, Wyoming had the highest annual average wages, with the exception of preschool teachers not in special education. Colorado preschool teachers in the 2011/12 school year earned on average, $2,530 more than in Wyoming. The average annual wage for preschool teachers in the U.S. was $48,860, or $4,440 more than the Wyoming annual average.
Wyoming school districts currently face negligible cost pressure on salaries in relation to competition from surrounding states (Manning, 2013).
The earnings of those working in educational services — specifically teachers — may have had a significant impact on Wyoming’s economy. According to the 2012 Consumer Expenditure Survey (CES), the national average annual expenditure for persons holding at least a bachelor’s degree (as most teachers in Wyoming do) was $63,135; for persons holding a master’s degree or higher, the average annual expenditure was $82,606. According to the CES, nearly 74% of those with a bachelor’s degree or higher owned their homes, compared to 59% for those with a high school diploma (CES, 2012). As shown in Figure 4, 65.7% of those working in educational services in Wyoming held at least a bachelor’s degree in 2011, and all but 5.3% were state residents.
In other words, a large proportion of those who worked in Wyoming’s educational services industry in 2011 held at least a bachelor’s degree, and were likely to earn and spend more money than those in industries with a lower proportion of persons holding at least a bachelor’s degree, such as construction or leisure & hospitality. Likewise, the majority (94.7%) of those working in educational services were identified as residents of Wyoming, and were more likely to own a home.
By comparison, the characteristics of those who worked in leisure & hospitality may indicate that earnings from that industry had less of an impact on Wyoming’s economy: lower wages, fewer workers who held at least a bachelor’s degree, lower average annual expenditures, a higher percentage of nonresident workers (see Figure 4 for a definition), and fewer homeowners.
The differences in average earnings for teachers in the public and private sectors drove the methodology in this report. Published OES data do not distinguish employment or wages by ownership. In other words, published OES data do not differentiate between teachers working in public schools and those working in private schools. In order to better understand cost pressures on teachers’ mean annual wages, we used special tabulations of OES data and separated teachers into public, private, and total ownerships.
If we were to rely solely on OES survey data, we would still see that Wyoming compensates its teachers at a greater level across all ownerships compared to surrounding states, as seen in Figure 5.
Table 2 shows the number of teachers employed in the U.S., Wyoming, and surrounding states and their mean annual wage by ownership levels for the 2011/12 school year. In Wyoming, the mean annual wage for the 7,527 teachers working in public schools was $59,314. For the 667 teachers working in private schools in Wyoming, the mean annual wage was $34,295, showing that teachers working in private schools in Wyoming earned $25,019 less (or -42.2%) than teachers in public schools on average. Table 2 shows that teachers in the public sector were paid a higher annual wage on average than those in the private sector in all of the surrounding states (Glover, 2013). This difference suggests that employers of teachers in public schools were not experiencing pressure from competition from private schools, but rather from other public schools.
Table 2 also shows that the distribution of teachers by ownership varies from state to state. In Wyoming, for example, the 667 teachers working in the private sector accounted for 8.0% of all teachers. In Utah, the 4,696 teachers working in the private sector accounted for 15.3% of all teachers.
Cost Pressure #3
Increased Student Enrollment
In addition to the rapid aging of much of the teaching workforce in Wyoming, student enrollment in public schools is projected to increase. The combination of teachers aging out of the workforce and a projected growth in public school enrollment means that Wyoming may face a future shortage of teachers.
As seen in Figure 6, projections indicate that student enrollment and the population of those ages 6-18 are expected to increase, which should increase the demand for teachers (Manning, 2013).
Nationally, total public school enrollment is projected to grow at the rate of 0.6% per year through 2021 and the number of full-time equivalent (FTE) teachers is projected to increase from 3,209,637 in 2010 to 3,694,080 in 2021 (NCES, 2012).
Cost Pressure #4
The question of where teachers went and what they earned when they left employment with a Wyoming school district is important to understanding school district human resource cost pressures. During the 2010/11 and 2011/12 school years combined, 1,389 teachers left a contract job with a public school employer. As demonstrated by Glover (2013), teachers in the 2011/12 school year always lost wages when they left their contract jobs with public schools, no matter what their destination industries.
R&P’s research shows that younger teachers in Wyoming have a high rate of turnover, which is consistent with previous national findings (Hanushek, et. al, 2002). Figure 7 shows the age distribution for the 1,389 teachers who left contracted employment in Wyoming’s public schools for the combined 2010/11 and 2011/12 school years. This graphic also illustrates Robinson & Strunk’s statement (on a local level) that younger teachers “have a higher rate of turnover, which decline as teachers hit middle age/experience, and then rise again as teachers near retirement” (2006).
The largest destination industry for teachers who left employment with a Wyoming school district was another school district (Glover, 2013). Because teachers moved from district to district (or county to county, in many cases) replacement need varied by county. For teachers, the greatest replacement needs were found in Hot Springs (23.3%), Albany (15.7%), and Goshen (13.7%) counties; the lowest replacement needs were in Niobrara (5.6%), Lincoln (6.1%), and Park (6.5%) counties. Laramie and Natrona counties were tied at 6.7% (Glover, 2013).
The top three counties with the greatest replacement need for all public school occupations were Hot Springs (24.2%), Albany (21.3%), and Sublette (19.4%); the lowest three replacement needs were in Niobrara (8.4%), Laramie (9.3%), and Natrona (9.5%) counties.
One hypothesis regarding the larger replacement needs in particular counties is that the population of teachers is older in those areas. As the leading edge of the baby boom generation begins to retire, some Wyoming counties may face significant intra- and interstate competition for experienced teachers.
Cost Pressure #5
Pressures from Surrounding States
National and regional employment growth opportunities affecting Wyoming’s market have been slow in developing since the end of the Great Recession, which lasted from December 2007 to June 2009 (NBER, 2010). At the same time, employment in the region has grown more rapidly than in Wyoming (Gallagher, 2013).
Wage competition must also be “considered in the context of migration decisions made by households rather than individuals, and it is not without historic precedent for more stable and diversified labor markets to prove attractive to more highly educated residents of Wyoming” (Gallagher, 2013).
Based on the most recent Unemployment Insurance (UI) covered wage and salary employment estimates, job growth in surrounding states like Colorado and Utah is outpacing job growth in Wyoming. According to Bullard (2013), “Approximately 92% of wage & salary jobs in the state are covered by state unemployment insurance, while 2.6% of jobs are covered by federal unemployment insurance, and 0.9% are covered by unemployment insurance administered by the railroad retirement board. There are several categories of non-covered jobs, and together they account for approximately 5% of wage & salary jobs in the state. Some examples of non-covered employment include elected officials, students working at educational institutions, employees of churches, and workers at small nonprofit organizations.”
In December 2012, Utah (3.7%) and Colorado (2.7%) experienced the greatest over-the-year increase in UI covered wage and salary employment compared to December 2011. States with large urban areas – such as Colorado and Utah – experienced the most growth, while more rural states experienced a slow, steady increase in employment.
Tracking the recovery of surrounding states is critical if Wyoming is to avoid reacting after the fact to labor market changes.
The Complete Cost
In 2001, the Wyoming Supreme Court directed the Legislature to “design the best educational system by identifying the ‘proper’ educational package each Wyoming student is entitled to have whether she lives in Laramie or in Sundance,” and then “take the necessary action to fund that package” (State of Wyoming, et al., v. Campbell County School District, et al., 2001). The Legislature, in keeping with the Campbell decision, immediately hired a consulting firm to determine the “services which must be made available to all Wyoming school children and which the Legislature codified as a list of core knowledge and skills areas” (State v. Campbell 2001).
Monitoring 2013 is the second report in an annual series, and represents a response to the legislative directive to “the department of workforce services, office of research and planning, to conduct data collection and analysis necessary for the education resource block grant model monitoring” (General Government Appropriations, Chapter 26, Section 326[d], March 2012). Monitoring 2013 carefully examines the Wyoming school district labor market in an effort to better understand the factors involved in attracting and retaining experienced teachers in the state – a key component of the services offered to children in public schools. Monitoring 2013 expands the study of school district compensation and labor supply by incorporating analysis of the Professional Teaching Standards Board (PTSB) licensing information to better understand which subjects and grade levels will drive the need for teachers in the future (Harris, 2013). The complete Monitoring 2013 report can be found at: http://doe.state.wy.us/LMI/education_costs.htm.
Understanding the demographics of the public school labor supply is a key consideration of this report. Throughout much of the labor market, baby boomers have held onto jobs in industries with a substantial number of jobs that require post-secondary education, such as educational services. Because of this, young workers may have difficulty finding jobs in these industries, or may choose to work outside of Wyoming. The economy of surrounding states has grown more rapidly than in Wyoming, making it necessary to consider wage competition in the historical context of more stable and diversified labor markets proving attractive to educated residents of Wyoming (Gallagher, 2012).
Findings from Monitoring 2013
- During the 2010/11 school year, the average annual wage for all primary, secondary, and special education teachers in public schools in Wyoming was $59,314, an increase in the estimated mean of $2,245 over the 2009/10 school year. This salary was higher than in surrounding states and in the U.S. as a whole (Chapter 1).
- Teacher wages in Wyoming on average were competitive with surrounding states and the nation, but this was not the case in all of Wyoming’s counties (Chapter 2).
- Replacement need represents a recruitment cost, and the replacement rate for vacancies created by individuals leaving employment in public schools varied from 11.0% in 2008/09 to 13.2% in 2010/11, (Chapter 3).
- Wyoming may become increasingly dependent on importing teachers as the baby boom generation retires. More than one-quarter of special education teachers are approaching the traditional retirement age of 65, and represent the most immediate replacement need (Chapter 4).
- Given the rapid aging of the workforce in industries requiring post-high school degrees, school districts may encounter significant competition for experienced employees (Chapter 5).
Findings from Appendix Staff Reports
- A significant portion of individuals (33.5%) can teach in at least two content areas, allowing a district to employ teachers in varying content areas during a given school year (Appendix A).
- In each age group, males’ average yearly wages were greater. It is therefore of interest that the largest earnings gains from 2011/12 to 2012/13 were found among younger females who remained in the same district but changed occupations (Appendix B).
- Report findings indicated a need for succession planning, and R&P suggests that the Wyoming Department of Education (WDE), potentially in conjunction with the College of Education at the University of Wyoming, engage school districts on this topic. While it appears that the University of Wyoming is producing enough new teachers to meet replacement need, it is not clear if the teachers produced hold endorsements in the subject areas that will meet the most current and future demands.
- R&P recommended that files from the Wyoming State Retirement Board be made available to provide accurate, historic and current identifiable trends in credentials of those retiring from public schools.
- WDE 602 files should contain position numbers and related job descriptions to facilitate determining what districts require at a basic minimum to perform certain tasks and how positions evolve over time.
- R&P recommended the standardization of data collection for the WDE teacher recruitment files to measure the duration of job openings and estimate the recruitment difficulty for specific endorsements.
- R&P recommended use of this report by policymakers, school districts, jobseekers, and other parties to effectively address labor supply issues and allow for the framing of future research questions in the context of empirical results.
Future research using administrative databases is needed to explore the specific circumstances under which school district employees change districts or occupations. R&P will also incorporate data from the Wyoming Retirement Board into future analyses to identify current and historical trends in retirement, and to identify the level of district use of substitute teachers. R&P will also continue its work with PTSB licensing files, including linking them to UI payroll accounts in other states – work that can only be accomplished by Labor Market Information sections of state workforce agencies. Additionally, R&P has started research using databases to create household level data which will be used to explore the relationship between leavers and their partners. R&P views the teacher compensation analysis as a valuable tool in the recruitment and retention of professionals in other occupations, as the methodology used can be applied to other educated professionals in Wyoming.
National and regional employment growth opportunities affecting Wyoming’s market will need to be monitored, in order to better understand the competition our school districts face from neighboring states. R&P notes the recommendations of the National Center for Education Statistics’ Teacher Compensation Survey (TCS) Panel, in particular the recommendation to “explore obtaining the financial information for the TCS from unemployment insurance (UI) or other records held by state workforce or tax agencies” (NCES, 2013).
Finally, cost pressure analysis using administrative databases is a relatively new concept and practice in this country. Naming conventions for the types of phenomena we describe in this report are not established. Future research will include improving the lexicon of administrative database research, so that a common language may be employed.
Bullard, D. (2013). Local jobs and payroll in Wyoming: Job growth remains weak in first quarter 2013. Wyoming Labor Force Trends, 50(10). Retrieved February 4, 2014, from http://doe.state.wy.us/LMI/trends/1013/qcew.htm
Gallagher, T., Glover, T., Harris, P., Knapp, L., and Manning, P. (2013). Monitoring School District Human Resource Cost Pressures, 2013. In M. Moore & P. Ellsworth (Eds.) Casper, WY: Wyoming Department of Workforce Services, Research & Planning. Retrieved January 29, 2014, from http://doe.state.wy.us/LMI/education_costs.htm
National Bureau of Economic Research. (2010). Retrieved September 19, 2012, from http://www.nber.org/cycles/sept2010.html
National Center for Education Statistics. (2013). Teacher Compensation Survey (TCS) Technical Expert Panel (TEP) Final Report.
Professional Teaching Standards Board (n.d.). Retrieved February 3, 2013, from http://ptsb.state.wy.us/Home/AboutUs/tabid/55/Default.aspx
Hanushek, et. al. (2002). Publicly provided education. Handbook of Public Economics, 4. pp. 2045-2141.
U.S. Bureau of Labor Statistics. (2013). Consumer Expenditure Survey. Retrieved from http://www.bls.gov/cex/#tables