 Welcome to the FeeCast, your weekly dose of economic thinking from your friends at the Foundation for Economic Education. My name is Richard Lawrence, and I'm here today with our beautiful panel, Anna Jane Perrell, Dan Sanchez, Mary Ann March, and returning special guest, T.K. Coleman. Welcome. Hello. Thank you. You look radiant as ever, Richard. Well, thank you, Anna Jane. It takes a lot of work, but, you know, we end up here every week, and do we do what we can, you know? So we're going to be talking about teachers today. We're going to be talking about those important people, I think, who have made differences in many people's lives, including, I can at least speak for my own, my life. I had a great teacher, I had many great teachers, one of whom was my fifth-grade teacher, Mrs. Conley, who in fact I just reconnected with on Facebook, and she went through a couple of my photos and started commenting and saying, you know, how great it was to see me. So I'm like a like frenzy to hear your attention. A little bit, and then, you know, then other people started commenting on those photos again, too. So it kind of revived those photos, as Facebook tends to do. Did she friend you, or did you friend her? I friended her. Oh, wow. So you were out there looking for her? I was. For many, many years, many years. Her name is Betty Conley, and again, my fifth-grade teacher. She taught me all sorts of things. In fact, she even gave me the chance to teach a computer club and a class to teachers and to students after school. The student becomes the teacher. Indeed. That was one of those times in our collective history where computers were fairly new to the classroom, and so it was important for the, you know, ten-year-old to be able to teach the teachers how that would all work. But today we're going to be talking about something that I think we might be able to add some economic and ethical context to. And that is a new series of stories that came out last week from Time Magazine and made a pretty big splash, actually. TK, you actually brought this to our attention. Teaching in America was the title of the series that Time Magazine had. Yeah. So it was a post by Katie Riley, and the headline says, I work three jobs and donate blood plasma to pay the bills. This is what it's like to be a teacher in America. And it's chock-full of really interesting and provocative quotes, but there was a cover series that they ran and promoted on Twitter, and that's the part that really caught my attention. Lots of celebrities were sharing it. And there were three covers with teachers on them and quotes on the cover, and I want to read those three for people to have some context. The first one says, my child and I share a bed in a small apartment. I spend $1,000 on supplies, and I've been laid off three times due to budget cuts. I am a teacher in America. Cover two, I have a master's degree, 16 years of experience, work two extra jobs, and donate blood plasma to pay the bills. I am a teacher in America. The third, I have 20 years of experience, but I can't afford to fix my car, see a doctor for headaches, or save for my child's future. I'm a teacher in America. And the post is pretty clear that teachers are people to actually give you another quote from Hope Brown of Kentucky. I love teaching, but we are not paid for the work that we do. And this is a common way that many teachers feel about themselves and that many people feel about public school teachers and kind of wanted to bring this to the table for discussion. Absolutely, I think, a really common narrative that teachers are some of our most underpaid. I mean, we perceive them as the most underpaid people, yeah, I mean, workers out there. Yeah, well, it was just a couple of months ago that we all saw in the news the strikes that were happening in Oklahoma. That's right. And a couple other states as well, and they were striking because, again, they believe that they are underpaid. Yeah. And one thing that came up during the, when there was that wave of strikes and protests is that there's a lot of misinformation about that propagated by the media. So we have an article on feed.org called how media outlets misinform the public about teacher pay and some of the things that they don't factor in, they don't adjust for the cost of living of the different states. Right, so between New York City and somewhere in Kentucky, there might be a very big, there is a very big difference in the cost of living. Exactly. And in particular, Oklahoma was in the headlines and the cost of living is quite low in Oklahoma. You were going to say something? Yeah, I did pull some numbers. So this year, the Oklahoma starting salary for a teacher with a bachelor's degree in zero years of experience is $36,600. And just to give a little context, according to pay scale, the average Oklahoma salary this year is $48,000. So about $12,000 underneath the average for starting out teachers. But I was a little surprised. I thought, given all of the news and the strikes, I was expecting a much lower wage. When I was working full-time in retail, I think I was earning roughly $25,000 a year. And so I was surprised that it was as high as $36,000 to be honest. One line that we have in the article I mentioned is adjusted for costs of living, the average annualized immediate compensation of Oklahoma teachers in 2016 to 2017 was about $102,943 or roughly twice what CNN had said a teacher with a doctorate degree in 30 years experience will never make in most districts. Because it's extremely affordable to live where the, I guess, salaries are being pulled. Another thing is that they often don't include benefits. That's exactly right. Which you've got retirement, yeah, you've got crazy retirement benefits. You've got, yeah. Well, and it's interesting too because, again, I feel like this time magazine piece actually sort of compresses the data in a way that isn't all that useful for us. So they tell us that there are 3.2 million K through 12 full-time teachers in the country. All right. That's a number, a big number. But then average nationwide salary, 3.2 million full-time K through 12. About half New York City. Yeah. I know that much. Average nationwide salary, which is, I think, a bit interesting to unpack, is $59,000. And like you said, that doesn't include the pension benefits, it doesn't include other sorts of benefits, it doesn't include the fact that they take a summer off. It's another big thing. Yeah. One line that we have is that an average of 37 percent more hours are worked by private industry employers per year than teachers. Right. Right. So we're throwing out a lot of numbers. And I think that none of us here would begrudge teachers or anybody, for that matter, for trying to get their money, trying to get increases in salary. So I think that's totally understandable. We all want to feel like we're being compensated and compensated fairly for the work that we're doing. But how is the big question? Because do you do it through coercion or do you do it through market negotiation? And you could argue that, especially public school teachers, that they're not asking customers or even private employers to just pay more. They're not asking. They're demanding that taxpayer money be forcibly transferred to them. Well, in the sentiment that you're saying there, Marianne, is echoed in the article. Hope Brown from Kentucky, who you mentioned, TK, says in the piece, I do want to be paid what I'm worth. Yeah. I was going to say. That it's a very understandable thing to say, well, we all should value education a lot. We should be paying these people tons. But what you're kind of saying, Dan, is that you have to think about how we end up accounting for that value. Is it going to be kind of like governmental coercion or choice? Right. And then you might wonder, OK, in a market, in an actual market for their labor, would they actually be paid higher? Because if they are offering a lot of value. But a big part of value is not just the good that humanity as a whole gets from this, but the availability of it. I mean, it just goes back to the alleged diamond water paradox that Adam Smith raised, and then this notion that, OK, well, why should diamonds be worth more than a bottle of water when a bottle of water is what we need to live in the same way as education? It's like everyone needs education to become a good person. But again, there's a lot of water and there's not very many diamonds. And it's all about like, so you have to consider the supply. And there are a lot of people who are able and willing to offer teaching services a lot fewer than are able to offer doctor services, which is often the example that people bring up. Whether they do it well is another question entirely. And that goes into all sorts of rules surrounding tenure and teachers unions for employment and termination. All that would go into whether you actually have good service delivery by these teachers. But you said something a moment ago, Dan, that I do want to delve into. And it kind of leads into the next topic that we want to discuss here. And Hope Brown, again, the teacher who is mainly profiled in this piece in Time Magazine, says that if budget cuts continue, so we'll just pause and have that integrate into our consciousness for a second. If budget cuts continue, teaching will cease to be a viable career for educated, engaged, ambitious people. And I think that's an interesting statement because I believe truly when someone is called to educate that they feel that it is not just a job. It's a calling, right? I mean, they feel in many ways that this is something they can do to add value and inspire children from a very early age. It's a valuable thing. But I feel like the direction of this piece, especially with the emphasis on budget cuts continuing, is that there's been something happening in the state funding. You were saying it might be compulsory and we can discuss that as well. There's something happening that is, you know, decreasing the amount of resources available for this profession that is necessary. Question is whether we actually need the state to be involved in it. So budget cuts continue. Is that something that it looks like there's actual, is it happening in education? Well, so in some of the research I did, I found that adjusted for inflation teachers across the US have seen an average decrease of $27 from 1996 to 2017. So I think there is an argument to be made by them that their wages aren't keeping up with inflation. The thing that I wonder and about the diamond water paradox that you brought up is if we're hearing a lot about teacher shortages, shouldn't that scarcity make their wages go up? Yeah. Yeah, but by how much? I mean, there might be, you know, a drought, but it doesn't mean that every bottle of water is going to be worth a diamond. I kind of want to talk about it. So can you read that quote that you read again? If budget cuts continue, teaching will cease to be a viable career for educated, engaged, ambitious people. Go back to the value, the one where she mentions her own. She says, I do want to be paid what I'm worth. OK, so yeah, being worth, I think that TK has made some interesting points in the past about personal value versus what you're giving. You know what I mean? Like your salary defining or not defining the value you add. So I don't know if you have any insights into kind of what teachers, the value they bring and measuring that. Yeah. You know, I think part of what makes this discussion so complicated is we have all sorts of conceptual categories that get conflated. So like being underpaid, that's a pretty loaded concept. And we have to kind of unpack that. I mean, what does it mean to be underpaid? There is a sense in which we can say teachers are underpaid, just like everyone here, we probably are underpaid in some sense. And in that sense, it would say, are you making enough money to be able to live comfortably or be able to provide for your needs within reason, right, assuming that you're not just aiming for luxury goods all the time and not having to sell your blood plasma. Yeah. Yeah. And from the descriptions that I'm reading here, it seems like many of them are underpaid in terms of what they need to be able to take care of their children and so forth. So there's no debate about that. But there's another aspect of this question. And that is, are you unjustly underpaid, right? Because it's possible that there may not be enough resources to compensate me for my work. And if that's the case, I'm underpaid. But am I underpaid because someone owes me more than what they're giving me? That's a different thing. So that leads us into the next distinction that Anna was getting at, which is between what I call ontological worth or maybe philosophical or spiritual worth, worth that has to do with what something is with its beingness versus economic worth, which has everything to do with how much another person is willing to pay you for the services you provide. Now, ontologically speaking, I think I'm worth a whole lot, right? And I don't know if I can be paid enough to account for that because I'm priceless. So human being is priceless. Ontologically speaking, I think music is perhaps more valuable than diamonds, right? Ontologically speaking, I think water is more important than diamonds. Diamonds are dispensable to me. Waters are necessary for human life. But that's different when I'm trying to get another human being to give me their money. When I want another human being to give me their money and I want them to do it voluntarily. Well, now I have to think about the value of what I'm doing, not just in terms of how much I think the world needs it, but how much of a priority it is to this person who has the money that I want. And unfortunately, the way we think about paying educators is negatively influenced by education itself because we don't really teach people about value creation. We don't teach them what money is. We don't teach them what markets work. And so when people graduate school, there's this kind of vague sense that they ought to receive a salary because of what they think they're worth, because of what their degree is, and they don't really have a concept of the relationship between how much my problems matter to you. What value you're adding and how many resources are out there to give me for the value I'm at. I think the value for value point that you're making really helps to kind of set aside another distinction that people make. They say, well, isn't it ridiculous that basketball players make like celebrity basketball players make so much more than teachers? When again, what the basketball player is offering is just such a frippery, whereas what teachers are offering are so essential. But again, when you remember that it's value for value, you have to think about how many people, how many individuals are being provided with value. So like LeBron James, you know, he is providing just just leisure, but to how many people like like a little bit of value to millions and millions of people that adds up to a lot of value being provided. And so he's being compensated accordingly as opposed to like, OK, maybe it is a lot of value that teachers are providing, but only to like 30 people, human beings at a time. But I think the argument is or I think that people perceive it. People that really I mean, do advocate for this and it is important is they're saying that people, everyone, education affects everyone because when you educate the future generation, you improve society. Right. LeBron James isn't improving society by ducking the basketball. Right. So we really should pay. We should all be paying more for that good. But so is food and so is babysitting. You know, all these things are like really essential in the aggregate and in the abstract. But it doesn't mean that every single food provider needs to be paid like a doctor or a basketball player. You know, what's also interesting about this is I think, Dan, you're keen on sort of looking at the alternatives to this public schooling side of thing. And I think it's also interesting and I don't believe it's captured in that time magazine piece, the alternatives that people have to public schooling today and typically what alternatives can do to the price of something, right? So if you have a substitute good, say, for example, homeschool co-op or YouTube video series or Udemy or Khan Academy or whatever. Typically what would happen is that those would come onto the market and you know, we all like things done cheaper, faster, better, right? So that would then depress the price of the competing thing. And in our case of public schooling, we're then probably talking about salaries of teachers at schools. But it's a bit different because it's compulsory and done through taxpayer dollars for the most part. That's right. Well, you could look at, oh, sorry. No, good. Oh, I was going to say, you could look at it kind of like, I mean, it's a public education. You can, in theory, look at it like a subsidy. We are subsidizing education. What does that do to the price of a teacher's salary? To the price of a teacher? What does it do if you think about how a subsidy affects prices? I don't know if you want to elaborate on that. Well, I was just going to comment to the idea about like online education. So if you have like the star basketball player equivalent of a teacher who is providing millions of people with educational lessons, then you would expect that person to be paid like a rock star. Sure. And so it doesn't necessarily mean that like education is valued less than than leisure. So this might actually be a case for more free market. Based education. So the thing about the basketball player versus the teacher comparison is that it really helps us see the difference between stated and revealed preference. Right. Because if you take a survey and you ask most people, what's more important? LeBron James dunking a basketball or a teacher instructing little children on how to do math, everyone's going to give the right answer because we've been through school and we know a test when we see it. We know how to give the right answer on a test. But then when you look at what we actually do, when scarcity and sacrifice is involved, when we have to decide at the individual level how we're going to spend our own time and money, we choose watching LeBron James over the teacher doing what the teacher does. And so we can get angry at that all we want. We can we can get really upset, but only by trying to understand that can we actually do something about the problem. The reality of the situation is that in spite of the small number of people who say this is what everyone ought to do with their money, the majority of people are telling you right now by what they do, what they would prefer to do with their money. And that's pay to watch NBA players, pay to watch baseball players. And so you can't have a debate about how we're going to pay these teachers without understanding the people that have the resources with which to pay them and what they value. Yeah. And watching the behavior like you're saying is what you mean by revealed preferences, not just surveying, not just asking, but actually seeing what people choose to do with their money or their time or their energy, whatever. So I do want to go back to a little bit of what we were talking about at the top, which was these cases, these very interesting and in many cases, sad stories of people who are forced to sell blood plasma or work a third or fourth job. That brings up the question outside of, I think, a little bit of what we've been discussing about how the market determines prices and how subsidies can affect prices. To what degree do some of these people have the responsibility to look at their own situation and say, well, maybe teaching for all of its nobility, for all of its value that it brings to them individually and to the people who they teach, how much is teaching maybe not the right job for them and how much should they actually take on themselves for the situation that they find themselves? Yes. So, you know, that's a really interesting question for me because I work with a lot of people that are college opt-outs. You know, I have an apprenticeship program that helps people launch their careers without a traditional credential. And when people choose to take that path, whether it's through practice or through coding boot camps or places like the Lambda School, they tend to get a drill. They tend to get drill by adults who whip out income statistics and say, well, I know that you want to start your own business. I know you want to go to a trade school and all of that. But people who get bachelor's degrees on average tend to make this much more over the course of a lifetime, and that ought to be something you consider. And my rebuttal to that has always been fair enough. It's always good to let people know the income implications of their educational choices. But can we do that to more than just college opt-outs? I think we all have a responsibility to challenge one another, to think critically about our educational choices. And what we know about those choices ahead of time. And unlike any other discipline, education is the one subject that we're always having this conversation about. Notice that we don't sit around and have debates about our plumbers making enough. We don't have debates about our, you know, garbage truck drivers making enough. We always come back to the teachers because this is one field that has a reputation for not paying well enough. And so I think we do need to challenge people that want to go into education not to feel guilty about any of this stuff, but to think deeply about do you feel called to do it in the same way that if someone says, I want to be an actor, great, I support your dream. But do understand this is very different from going into accounting. You're going to have to face some financial realities that will be tough. Are you up for that challenge? You know, and I think we need to do that to people that want to go into education more. That will be good for education and good for them individually. Absolutely. Yeah, I went, I moved from accounting over to the nonprofit sector here at the foundation. And it is it is a choice that I had to think up for a very long time about. And it is a reality of a choice that you make. And I remember being grilled by my father being, I mean, all my friends. And it is a decision you have to make and talking about talking about how an experience or a profession can give you value aside from what the salary looks like. Yeah. I think another important distinction that has to be made is that education and schooling are not the same thing. Good point. Yeah. Because people and that's why when you say that you're against public funding of education, that then people think that, oh, well, then you're against education. But often you can question whether what what some of what's happening in schools is even a service to begin with, or is it a disservice, especially that a lot of people, young people are traumatized by their school experience and and and actually have the love for learning crushed by their school experience. So so you can't assume that what they are providing is of that value to begin with. Yeah, it's almost as if we assume that simply because these people are in teaching professions and they are called educators that they must be providing something valuable as a service, right? That they must be delivering a curriculum or a course or information valuably, right? But the problem is just given the incentives and the structures that we've built up around public schooling that we pay bad teachers the same amount that we pay good teachers. And there's no real differentiation in sort of the pay scale because the unions have gotten so deeply embedded in how to negotiate these things. And so that's another dimension to all of this, that, you know, we need to discuss when it comes to the value that we're actually getting from a fifty nine thousand dollar average nationwide salary for K to 12 people. Yeah. So I did find something out kind of interesting to put this in somewhat of an international context. And actually I want to question question you all to guess how the United States ranks against other countries as far as teacher pay goes. And he guesses like on average, like who are we in the bottom? Are we in the middle? Are we in the top? What do you think? Top quartile is top twenty five percent. Yeah, I'll lean on the word quartile as well. Top quartile. I'll go with that one. That sounds sufficiently intelligent. I'm going to say the middle middle. Yeah, I'll say bottom just because I'm going to say it. I was surprised to find out that elementary school teachers in the United States are in the top five in the world. Top five percent. Top, not percent, just the top. So the top five countries for teacher pay for elementary school teachers is number one Luxembourg, Switzerland, Korea, Germany, and then the United States. And then for high school, it's I'm excuse me, that was high school and we're still in the top five for elementary school as well. Yeah, I wonder if those numbers of pay the best in relation to Yeah, we can complain all day that teachers in America aren't getting paid adequately, but we're above Austria, we're above Canada, Ireland, Japan, Portugal. We do really well and think about how that contradicts this whole when as budget cuts continue conversation. So you've got that on one hand and on the other hand, you've got the notion that we're underperforming in those international stats. Every time we talk about teacher pay, we talk about the fact that the United States is lagging and falling further behind internationally. All right, I have a request. Oh, you go first. I might change the direction of the conversation. So I just wanted to take a quick case study. I mean, so in Atlanta, we have this amazing school called the Ron Clark Academy, and I find it really fascinating because it has a lot of these ideas play out. It's a nonprofit, but it's completely privately funded by donors. But it was founded by Ron Clark, who this is where, to me, innovation is so key. So if you are called to educate and you really care about how students learn, Ron Clark created his own curriculum. And then created a school around it and got people who, like we say, if you value education, you should put your money where your mouth is kind of thing. And so he, you know, he's had such a supportive donor base that has created the school that now is, I mean, so many has received so many awards is so recognized as this incredibly different than public education, but is totally free for its students. So it is for essentially it's for students who they apply and they get in. It's kind of like a private school, but it's completely free for the students. And I just think that that is all of these things that we really care about, which is innovation. So you create a better curriculum. How can we really educate students and they? How can we make them incredible students? And then it's also got, you know, if you really do, it's market support of this idea, which I think is also really cool. So Ron Clark actually, you know, saw a problem. He didn't choose to be engaged in the political side of trying to solve it, which is a whole big mess and takes a long time. And we all have competing interests. He ended up doing this, which is amazing. So TK, you were going to say something else here that hopefully will bring us home and end the whole podcast today. Yeah. So I want to talk for a minute about how we can encourage teachers to be more wealthy, how we can show them how to be more wealthy, because I'm not one of those people who believes that people should just be happy with whatever they make. I'm not one of those people who believes that money is evil or that wealthy. Wealth is bad. I believe it's a good thing. And if you want more of it than what you have, we ought to support that quest, right? And so I don't want to send out a signal and I don't think we are, but I want to make this explicit that we're not saying to teachers, hey, we're in the top five. You should shut up and be happy with whatever you make. No, let's let's figure out how to maximize your income potential. And here's one thing I want to point out. I think to make a complaint about being underpaid is to make a complaint about who is actually doing the paying. Right. So let's say I think I deserve one million dollars to appear on the feedcast. Wink, wink, right? And I'm not making that. And I say, well, I'm not getting paid enough to make appearances on the feedcast. Well, I'm not just making a complaint about the amount I make. I'm making a complaint about the specific organization that asked me to be on here. And so if I'm not receiving value from the system or the entity that's paying me, then that means I can negotiate with that entity. I can argue with them or I can opt out and try to figure out a way to get more value from another entity. And so we focused most of our conversation around the value that teachers to teachers create. But I also think there's room to talk about the the people for whom we create that value and how willing they are to compensate us. So let's say I sing and I want to get paid to sing. And I sing for one person and they say, OK, that's a decent song. I'll pay you a dollar to sing to me every day. Well, I'm going to feel like an underpaid musician and I can argue with that person and get angry at them. But what if I can find someone that says, well, I value you're singing a little more than that person and I'll pay you $10 to sing me a song every day. Well, now I'm moving in a positive direction. How does this relate to education? I think it's a total myth that the world values education more than it values basketball or other things, because the world shows us over and over again that they are willing to pay top dollar for education when we educate them about things they care about and when we don't force them to pay the teacher, right? So an example of this would be you take Tony Robbins seminars. I don't care if you like Tony Robbins or not. Doesn't matter to me at all. But I know that people pay thousands of dollars to go listen to Tony Robbins for just a weekend, even though they know they're going to go home and their life isn't going to be changed anyway, because he's educating them about things they care about. So I think what there's room to do is to educate educators about how to be more entrepreneurial and what they do and how to not depend on a system that clearly doesn't value them enough. Because when you say I'm underpaid, you're not talking about me. You're not talking about anyone at this table. You're talking about a very specific system that has a very specific way of procuring resources and a very specific way of paying you. And if that system doesn't respect you or value you like you want to be valued, why not entertain the idea of opting out of that system and going to deliver your goods to people that actually respect what you know? I'll put... And with that, I think we might have to offer a dollar for you to sing us a song. I'll wait for ten dollars. Well, thank you, everybody. Thank you, TK. Thank you, Mary Ann, Dan and AJ. And we'll see you next week on The FeeCast.