At The Quick and the Ed, Chad Aldeman has an interesting post up about how steep salary schedules affect the ebb and flow of teachers into and out of the profession.
I wrote a story not long ago about how most pay systems are “backloaded,” with teachers earning degrees for longevity and for earning degrees, neither of which is particularly well correlated to teacher effectiveness. In other words, these systems reward veterans and those teachers who hold advanced degrees, regardless of whether those teachers are the most effective. They also exert pressure on teachers to stay in order to get the pay increases that accompany a certain service milestone or the completion of a degree.
Aldeman proposes a schedule that pays beginning teachers more (such as New York City’s) and does away with most of these salary differentials and would get rid of the perverse incentive to stay in the profession longer:
Unlike districts with hard plateaus, the proposed schedules reserve small bonuses from years 11-25. And, instead of large arbitrary increases before and after multiple years of stagnation, the new schedules follow a gentle, predictable curve that places no extra emphasis on any one year. Teachers who felt burned-out after year 19, for example, would feel no strong financial compulsion to stay an additional year."
The only quibble I have with his analysis is that for many teachers, even if the salary schedule was retooled, there would still be a strong financial compulsion to stay: their pension system. Defined-benefit pensions become much more lucrative if a teacher stays until the early-retirement mark.
I just wrote a companion piece to the salary story focusing on the way pension systems exert this kind of push and pull on hiring. Like salaries, defined-benefit pension plans strongly favor veterans, and as the economists quoted in the story argue, that ties up the money that could be spent on other options, such as higher salaries for novices. Such plans can also hinder attempts to attract midcareer talent, because those individuals frequently have to sacrifice their employer contributions if they move to a different state, they say.
And I could be wrong, but is it possible that one reason it’s so difficult to fire a tenured teacher because the date the teacher separates from the system literally means a difference in hundreds of thousands of dollars of net pension wealth?
This is wonky but important stuff, if you consider that 80% to 85% of a district’s budget pays for salary and compensation. More and more, though, we see interest among districts to consider whether or not that money is aligned to their goals for recruiting, retaining, and developing good teachers and increasing student achievement.
UPDATED: Chad writes in to point out that I missed a section in the full paper that talks about the confluence of backloaded pensions and salaries, especially in states like Florida that tilt especially heavily in this direction. He also writes that in the Sunshine State, this arrangement is a “win-win” for the district and the union during contract negotiations: The state, not the district, picks up the unfunded pension liabilities caused by increases to salaries. (Denver, which is the example I used in my story, has its own pension system, so it wouldn’t be able to shift these costs to the states. But most districts fall under a statewide pension program.)