Teachers Will Give Up Tenure—for the Right Price

Teachers Will Give Up Tenure—for the Right Price

By Allison Schrager

The debate over teacher tenure, now fiercely under way in New York, California, and North Carolina and surely coming soon to a state near you, is usually framed in terms of education. Tenure advocates insist it’s a benefit that offsets relatively low wages and is necessary for better teaching; critics say it keeps too many ineffective teachers in their jobs and hinders reform. But there’s another way to look at it: If tenure is a benefit, like medical or dental, then it’s worth actual money. Taking it away is big pay cut.

Just how big a pay cut is hard to say. So far no one has offered enough money to persuade teachers to give up tenure. Former D.C. school chancellor Michelle Rhee tried and failed. Republicans in the North Carolina state senate floated a proposal that would have given teachers an 11 percent raise if they gave up their tenure. Under their plan, the average teacher would have gotten $5,200 more a year. The legislators abandoned the plan in early July after facing opposition in the House, an indication that the teachers weren’t happy with the offer.

So how much would it take? Calculating the value of teacher tenure is difficult, in part because it depends on the teacher. A high school math teacher, for example, may have more job alternatives than a third-grade generalist, which may make an explicit guarantee of job security less valuable to Ms. Math. That’s one reason to oppose pay-for-tenure swaps. The teachers with the highest incentive to choose tenure are those with the worst chances in an open job market.

We also can’t simply compare the salaries of teachers with and without tenure, because private school teachers, who don’t typically have the same job security public school teachers do, are paid on average 32 percent less than public school teachers. There are lots of reasons for this that are basically irrelevant to the question at hand; suffice it to say the comparison doesn’t help us here.

Another alternative is to look at the value of tenure in other occupations. State and local government employees (who are not teachers) don’t have guaranteed job security, but they are three times less likely to lose their jobs than private sector workers. UCLA economics professor Lee Ohanian estimated that public sector job security is worth about 10 percent of these employees’ salary. Teachers have even more security, so their premium may be larger. By Ohanian’s estimates, the 11 percent proposed by North Carolina’s state senators wasn’t high enough.

Another way we can measure the value of job security is by comparing wages in the U.S. to those in France. Until recently, firing an employee in France was nearly as hard as firing a tenured teacher in the U.S.. According to the International Labor Office, manufacturing workers in the U.S. (before the recent French labor market reforms) were paid about 11 percent more per hour than manufacturing workers in France. Although wages differences across countries capture other benefits, French employers don’t have to spend as much on employee health care. This, too, suggests that for American workers, tenure is worth more than 11 percent.

When the North Carolina proposal fell apart, critics claimed that tenure and salary have nothing to do with each other. That’s wrong. Whether or not you think teachers should have guaranteed job security, tenure is undeniably a benefit with significant value. We just haven’t figured out how much it’s worth. And once we do, we can determine if tenure is the best way to pay and attract the best teachers.

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