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Evidence suggests that moving away from seniority pay improves teacher quality

Recently, I wrote about new research which showed that collective bargaining laws harm students, with black and Hispanic men particularly affected. These findings are particularly relevant in the wake of the Supreme Court’s decision in the Janus v. AFSCME case, which ruled that forced union dues were unconstitutional. The labor market for teachers will look very different in the future. What might it look like?

A new paper titled ‘The Labor Market for Teachers Under Different Pay Schemes‘ by economist Barbara Biasi gives some indication. Biasi notes that

The vast majority of districts pay teachers according to similar lock-step schedules. Under this regime all teachers with the same education degree and years of experience are paid exactly the same amount, regardless of their effectiveness, their skills, or the demand for their labor (Podgursky, 2006). These schedules are often very similar across all districts within a state, owing to pattern bargaining facilitated by the state’s teachers’ union.

“If allowed to set pay in a more flexible way, could school districts improve the quality of the teaching workforce?” she asks

Data from Wisconsin allows Biasi to examine this question.

In 2011 the Wisconsin legislature passed Act 10, a law that discontinued collective bargaining over teachers’ salary schedules and limited negotiations to base pay. Before the passage of Act 10 Wisconsin had been a state with very strict adherence to lock-step schedules, which were negotiated between each school district and its teachers’ union. Act 10 gave districts full autonomy to unilaterally decide on compensation and allowed them to negotiate salaries with individual teachers using any criteria the two sides deemed useful.

The result, according to Biasi, is that “Teacher quality increased in these districts relative to those with seniority pay, due to a change in workforce composition and an increase in effort”.

A switch away from seniority pay [SP] towards flexible pay [FP] in a subset of Wisconsin districts, following the interruption of [collective bargaining] on teachers’ salary schedules mandated by Act 10 of 2011, resulted in higher-quality teachers moving to FP districts and lower-quality teachers either moving to SP districts or leaving the public school system altogether. As a result, the composition of the teaching workforce improved in FP districts compared with SP districts. Effort exerted by all teachers also increased.

Public policy must deal with the world as it is, not as we would wish it to be. As in any profession, some teachers are better than others. We might wish that more effective teachers paid the same as less effective teachers would work just as hard, but theory, and this evidence, suggest that this is not the case. If we want to get the best out of our teachers, we need a labor market structured to encourage that.

John Phelan is an economist at the Center of the American Experiment. 

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