Teacher Pay Rates Unusually Stable

No one’s getting rich, but to most, it looks like pretty good money

A teacher with 31 years of experience lamented the compensation of teachers today and stated in an interview in The Detroit News that low pay is a reason why younger people are staying away from his profession.

“Our youth just don’t want to go into teaching because there’s no financial stability,” said John Anderson, a teacher at Jackson County Western High School, in The Detroit News. Anderson earned $74,423 in 2016-17.

ForTheRecord says: Michigan teachers make more today than their predecessors did once you factor in inflation, according to the National Center for Education Statistics.

The average pay for teachers in Michigan in 1970 was $8,626, or $61,585 in 2016 dollars. The average teacher pay in Michigan in 2016 was $61,875. And the average pay for teachers in Michigan in 1980 was $15,970, or $59,877 in 2016 dollars.

In other words, teacher salaries have been about the same for nearly 50 years.

Under pension reform legislation passed last week, going forward new teachers will get substantial employer contributions to their own tax-deferred 401(k)-type retirement accounts. (Everyone gets a contribution equal to 4 percent of their salary automatically, and the state will match another 3 percent of an employee’s own contributions).

There are no guarantees, but since 1970 money invested in a conservative portfolio that has half its money in bonds and half in an S&P 500 stock market index fund has earned an average annual compound yield of 9.0 percent. At that rate, a teacher earning an average salary of $60,000 who added her own 3 percent to a 7 percent annual state contribution would have $947,047 after 30 years.

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A “bottlenecker” is someone who uses the power of the government to limit competition in the market and artificially boost their own profits. Bottleneckers use a variety of methods to achieve their goals, including tax loopholes, regulations, occupational licensing requirements, minimum wage laws and many more. The end result when these special interest bottleneckers succeed is fewer choices and higher prices for consumers, fewer job opportunities for workers and less innovation throughout the economy.

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