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Do teachers' benefits make up for lower pay?

USA TODAY logo USA TODAY 5/16/2018 David Carrig
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Teachers are public employees and generally receive pension and insurance benefits (medical, dental, vision) that cover themselves and their families. But are these benefits overly generous? Do the benefits make up for lower pay?

"I wouldn’t necessarily say it’s generous, it’s way better than having nothing," said Tyson Gardin of Fort Mill, S.C., a physical education health teacher. "It’s not something I can complain about because there are people that don’t have anything."

"You get a state plan but it comes out of your check, it’s not something that’s free," he added.

Recent teacher rallies and strikes in Arizona, Colorado, Kentucky, Oklahoma and West Virginia have put a spotlight on teacher pay and benefits. 

These are some of the issues surrounding benefits and what teachers have to say about them: 

Pensions 

The vast majority of public school teachers are eligible for defined benefit plans where the state promises a guaranteed payout for life upon retirement based on length of service and earnings history. Generally, both the employer and employee make contributions and the state is responsible for investing the money to fund the pensions.

The traditional defined benefit pension can be quite generous for teachers who have put in many years of service since the payout grows larger with time.  

Gallery by Business Insider

But many state pension plans are underfunded and a push for pension reform has attempted to address this issue by modifying the plans. The modifications include lowering benefits for new hires, increasing employee contributions and reducing cost of living adjustments for retirees. 

"Pension costs have been shifted to the individual," said American Federation of Teachers president Randi Weingarten, as teachers are being required to increase contributions to their pension program. 

A smaller number of states offer defined contribution plans, similar to 401(k)s, that do not guarantee a set payout. Instead, employers and employees contribute money to an account that the individual is responsible for investing to fund their retirement.  

Social Security 

Complicating the retirement savings picture, about 40% of public school teachers, or more than 1 million, are not covered by Social Security, according to Bellwether Education Partners, a nonprofit education organization.

Social Security originally only covered private workers, but in the 1950s, Congress allowed states to extend coverage to its workers. Some states opted out of enrolling their workers and instead relied on pension plans with more generous payout formulas, according to TeacherPensions.org, a  project of Bellwether Education Partners. 

Most teachers in these 15 states and the District of Columbia do not pay into the Social Security system and do not receive benefits, TeacherPensions.org says: Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas. 

Some teacher organizations argue that pension plans are not working for teachers and leave too many unprotected. TeacherPensions.org  estimates "that half of all Americans who teach in public schools won’t qualify for even a minimal pension benefit, and less than one in five will remain long enough to earn a normal retirement benefit."

The study recommends enrolling all teachers into the Social Security system to provide a level of retirement protection that is portable. 

Health insurance 

The average monthly teacher employee contribution for family coverage health care rose from $334.40 in 2010 to $460.16 in 2016, according to the Bureau of Labor Statistics’ National Compensation Survey

The portion of health insurance premiums public school teachers contribute has risen to 38%. 

"Given the cost of health care and the burdens of student debt, the wages are not what people can provide for their families," Weingarten said. 

Summers off

Many people consider this perk the best of all: Three months off in the summer. 

State requirements vary, but the standard public school year for most school districts is about 180 days, or 9 months. 

And many assume teachers get those three months off. But the National Education Association says that only students actually get the whole summer off. They argue that teachers spend summers working second jobs, teaching summer school, and taking classes for certification renewal or to advance their careers.

"As an educator you constantly have to be on top of trends, so it’s not like it’s just six weeks of me laying by the pool,"  said Sara Holloway, a fifth-grade English language arts teacher from Monongahela, Pa. 

 "You are taking classes in the summer, or you are reading material, or you are conferencing or blogging with other teachers, you are planning for the next year," she said.  

Comparing teacher benefits with those of other professions

Teachers do enjoy more attractive benefit packages than other professionals, a study by the progressive-leaning think tank Economic Policy Institute found. But the EPI analysis also concluded that teachers are still paid less than what workers with similar skills and education levels make even when factoring in benefits. 

Public school teachers’ compensation (wages and benefits) were 11% lower than that of comparable workers in 2015, the EPI found. The wage gap increases to 17% when just comparing wages. 

Other studies, however, claim the wage gap is overstated and that despite salaries lagging in some states, teachers are not dramatically underpaid overall. 

"The average teacher already enjoys market-level wages plus retirement benefits vastly exceeding those of private-sector workers," wrote Andrew Biggs, resident scholar at the conservative think tank American Enterprise Institute, and Jason Richwine, a public policy analyst in Washington D.C. 

The National Education Association reports that the average public school teacher salary for 2016-17 was $59,660.   But teacher pay varies significantly by state, ranging from a high of $81,902 in New York to a low of $42,925 in Mississippi.

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