Do minimum wages keep more highly educated, and thus—by federal No Child Left Behind standards—more ‘highly qualified’ teachers out of the classroom?

A number of reasons have been articulated to explain why schools in North Carolina and elsewhere cannot, seemingly, hire enough ‘highly qualified’ teachers to fill their needs. A common explanation is that pay is simply not attractive enough—too low—to draw and hold teachers in the classroom. But teacher compensation may simply be too rigid, not too low. When wages are legally determined and inflexible downward, the demand side of the market will seek out the lower-wage employee, as long as that employee meets legal professional standards.

As the June 30, 2006 deadline approaches, the No Child Left Behind law will require that all new teachers be highly qualified under the law, and that existing teachers gain highly qualified status under one of several methods the federal government has specified. So all hires, and all teachers, will be ‘high quality’—or have a special extension—as of June 2006. No Child Left Behind does not regulate pay; it does establish what are effectively teacher credentialing standards.

North Carolina, like many states, establishes teacher pay scales. These scales are de facto minimum wages for teachers; they depend on level of academic degree acquired, years of experience, and additional certification. Where you fall in the ‘matrix’ determines your base teacher pay in North Carolina. Under NCLB, however, every teacher will be ‘high quality,’ so why pay more for a more experienced teacher?

An advanced degree (Masters or above) or advanced certification in the teacher’s subject area, including National Board of Professional Teaching Standards (NBPTS) certification, satisfies the highly qualified teacher—HQT—standard. Although No Child Left Behind explains why fewer teachers met the legal standard when the law was first enacted, it does not explain the claimed ‘shortage’ of teachers in classrooms around the country.

Shortages are caused by faulty pricing, not by scarcity alone. Teachers unions have been quick to advance the ‘underpaid teacher’ theme, on the assumption that current public school wages are simply too low to attract teachers; that is, are below the current market-clearing level.

No Child Left Behind, along with teacher pay grades that amount to minimum wages, create a demand-side catch-22 for employers. Employers have a cost incentive to seek out and hire candidates with the least expensive baggage—meaning advanced degrees, NBPTS certifications, and years of experience. If employers cannot adjust wages, they will adjust quality (or, where possible, quantity).

The public school situation may seem odd when contrasted with private school practices. Private schools typically offer far lower salaries than do public schools in each state, yet report no widespread teacher shortage or teacher quality problems. The critical difference for private schools and private school teachers is wage and curriculum flexibility, and the ability of the employer to determine appropriate teacher qualifications within their institution. The need to successfully market a private education in a ‘free public education’ environment goes a long way to assure that client concerns about quality and other dimensions of the education experience are addressed by the school. In other words, private schools also have fairly rigid quality standards, they just aren’t uniform from school to school.

Consider two applicants for a position as a public school history teacher. One has a Bachelor’s degree, and no years of teaching experience. The candidate, if hired, must acquire a Master’s degree and become more highly qualified within a specified time period. This will automatically improve the teacher’s pay grade, as will each year of classroom experience. A second applicant, with Master’s degree in hand, zero classroom experience, is already highly qualified under the law, doubly so if they have taken the Praxis II exam as well in their area of expertise. However, the better prepared applicant, with a Master’s degree, is less likely to be hired.

In North Carolina in 2005-06, an entry level teacher with a Bachelor’s degree received $25,510 in base pay in year one. To hire the Master’s qualified entry-level teacher, the state will have to pay $28,060, or about 10 percent more, per teacher per year. This type of candidate can spend several years substitute teaching without a full-time offer, while openings in his field are offered to less qualified candidates. If he could legally offer to work for a more competitive wage, it is likely that the school would hire him. As it is, he can be competitive only by working in a substitute capacity (effectively lowering his wage).

Unfortunately for students, teachers face an incentive to delay pursuing an advanced degree, and therefore greater expertise, both 1) to increase the likelihood of initial employment, and 2) to acquire as many pay-linked credentials as possible, once inside the education system—where they are paid to do so.

In sum, it’s not a universally too-low wage, or even a universally too-high teacher wage that is putting the labor market for public school educators into imbalance. It’s the overall lack of flexibility, imposed by rigid pay grades instead of performance, subject area, or other wage-setting standard of excellence the school district may wish to pursue, that is preventing the right resources from flowing to the right uses.