How The Great Recession Impacted Teacher Pay


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The most recent economic downturn – commonly referred to as the Great Recession – impacted all aspects of our society including public education. According to the United States Bureau of Labor Statistics the Great Recession began in December 2007 and ended in June 2009. However, the impact of this economic downturn on public education lasted well past summer 2009. Many school districts around the country are still feeling the impact of the recession today – more than seven years since it officially ended. The downturn in the economy forced many school districts around to country to reduce their expenditures – in some cases this included reducing teacher salaries.

Flat Funding

According to data from the United States Census K-12 funding was relatively flat on a per pupil basis during the recession (Fiscal Years (FY) 2008 and 2009) and remained that way for four years after the recession (FY 2011 to 2014). From FY 2008 to 2014 per pupil spending at the national level only increased by 7.3 percent. In fact, seven states actually reduced their per pupil expenditures during this time period and only 17 states and the District of Columbia increased their K-12 per pupil spending above the rate of inflation. Flat education funding directly impacts teacher pay due to the fact that it is the largest single expense that schools must deal with. In the U.S. Census’s most recent data – teacher pay and benefits accounted for 60 percent of all educational expenditures.

Pay Not Keeping Pace With Inflation

With flat K-12 spending since the end of the Great Recession it’s no wonder that teacher pay has also remained relatively flat during this time period. Data from the National Education Association’s Rankings & Estimates publication shows that at the national level teacher pay increased by 8.8 percent from FY 2008 to 2015. During this time period inflation, as measured by the Consumer Price Index, increased by 14.2 percent. Fourteen states and the District of Columbia did manage to increase teacher pay above the rate of inflation – but that means that 36 states did not. In fact, 20 states saw increases in teacher pay that were less than half that of inflation. Arizona actually saw a real decrease in teacher pay of 0.8 percent between FY 2008 and 2015 (See table below).

States Teacher Pay Changes (2007-08 to 2014-15)

Largest Change In Teacher Pay   Smallest Change in Teacher Pay
District of Columbia 24.5%   Arizona -0.8%
North Dakota 24.2%   Mississippi 0.4%
Vermont 23.7%   North Carolina 1.0%
New Hampshire 21.2%   Illinois 1.0%
Nevada 18.8%   Louisiana 2.0%

Teacher Pay and Recruitment

While teacher pay is not the only factor that individuals look at when entering the teaching field – it is a component in most people’s decision-making process. If districts hope to recruit quality teachers they need to offer competitive salaries. To retain quality teachers their salaries need to increase annually at a rate that allows them to maintain their standard of living. As state economies begin to improve there should be more funding available for public education. State policymakers may wish to target some of this additional education funding to increase teacher compensation to make-up for the negative impact that the Great Recession had on teacher pay. While increased teacher salaries alone will not solve the teacher shortages that some states and districts are facing – increased salaries can be used as part of the solution to this problem. 

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