The Economic Policy Institute and the Center for Economic and Policy Research put the teacher pay penalty at 25.2 percent in 2025. That is the gap between the weekly wages of public school teachers and other college graduates, adjusted for education, experience and demographic characteristics.
In 1996 the same measure was 6.1 percent. The 2024 figure was 26.9 percent, a record, so 2025 represents a slight improvement on a long deterioration. Put in cents on the dollar, teachers earned 74.8 cents against comparable graduates in 2025, down from 93.9 cents in 1996.
The adjustment matters. Raw salary comparisons are misleading because teaching requires a degree and often a masters, so comparing a teacher to the average worker overstates the gap. Comparing to other college graduates with similar experience is the harder test, and the penalty survives it. The figures come from Current Population Survey data analysed by Sylvia Allegretto, who has tracked the series for two decades.
The gap did not open because teacher salaries collapsed. Inflation adjusted weekly wages for public school teachers fell 6.2 percent over three decades, which is a decline but a modest one.
Over the same period, wages for other college graduates rose 28.8 percent. Almost the entire gap comes from that second number. Teacher pay stayed roughly level in real terms while the comparison group pulled away, which is why the penalty grew steadily rather than in a single jump.
The pattern differs sharply by gender, and the history explains why. From 1979 to 1993, female teachers earned a small premium over other female college graduates, averaging 3.3 percent. That reversed in the mid nineties and became a 20 percent penalty by 2025. For men the penalty is 34.5 percent. The most common explanation is that professions that had been effectively closed to women opened, and teaching lost a captive supply of talent it had never needed to compete for.
Teachers generally receive better benefits than comparable private sector workers, and defined benefit pensions have largely disappeared elsewhere while remaining standard in teaching.
The same analysis accounts for this. Once benefits are included, the total compensation penalty is 14.5 percent rather than 25.2 percent. That is a substantial difference and it is the more accurate figure for comparing what the two jobs actually pay.
It is also still a gap of one seventh, and it has widened on the same trajectory as the wage figure. Both sides tend to quote whichever number suits them, which is why the two figures rarely appear together.
There is also a timing argument worth noting. Pension value accrues heavily in the later years of a career and vests only after a set period, often five to ten years. A teacher who leaves after four years, which many do, gets very little of it. So the benefits advantage is real for those who stay and close to irrelevant for those deciding whether to enter, which is precisely the group a shortage depends on.
Teachers earned less than other college graduates in every state in 2025, but the size of the gap ranged from 10.4 percent in Rhode Island to 40.7 percent in Colorado. It was at least 25 percent in half the states.
A four fold difference between states suggests the penalty is not a fixed feature of the profession. Some states have chosen differently, which weakens the argument that low relative pay is simply what teaching costs and strengthens the argument that it reflects policy.
Starting salaries tell a similar story. The national average was around 48,000 dollars in 2024 to 2025, with many states near or below 40,000. That is close to what the median high school graduate earns, for a job that requires a four year degree and in most states a licence. Districts that have raised starting pay substantially have generally seen applications increase, which is the simplest available evidence that pay is a binding constraint rather than an incidental one.
Tenure is often discussed as though it were compensation, and in one sense it is. Job security has value, and defenders argue that stronger protection partly offsets lower pay.
Critics argue the trade is a poor one for everyone. It compensates all teachers equally regardless of performance, it makes dismissal slow and expensive enough that principals transfer weak teachers rather than remove them, and it means layoffs run in reverse seniority order so newer teachers go first regardless of evaluation.
The two arguments do not actually contradict each other. It can be true both that teachers are underpaid relative to comparable graduates and that the compensation structure rewards longevity over difficulty or performance. A district cannot pay a physics teacher more without paying everyone more, which is why shortages concentrate in the same subjects year after year while overall pay debates continue separately.
Both sides also tend to skip the same point. Tenure in K to 12 usually vests after two or three years, far shorter than the seven year track in higher education it borrowed its name from. Whether a two year probationary period is long enough to judge a teacher is a narrower and more answerable question than whether tenure should exist, and it is one that some states have already revisited without much controversy.
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