For Many Teachers, Reform Means Higher Risk, Lower Rewards

September 30, 2011

One of the central policy ideas of market-based education reform is to increase both the risk and rewards of the teaching profession. The basic idea is to offer teachers additional compensation (increased rewards), but, in exchange, make employment and pay more contingent upon performance by implementing merit pay and weakening job protections such as tenure and seniority (increased risk). This trade-off, according to advocates, will not only force out low performers by paying them less and making them easier to fire, but it will also attract a “different type” of candidate to teaching – high-achievers who thrive in a high-stakes, high-reward system.

As I’ve said before, I’m skeptical as to whether less risk-averse individuals necessarily make better teachers, as I haven’t seen any evidence that this is the case. I’m also not convinced that personnel policies are necessarily the most effective lever when it comes to “attracting talent,” and I’m concerned that the sheer size of the teaching profession makes doing so a unique challenge. That said, I’m certainly receptive to trying new compensation/employment structures, and the “higher risk, higher reward” idea, though unproven in education, is not without its potential if done correctly. After all, teacher pay continues to lose ground to that offered by other professions, and the penalty teachers pay increases the longer they remain in the profession. At the same time, there is certainly a case for attracting more and better candidates through higher pay, and nobody would disagree that accountability mechanisms such as evaluations and tenure procedures could use improvement in many places, even if we disagree sharply on the details of what should be done.

There’s only one problem: States and districts all over the nation are increasing risk, but not rewards. In fact, in some places, risk is going up while compensation is being cut, sometimes due to the same legislation.

For example, Ohio’s controversial legislation (Senate Bill 5) eliminates tenure for new hires and guts collective bargaining rights, while simultaneously rolling back pay increases and increasing health care contributions (effectively a pay cut) for teachers and other public employees. Ohio Governor John Kasich actually promoted the bill as a cost-cutting measure, with the savings coming from public employee compensation, including that of teachers. In other words, more uncertainty in exchange for nothing or even less, all in the same bill.

Similarly, recent legislation in Florida severely weakened teachers’ collective bargaining rights, eliminated tenure for all new hires and instituted merit pay throughout the state. There is still little idea of where the money for performance bonuses will come from, but it’s doubtful they’ll make up for the fact that Governor Rick Scott has already said he will be closing the state’s $3.6 billion shortfall in part by cutting teachers’ benefits. Making things worse, Florida teachers’ base salaries have remained largely flat for the past four years. Again, higher risk, lower reward.

But these are just two examples that have gotten national attention. Tenure, job security and collective bargaining rights have been axed or weakened in many other states. There is, of course, Wisconsin, where teachers’ and other public employees’ bargaining rights were severely limited, while health and pension benefit contributions were increased (again, by the same piece of legislation). Bargaining was largely eliminated in Indiana several years ago – one result was a pay freeze in 2009 and 2010, along with higher health insurance payments (again, this is effectively a pay cut). Similar bills have also passed recently in states like Tennessee and Michigan, and we are sure to see more states, such as New Jersey, try to do the same.

I don’t know if the “higher risk, higher reward” model is a good idea for teachers – as always, it will probably depend on the design and implementation of the policies. But I do know that eroding job protections and rights without additional compensation, and especially with pay decreases, is unlikely to have anything but harmful effects on both current teachers as well as the supply of applicants. The fact that some people are presenting these bills as mechanisms for improving teacher quality suggests that they themselves may not completely understand the risks and rewards involved. 

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Matthew Di Carlo

Matthew Di Carlo is a senior fellow at the non-profit Albert Shanker Institute in Washington, D.C. His current research focuses mostly on education policy, but he is also interested in social stratification, work and occupations, and political attitudes/behavior. He also writes for the Institute...