In my 2011 book, Launching the Innovation RenaissanceI wrote:
Sometimes teacher pay in the United States resembles that of Soviet-era Russia more than that of 21st-century America. Teacher salaries are low, egalitarian and not performance-based. We pay physical education teachers about the same as math teachers, even though math teachers have better opportunities elsewhere in the economy. As a result, we have many excellent physical education teachers, but not enough excellent mathematics teachers. Teachers unions oppose even the most modest proposals to add teacher quality measures to selection and compensation decisions.
However, as I have written, Wisconsin passed Act 10, a bill that ends collective bargaining over teacher salary scales. Act 10 took power away from unions and gave districts full autonomy to negotiate salaries with individual teachers. In an article which has just won the prize for the best article published in the AEJ: Politics of the last three years, Barbara Biasi studies the effect of Law 10 on salaries, effort and student success.
Pay for most American public school teachers is rigid and based solely on seniority. This article explores the effects of a reform that gave Wisconsin school districts full autonomy to redesign teacher pay systems. Following the reform, some districts moved to flexible pay. Using the expiration of pre-existing collective agreements as a source of exogenous variation in the timing of pay changes, I show that the introduction of flexible pay increased the salaries of high-quality teachers, improved teacher quality (in due to the arrival of high quality teachers). (teachers from other districts and increased efforts) and improved student achievement.
We still have a long way to go, but COVID, homeschooling, and universal voucher programs have significantly dented the power of teachers unions. It is now possible to introduce teacher remuneration into the American model. Moreover, such a model is pro-teacher! Not all Wisconsin districts have seized the opportunity to reform teacher pay, but those that have raised pay considerably. The Appleton district, for example, has instituted pay for performance, but Oshkosh has not. Before the law, salaries were roughly the same in the two districts:
After CBAs expire, the same teacher could earn up to $68,000 in Appleton, and only between $39,000 and $43,000 in Oshkosh.
Thus, pay for performance is a win-win policy. Paying the best teachers more is a good thing for teachers and for students who see their results increase, which translates many years later into higher salaries.
Hat tip: Josh Goodman on Twitter who will surely agree on the negative effect of egalitarian remuneration on the relative quality of mathematics teachers.
