Michigan K-12: Below Average Income, Above Average Costs?

Can Michigan, a poorer-than-average state, continue to support teachers that are paid more than average? The debate continues...

Julie Mack of the Kalamazoo Gazette blogged this morning that she was unable to find the underlying data regarding average teacher salaries produced by the American Legislative Exchange Council and cited in my blog post last week. (Mack called it a "quibble," but we take even quibbles seriously.) ALEC reports a difference of $11,889 per teacher between Michigan and the national average for 2006-07. Mack cites several other sources, each showing a smaller difference, but all showing Michigan is well above the average, ranging from a low of $3,788 per teacher above the national average (National Education Association claiming 2007-08 data) to $5,713 above average (U.S. Census report from April claiming 2006 data).

After a call from Mack, I checked with Andy LeFevre, the author of the ALEC report, regarding how he compiled his information. Unfortunately, he was not available today, but I will provide his answer as soon as it is available. It is possible that the U.S. Department of Education has numerous ways to present this data: Mack also found a figure for the same year (2006-07) that showed Michigan at $4,876 above average.

I'd like to thank Mack for bringing all this up, and I look forward to seeing LeFevre's numbers. There are obviously many different ways to measure this data. However, while some figures show a smaller gap between Michigan and the average salary, the difference is still significant, and supports the underlying points in my original post:

1. Michigan pays a lot more for the same service (namely, public school teachers) than other states do.

2. The difference between what Michigan pays above the average for teachers is more than the proposed 3 percent reduction in the School Aid Fund budget. Even taking the smallest difference of the numbers that Mack discovered — $3,788 per teacher — and multiplying by roughly 100,000 public school teachers in Michigan, you get a figure of $378 million. The proposed 3 percent reduction in the SAF budget that led to the government shutdown last week is about $32 million less than that.

And, of course, this is just factoring in teacher salaries. There are also big savings to be achieved by privatizing non-instructional services, creating a more economically rational benefit structure, and much more.

Mack also notes that the Census data shows that over the last several years, Michigan's teachers are not increasing their salaries at the same pace as the national average. Indeed, it would be quite surprising if they were, considering that the entire state has been getting poorer compared to the national average.

Consider the U.S. Census Bureau's ranking of Personal Income Per Capita in Current Dollars, 2007, which was updated on April 6, 2009 - the same day as the "Public Elementary and Secondary School Teachers' Average Salaries, 2006" that Mack cited.

Per-capita personal income is a broad measure of how much is being earned in the state per resident and is thus a good indicator of how well a state can support various public services. Michigan is ranked 26th for 2007, at $35,086. This is $3,525 lower than the national average. Yet for teacher salaries, the Census data for 2006 shows Michigan at seventh highest, $5,713 per teacher above the national average.

So, using just the Census data, how does Michigan stack up as a poorer-than-average state supporting teachers who are paid at a higher-than-average rate?

U.S. teachers in all states for 2007 were paid, on average, $10,415 above the 2006 per-capita personal income of the nation: a 27 percent difference. This is understandable, as the PCPI divides total income by every man, woman and child in the state — not all of whom are working — whereas the teacher pay is just for a single worker in a single profession. Again, remember that per-capita income is a measure of how well the state can afford to pay for its teacher salaries.

For Michigan, teachers are paid, on average, $19,653 above the per-capita income of the state - 56 percent higher. This is the largest gap for any state in the nation. The next closest is Illinois, more than $1,200 behind Michigan, paying the average teacher just 45.5 percent above the Illinois PCPI.

Finally (and just to demonstrate the wide variety of government data out there that appears to present the same information in different ways), I selected the PCPI Census data above because it is presented in the same format as the Census data for teachers that Mack used and was updated on the same date (April 9, 2009). But you can get more up-to-date figures and other data (albeit in a much different presentation) from the U.S. Department of Commerce's Bureau of Economic Analysis here.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.