Are Teacher Salaries Held Back by “Bloat” in K-12 Schools?

In the past 20 years in the US, per pupil spending in K-12 schools has increased by about 20%. That’s in CPI-U inflation-adjusted dollars. What’s the cause of this increase? Higher teacher salaries? Administrative bloat? Something else?

Here’s a chart you may have seen floating around the internet. It shows the growth in the number of employees at K-12 public schools.

This looks like a lot of administrative bloat! The source of the data is the National Center for Education Statistic’s Digest of Education Statistics, Table 213.10.

But hold on, here’s another chart, showing the percent of employees in each of these same categories.

The numbers don’t add up to 100% because I’ve left off a few categories (the biggest one is “support staff,” which was 30-31% of the total throughout the time period). But overall, this chart appears to show much less bloat. Instructional staff (including aides) were by far the biggest category of employees in both categories in both time periods. Administrative staff at the district level did grow, but only by 1 percentage point of the total.

What’s the source of this data? Well, it’s a little trick I played. The source is the National Center for Education Statistic’s Digest of Education Statistics, Table 213.10. It’s the exact same data.

How is this possible?

The number of “administrators” grew so much because it was so small to begin with. There is functionally no way that the number of instructional staff (both teachers and aides) could have grown as fast as the number of admins, without a massive increase in educational spending. Like, really massive. This is a version of what we call the “base rate fallacy” (although that’s not the exactly right, since we are dealing with a base “rate,” just growth from a small base).

And those “administrators” are not really what we would typically think of when we hear that word, pencil-pushing bureaucrats at the school district office. The number of “officials and administrators” only grew from about 58,000 to 78,000. That’s only 20,000 more administrators for the entire country. Maybe that’s too many, but it’s still too small to effect the overall picture (though certainly it could matter in individual districts). Most of the “administrator” growth was in instructional coordinators, who according to BLS “oversee school curriculums and teaching standards” and “develop instructional material, implement it, and assess its effectiveness.” They jumped from under 40,000 to over 100,000 from 2000 to 2019. Are these jobs unnecessary bloat? I’m not sure, but it’s what comes to my mind when I hear “administrators.”

So what’s the bottom line? The bottom line on money? For that, here’s one more table. It shows the change in per pupil, inflation adjusted spending (averaged across the US). The data isn’t available for 2019 yet, so I used 2018, and it is also from the NCES Digest.

Per student spending in inflation-adjusted dollars increased by $2,739. Over half of that was spending on instruction. Only about 7% of the increase is from spending on administration — maybe that’s too much, but it’s a very different picture than the first chart I showed!

But one puzzle remains. Average teacher salaries haven’t actually increased over this time period! They’ve been flat at about $65,000 in both 2000 and 2018 (inflation adjusted). What gives?

First of all, it’s important to recognize that even if you had spent all of the increase in admin costs on instruction, that would only be about $185 per pupil, which works out to about $3,000 per teacher (given current teacher/pupil ratios). $3,000 isn’t nothing! But again, it’s not the kind of numbers you would expect given the first chart in this post.

Still, it appears that salaries should have gone up to some extent, since “instruction” spending went up over 20%. And teacher/pupil ratios didn’t change from 2000 to 2018 either.

The answer? Benefits. Of the $1,457 increase in instruction spending, two-thirds of it ($975) goes to higher benefit costs. Just $172 went to higher salaries (these are all inflation adjusted). Some of these benefits package costs might be controlled by school districts, such as contributions to retirement plans, but I suspect much of it is rising health insurance costs, which are largely outside of the control of individual districts.

The increase in benefits costs (per pupil, inflation adjusted) is so large that’s it’s roughly as big as all the other categories combined in my table above, with the exception of student support and the other instruction expenses.

What’s the bottom line? Inflation-adjusted teacher salaries have been flat for a long time. But that’s not primarily because we have dramatically increased spending on administration (even though the number of admin people has increased). But also, we do actually spend a lot more on teachers. It’s just not their salaries. It’s their benefit package.

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