The labor market for teachers in North Carolina

Consider this teacher in North Carolina, who seeks a raise via moral suasion.

If we suppose that her husband makes as much as she does, so that they have a household income of $62,000, that puts them in the 62nd percentile of the US household income distribution and the 96th percentile of the world income distribution, according to this calculator. Even if we suppose that her husband makes only $20,000 per year (2000 hours at $10 per hour), which seems unlikely given positive sorting in the marriage market on education and income, the percentiles are 57 and 95.

There are several issues here, more than one can address in a single post. But one important one often negotiated in discussions of teacher pay is compensating differences. Many people like to teach. That drives teaching wages down, as implicitly part of the compensation is doing a job that one wants to do, and receives praise for doing from others, rather than, say, selling used cars. Teachers should make less in dollar terms than other jobs that require the same skills / investments but lack the non-pecuniary payoff. Formally, the margin teacher should be indifferent not between the money wages of their two best labor market options, but the utility levels associated with their two best options. Also, teachers in government schools, once they have taught for a while, essentially face zero employment risk. The labor market should (and likely does) price this aspect of the job as well, and it too will lead to lower teacher money pay.

I hope she finds a teaching job she likes better in another state.

Hat tip: ASAK