Q&A: Why schools have more money, but teachers aren’t making more

There’s been a puzzling trend over the last few decades: Adjusted for inflation, school funding has increased substantially, but teacher salaries have not. In recent years, real teacher pay has actually dipped as inflation surged.

Pay matters for every profession, including teaching, for obvious reasons. It shapes who enters and stays in the work. Talented people might not consider teaching or might leave after a few years because they’re not happy with their salary.

Teachers have never been paid especially well, but the pay gap between teaching and other college-educated professionals has grown in recent decades. And now there’s a new challenge: Many other white-collar jobs offer remote work perks that aren’t available to educators. 

Meanwhile, more teachers have left the classroom in recent years and fewer young people aspire to become teachers.

So why has teacher pay been stagnant? Again, it’s not because school budgets have been flat. Rather, as school districts have gotten more money, they’ve used it for other matters, including hiring more staff. Schools have brought on new people for a variety of reasons: to serve a growing number of students with disabilities, to address demands for more security, to lower class sizes. (More money has also gone toward non-salary benefits, like health insurance and retirement, for teachers and other staff.)

This “staffing surge” may have been valuable, but a number of policy analysts have raised pointed questions about whether dollars could have been better used elsewhere. One of them is Aaron Garth Smith, director of education reform at the Reason Foundation, a libertarian-leaning think tank. In a recent piece for Education Next, Smith dug into school staffing data in helpful detail.

I recently spoke with Smith to understand how schools are using their money and how strong the case is that they should spend it differently. 

Our conversation has been edited for length and clarity.

Tell me what you found about how American public schools have spent their increased resources?

In the last couple of decades [between 2002 and 2023], enrollment is up by about 4% but staffing went up by about 15%. One of the drivers of that is non-teaching staff. It's not central office staff that's driving this growth. It's primarily school-level staff, in particular instructional aides and student support staff, including positions such as social workers, psychologists, audiologists, and several other categories of positions. I estimate that about 40% of the overall staff growth can be attributed to special education. The two main [special education] categories where we see growth are autism and ADHD. 

What else do you think is driving staffing growth?

There could be a lot of reasons. You could point to things like testing and accountability post-NCLB. And technology, of course. You need more tech staff in the central office and in schools. Security can't be overlooked. Another one is the whole-child model of K-12 education, which includes community schools.

I've made the argument this staffing surge is probably fiscally sustainable because a growing economy can bring in more tax revenue without raising tax rates. What do you think? 

The question is what is the appetite for state legislatures to continue investing money in public schools while enrollment is falling. I had a legislator from a very red state tell me last week that even though enrollment is declining for various reasons, it would be political suicide to decrease appropriations. But I think it's going to vary by state. Some will maintain or even increase appropriations, while others will allow funding to track closer to enrollment.

What do you make of this increased staffing? Is this a positive trend, a concerning trend, or somewhere in between? 

My instinct is that this is probably not the best use of funds. The strongest indicator of that would be teacher salaries. Despite the fact that inflation-adjusted per-student spending has increased by 36% [in the last two decades], teacher salaries have fallen. 

What makes you say that's a better investment than all the other things you could spend scarce resources on?

Because teachers are the most important in-school factor for student learning. That's not saying that school counselors aren't valuable. But you only have a finite number of dollars to spend, and that money is not making its way to teacher paychecks. That seems pretty alarming to me. 

I wonder if school district leaders might think, "Oh, yeah, we have new money. We're putting a chunk of it toward teacher salary,” but actually, that is just keeping up with the inflation treadmill.  

That explanation makes sense.

You offer a degree of skepticism about community school programs [which try to address challenges students face outside of school]. Why?

I'm not saying that they don't provide any value. I think the point is more of: Is this the best use of scarce resources and time? There are studies showing that they add value in several ways, but as far as I can tell, the evidence base seems a little thin compared to what's being invested. 

Anything else you want to add? 

I talk about the importance of increasing teacher salaries, but I think the real value isn't just in accepting the status quo and paying teachers more based on years of experience and educational attainment. You need structural changes to accompany new investments in teacher salaries. There are some interesting examples out there with states like Texas trying to find ways not just to boost teacher salaries but to do so in a way that focuses on attracting and retaining the best talent.

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