Public school teachers started striking in Los Angeles this week. Educators in Los Angeles Unified — the second biggest school district in the United States — demand bigger paychecks and smaller class sizes. The teachers union claims that the state’s unregulated charter school growth is to blame. But basic economic theory — and the scientific evidence — suggests that public school teachers should instead be fighting to increase school choice. Here’s why.
Economists would argue that public school employers exercise strong “monopsony” power because public schools hold over 90 percent of the K‑12 market share. In other words, educators essentially have to accept the work environment, salary, and benefits offered by the traditional public school system if they want a K‑12 teaching job. The lack of competition in the education labor market is bad for teachers. Weak competition among the employers of educators means lower teacher salaries and bigger class sizes.
In fact, the most recent estimates suggest that there are at least 26 students in every class in LA Unified public schools, on average. Additionally, annual per pupil spending in LA Unified public schools is over $16,000 per student. In other words, conservative estimates suggest that well over $400,000 is allocated to each class each year. But teachers in LA Unified are only paid $75,000, on average.
The important question: where does the rest of the money go?
According to Kennesaw State University’s Dr. Benjamin Scafidi, increases in education expenditures are more likely to go towards administration and support staff than full‐time teachers. Between 1992 and 2014, Scafidi found that average U.S. public school teacher salaries fell by around 2 percent even though the amount of support staff increased by 36 percent. As Scafidi noted, if the increase in support staff instead kept on par with student enrollment growth over the same time period, every public teacher in the U.S. could have had a raise of over $11,000. That would be around a 15 percent raise for teachers in Los Angeles – over twice as large as the raise demanded by the teachers union. Perhaps public school teachers in LA should ask their employer — the district — why they’re only getting less than a fifth of the $400,000 of educational resources devoted to their classrooms.
But how can school choice help solve this problem?
The expansion of public charter schools gives educators more employment options and therefore increases competition in the teacher labor market. In a competitive teacher labor market, public, private, and charter schools must compete with each other to retain talent by offering higher salaries and better working conditions to teachers. Instead of allocating enormous amounts of dollars away from the most vital education resource — teachers — public school districts would have to reward great teachers if they wanted to keep them. After all, even if LA Unified only spent a quarter of their educational resources on teachers, educators would instead receive about $100,000 each year — a 33 percent increase above current average salaries. That’s over five times the 6.5 percent raise that the union wants.
And the scientific evidence overwhelmingly supports the theory that school choice is good for public school teachers. According to all five of the studies that exist on the topic, labor market competition introduced by public and private school choice increases salaries for teachers in traditional public schools. For example, a peer‐reviewed study published in the Journal of Public Economics finds that charter school competition increases teacher salaries by about 3.4 percent in difficult‐to‐staff public schools. None of the studies find negative effects of school choice competition on teacher salaries.
Teachers in Los Angeles have a right to be upset about big classes and low salaries. They deserve much more than what they are getting. But reducing charter school growth won’t make their employer — the district — spend education dollars wisely. On the contrary, increasing competition for teachers’ employers — by expanding access to school choice — would give school districts the incentive to give teachers what they’re worth.
I’m not surprised that teachers in Los Angeles are striking. But they should be striking for more school choice, not less.