Merit Pay Mania

I'm a day late to the merit pay roundabout between the American Prospect's Ezra Klein, the Atlantic's Matt Yglesias, and the New Republic's Jason Zengerle. But the points are still worth discussing, particularly Ezra's kick-off post, which begins thusly:

I'm always amused by well-paid journalists and pundits complaining that teacher's compensation isn't closely enough linked to performance. Is Megan [McArdle, like Matt an Atlantic blogger] hauled into [Atlantic Editor] James Bennet's office once a week, presented with updated traffic numbers where traffic boosts and drops are disaggregated from intra-Atlantic links and general noise, and then paid less or more depending on her performance? Of course not.

Ezra continues in this vein, writing a variation on a point that is often made by merit pay critics, which goes something like this:

"People are always saying teachers should be paid based on merit like other professionals. But other professionals aren't paid strictly or objectively on merit; they're paid based on all kinds of subjective and irrational bases, or they're paid for being more experienced and well-educated, just like teachers. You're faulting current teacher pay systems for falling short of a standard that doesn't actually exist."

This is true in the strictest sense, but it isn't a good argument against merit pay. The most damning critique of the standard teacher pay system is not that it falls short of some perfect, objective, rational ideal. It's that it fails to incorporate merit in any way whatsoever. More specifically, it precludes merit. Even if a school or district has all the evidence in the world that Teacher A is twice as good as Teacher B, data no reasonable person would dispute, and it has a strong, obvious interest in paying Teacher A more as a result--to recruit her, retain her, motivate her, whatever the reason may be--it may not boost her compensation.

This simply isn't true in most professional jobs. I've worked for five organizations since I left graduate school--two in the public sector, three non-profit--and in every case managers had discretion to pay their better employees more, either when hiring them or giving them raises. The quality of the process varied a lot, and that's important, but at least they had the option. Broadly speaking, I'm guessing this is true for nearly all professional occupations except for K-12 teachers.

This problem is compounded by the fact teachers are generally quite limited in availing themselves of de facto merit pay through professional advancement. Ezra and Matt both cite the supposedly non-meritorious nature of compensation for journalists, as well as the fact that "merit" itself in that field is hard to define. But the bottom line is that there's a clear hierarchy in journalism that is sensitive to merit and positively related to pay (this is Jason's point), particularly if you expand the field to include book-writing and editing. I'm guessing James Fallows has done okay for himself financially over the course of his career, because he's a really good journalist. Matt himself is another obvious example--if you graphed a blogging-related salary histogram of the all the bloggers in all the world, you'd see a flat line at $0 going straight across the page from left to right, until finally in the 99.99th percentile or so it would tick up into positive numbers, and include Matt, who gets paid to blog precisely because he's one of the best bloggers in the business.

The principle applies to other fields as well--you can move into management, or to a wealthier firm, one that's wealthy not because it happens to be in a wealthy area, which is why schools are (or are not) wealthy, but because it's better at what it does, and thus has more money to pay, not least because it hired and paid particularly meritorious people in the first place. Law firms, consultants, and accountants work this way. For most professionals, merit pay is a function of both individual merit in your job and your ability to get hired and paid by a meritorious organization.

K-12 teacher compensation, by contrast, is relatively flat and uniform--you can get close to poor as a teacher, but you can't get near rich. Opportunities for advancement and outside earnings are relatively few, and even then you still don't get paid that much extra. While the median salary for journalists and many other professions is modest, there's at least a high upside at the top, which has a big impact on incentives for the best and brightest to enter the profession. Nothing like that exists in teaching.

Other professions, moreover, have less objective systems for paying teachers because they naturally don't lend themselves to objectivity as well. By contrast, the main goal of teaching--improving student learning--is, in fact, measurable to a considerable (although certainly not perfect) degree of accuracy. We should evaluate the objectivity and precision of teacher pay systems against what is possible for that profession.

All of which is the longest possible prelude to saying kudos to the United Federation of Teachers and the management of New York City Schools for announcing a new merit pay plan yesterday. This is, as Eduwonk said, an important moment, coming from the cradle of teacher unionism and the nation's biggest school district. It's easy enough for people like me to harangue union leaders about merit pay, but a lot harder to hammer out agreements in real-world political settings that meet the needs and priorities of rank-and-file teachers. I hope it works well, and that the meritorious schools and teachers in New York get the additional pay they surely deserve.