Teacher pay is always a lively topic in North Carolina. The North Carolina Department of Public Instruction recently reported that the estimated average teacher salary in North Carolina for 2019-20 was $54,682, up slightly from last year’s average of $53,975. Had Gov. Cooper not vetoed the state budget, teachers would have received an increase of 3.9 percent over two years.
Much has been written about teacher pay in the last decade. However, one topic frequently missing from that discussion is teacher benefits. That’s a topic I’ve written about often in recent years (see here, here and here)
Table I provides a snapshot of the growth in the value of teacher benefits over the last decade.
Teachers receive health insurance, retirement benefits and social security as part of a benefits package. Table I is a snapshot of how the value of those benefits has changed since 2010.
What accounts for the growth in benefits over the past decade?
While social security benefits have remained constant (7.65 percent of total salary) the cost of health insurance and retirement benefits have not.
Over the last ten years health insurance per employee has increased from $4,527 in 2010 to $6,306 in 2020. The real story however is the increase in the percentage paid for employee retirement benefits. Since 2010, the percentage the state has paid per employee salary for retirement benefits has increased from 8.75% to 19.70% in 2020.
Such increases will change a lot. For example, in 2010, benefits as a percentage of average salary was approximately 25.9 percent. Ten years later, benefits as a percentage of average salary skyrocketed to 38.8 percent.
They will also increase the cost to the state. In 2010 , the cost of all educator employee benefits totaled $2.06 billion. In 2018-19(latest year available) that total increased to $3.14 billion. How much is $3.14 billion? In 2019-20, the state employed about 82,000 full-time teachers – about 88 percent of all teachers in North Carolina. The cost to the state? $3.47 billion.
The discussion over teacher pay is never-ending. Teachers like other professionals deserve a fair wage and benefits. However, the cost of benefits is significantly impacting the ability to pay teachers.
Want to improve teacher pay? Looking at teacher benefits might be the best place to start.