The Tradeoff Between Teacher Wages and Layoffs to Meet Budget Cuts

Alex Klein

Marguerite Roza
Center on Reinventing Public Education, University of Washington
July 2009

If you want to avoid sharp increases in class size, you have to pick your poison when it comes to budget slashing, according to a hypothetical analysis done by Marguerite Roza. On average, the teacher pay schedule increases three percent per year of work; that's in addition to a three percent average annual cost of living increase. Together, this means the typical public-school teacher will make six percent more each year. But with district budgets squeezed by the economy, most districts cannot afford those increases without laying off teachers, too. So she runs the numbers through five scenarios, from maintaining the pay increases and the cost of living adjustments to rolling back salaries 5 percent and abandoning the 3 percent salary step increase. Keeping the salary scale as is will result in 17 percent class size increase and laying off 14 percent of the teacher work force. Freezing salaries completely (no step increase; no cost of living increase) still means 7 percent of the teacher work force must be laid off and class sizes will increase by a corresponding 8 percent. But abandoning the step scale all together and slashing salaries by 5 percent will keep both layoffs and class size increases at bay. All options are presented in a handy and easy-to-understand table. This analysis brings to the fore the debate over "last-hired, first-fired" policies and dishes out an unavoidable truth: You can't have it all when you're faced with a down economy--even if you're unionized.