Commentary: A Teacher Shortage?

Changes in the unemployment rate and student enrollment levels affect the true supply and demand for teachers.

With Indiana’s unemployment rate back near pre-recession lows, we are sure to hear a lot about a labor shortage. For businesses, the issue is all about adjusting their business model. In government, the problem is not as clear because most public sector occupations have fewer well functioning labor markets. Here we should be very careful about judging claims of worker shortages and the brouhaha about teachers is a classic example.

From 2010 to 2014, total public and private school enrollment in Indiana declined 6.2 percent from 1.16 million to 1.047 million students. The loss of full-time school staff was about 12 percent, almost all of which occurred in 2010. Since 2011, the staff-to-student ratio actually increased. Moreover, during the last year as student enrollment dropped there were increases in almost all types of teachers. This was likely a consequence of improvements to the funding formula that previously penalized growing schools.

From 2013 to 2014, secondary teachers saw 12 percent growth, career and technical teachers saw 11 percent growth, special education for kindergartners saw 6 percent growth, and secondary special education and enrichment teachers saw growth of 20 percent and 18 percent respectively. Shockingly, education administrators saw a 10 percent increase in 2014, even as overall student enrollment declined. With fewer students, the demand for teachers statewide should drop, leaving an excess supply of teachers.

This is, of course, bad news for teachers colleges that claim their historic enrollment declines are a looming catastrophe for schools. Hogwash. Nationwide, only 59 percent of teacher college graduates currently working have jobs in education. With 15 percent of education school graduates currently working in office support, sales, agriculture and construction, there remains no shortage of folks with a teaching degree. The reports of shortages are mostly in fields better taught at colleges of science and liberal arts. Folks, we have an excess supply of teacher college graduates. That explains current enrollment declines.

So, are low salaries keeping teachers out of the classroom? Starting teachers and army lieutenants earn about the same annual salary. I’ll let the reader draw their own comparison of the rigors and hours of each job, but unlike soldiers, teachers in Indiana have seen their salaries stagnate in recent years. This surely offers less inducement into the profession. As I have previously argued, better teacher pay should be a policy goal for quality reasons, but it cannot be implicated in a widespread shortage.

No, the problem is that in Indiana, only about one-third of school corporations are growing. The rest see shrinking student enrollment, with one in five experiencing double digit declines since 2010. Almost all of this is due to falling local population or parents fleeing broken schools. In these places, hiring new teachers will be difficult. After all, who wants to enter a school system facing the inevitability of long-term cuts?

The truth is that there is more evidence of a teacher glut in Indiana than a shortage. But in shrinking schools, specious claims of shortages will be in endless supply.

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Michael Hicks

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Hicks earned doctoral and master’s degrees in economics from the University of Tennessee and a bachelor’s degree in economics from Virginia Military Institute. He has authored two books and more than 60 scholarly works focusing on state and local public policy, including tax and expenditure policy and the impact of Wal-Mart on local economies.