Hawaii public teachers’ salaries misrepresented

This column was originally featured in the Honolulu Star-Advertiser on Wednesday, Oct. 17. This version includes the charts and footnotes.

A widely cited study issued last month by WalletHub erroneously stated that Hawaii public school teachers make a starting salary of only $24,409 when adjusted for cost of living, supposedly lowest in the nation.

In reality, Hawaii teachers make starting salaries that are $35,140 when adjusted for the cost of living, which is above the national average.

In response to a request for information from the Grassroot Institute of Hawaii, WalletHub said it assumed a cost-of-living index for Hawaii of 188.3. It attributed that number to a report by the Council for Community and Economic Research,[1] which catalogues cost-of-living indices of urban areas nationally.

This means that the WalletHub study adjusted statewide public school teacher salaries based on metropolitan areas, which is an apples-and-oranges comparison.

A more accurate way to calculate the cost of living is to use a statewide cost-of-living index. For example, the Bureau of Economic Analysis (BEA) pegged the cost of living index for all of Hawaii at 130.8.

Another problem is that the WalletHub study placed a heavy weight on housing costs of “professional and executive households in the top income quintile.”[2] It compared the cost in metropolitan areas of 4-bedroom, 2-bathroom homes on 8,000-square-foot lots,[3] which in Honolulu average $1.04 million,[4] but in Atlanta, Ga., for example, average only $290,041.[5]

Adjusting statewide teacher salaries for Hawaii’s high cost of living using only metro Honolulu prices is a methodological error, since the numbers imply a goal of attempting to bring teacher salaries in line with the prospect of buying a $1 million home, which is out of reach for most people in the state.

According to the National Education Association (NEA), and adjusting for the cost of living using the BEA index, the starting salary for Hawaii public school teachers in fiscal 2017 was $35,140, which was higher than the national average at $34,853.

Calculating teacher pay in fiscal 2017 without adjusting for the cost of living, licensed Hawaii public school teachers who worked 10 months a year had a starting salary of $45,963, the third-highest in the nation, behind only New Jersey at $51,179 and Alaska at $46,785, according to the NEA.

The average unadjusted salary for all Hawaii public school teachers in fiscal 2017 was $57,674, almost $10,000 more than the average private sector salary in the islands of $48,055[6] and higher than most other Hawaii state government workers, who averaged $37,561 in fiscal 2017.[7]

This year, in fiscal 2019, the unadjusted starting salary for licensed 10-month public school teachers in Hawaii rose to $48,428, according to their union contract,[8] and to $49,100 for teachers who worked an extra 21 hours. Ten-month teachers comprise the majority of teachers who work during the year; some of then can earn an extra stipend outside of the union contract if they teach during the summer

Licensed 12-month teachers in Hawaii this year have salaries that start at $58,113, or $58,781 with the extra 21 hours.[9] Twelve-month teachers are positions such as resource teachers or registrars who work at the school year-round.

In either case, Hawaii’s public school teachers clearly are better off than the WalletHub study suggests. This isn’t to say that good teachers should not receive more pay, but anyone endorsing higher pay for Hawaii’s public school teachers should at least use accurate statistics — especially if they are urging voters on Nov 6 to approve higher property taxes as the way to make that happen.

^[1] http://kedc.com/wp-content/uploads/2018/02/2017-Annual-Average-Index.pdf, page 8.

^[2] Ibid, page 3.

^[3] Ibid, page 5.

^[4] Ibid, page 25.

^[5] Ibid, page 25.

^[6] Grassroot Institute calculations using Bureau of Economic Analysis data for FY 2017, available at https://www.grassrootinstitute.org/wp-content/uploads/2018/10/Wage-data-by-state-FY-2017-2.pdf.

^[7] Grassroot Institute calculations, available at https://www.grassrootinstitute.org/wp-content/uploads/2018/10/Wage-data-by-state-FY-2017-2.pdf.

^[8] https://www.grassrootinstitute.org/wp-content/uploads/2018/09/HSTA-CBA-FINAL-2021.pdf, page 84.

^[9] Ibid, page 85.