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Letter to the Editor: A $235,000 Bonus for a Master’s Degree?

On salary increases for teachers who acquire a master's degree.

The following letter to the editor was written in response to the story, .

I would like to address the practice of giving salary increases to teachers who acquire a master’s degree.  Now, studies show that additional education on the part of the teacher does not produce any improvement in student test scores.

In other words, students of teachers without a master’s do just as well as students of teachers who do have a master’s degree.  However, a study should not really be necessary.  It is just common sense that someone who has four years of high school and four years of college should have enough education to teach arithmetic to a ten-year-old. 

Further, it is an open secret that getting a Master’s Degree in Education is not exactly (ahem) difficult.  In some cases it takes little more than $10,000, a few weekends, and an open-book test. Even further, overall student test scores continue to decline though more and more teachers acquire master’s degrees.

Calculations follow – using the assumptions of a 6% average salary increase for teachers, a $10,000 salary increase for a master’s degree,  pensions increasing at 3% per year, a 75% of final salary pension payout, a 5% discount factor for the cost of money, and a life expectancy of 84 years.  All of these assumptions are variable, but they are all “in the ballpark”.

Based upon these assumptions, the calculations that follow show that a $10,000 salary increase to a teacher for acquiring a master’s degree is equivalent to the following:

To a 50 year old teacher: “Now that you have a master’s degree, the School Board will give you a one-time bonus of $168,938 of taxpayer money even though neither the taxpayers nor the students will receive anything in return.”

To a 40 year old teacher: “Now that you have a master’s degree, the School Board will give you a one-time bonus of $235,411 of taxpayer money even though neither the taxpayers nor the students will receive anything in return.”

To the 30 year old teacher: “Now that you have a master’s degree, the School Board will give you a one-time bonus of $289,314 of taxpayer money even though neither the taxpayers nor the students will receive anything in return.”

There are a number of taxpayers who are willing to pay taxes for the education of students. There are a number of taxpayers who are willing to pay taxes so that students can enjoy a wide range of extra-curricular activities in order to broaden their educational experience.  There are few taxpayers who are willing to pay taxes so that a School Board can throw it away. 

Many would consider this type of boondoggle to be a gross breach of fiduciary duty on the part of the School Board –a duty that they owe to the taxpayers and the students.  I hope that School Boards everywhere will immediately stop this ridiculous practice in accordance with the stated goal of  “the development of sound business practices which ensure that every dollar spent produces maximum benefits”.

Master’s at age 50

$10,000 increase for 10 years with 6% raises = $131,808 in additional payments by age 60

$10,000 becomes $17,908 at retirement (6% raises for 10 years compounded)

75% of $17,908 = $13,431 pension increase

At 3% annual pension increases, 24 years = $462,394 in additional pension payments by age 84

$462,394 discounted at 5% for 34 years back to age 50 = $88,019

$131,808 discounted at 5% for 10 years back to age 50 = $80,919

Total present value at age 50 = $168,938                                                       

Master’s at age 40

$10,000 increase for 20 years with 6% raises = $367,856 in additional payments by age 60

$10,000 becomes $32,071 at retirement (6% raises for 20 years compounded)

75% of $32,071 = $24,053 pension increase

At 3% annual pension increases, 24 years = $828,078 in additional payments by age 84

$828,078 discounted at 5% for 44 years back to age 40 =  $96,770

$367,856 discounted at 5% for 20 years back to age 40 =  $138,641

Total present value at age 40 = $235,411                                                      

Masters at age 30

$10,000 increase for 30 years with 6% raises = $790,582 in additional payments by age 60

$10,000 becomes $57,435 at retirement (6% raises for 30 years compounded)

75% of $57,435 = $43,076 pension increase

At 3% annual pension increases, 24 years = $1,482,955 in additional payments by age 84

$1,482,955 discounted at 5% for 54 years back to age 30 = $106,391

$790,582 discounted at 5% for 30 years back to age 30 =     $182,923

Total present value at age 30 = $289,314              

—John Sullivan, brother of resident                                     

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Bailey April 03, 2012 at 03:04 PM
Hmm. I never really pondered this issue, but it is thought provoking. I wasn't aware of this situation and I am not aware of this kind of salary structuring in any other business. A competant accountant with 10 degrees earns the same as one with 1 degree in my firm. More like equal work=equal pay. Length of service really doesn't play a significant role either. In fact, most businesses are mindful of the equal work-equal pay scale lest there be a discrimation lawsuit. I know enrepreneurs with only a high school education that are very successful and brilliant. I also know individuals with multiple degrees that don't have the sense to pull their hand out of a fire. Most working people take extra classes to insure they will keep their job or to enhance their resume. And, they pay for it themselves. To expect extra pay for it would not even cross their mind. Common sense dictates that remuneration be based on PERFORMANCE. Every taxpayer in agreement needs to voice that to their school boards and legislators!
John Sullivan April 03, 2012 at 03:44 PM
I know. This is just one giant BOONDOGGLE. Can you imagine how many people, who make much less than teachers do, have to pay for this giveaway? "More money for education" is simply "more money for teachers" and nothing for students.
Bailey April 03, 2012 at 09:30 PM
I just had to check this out with a retired teacher I know. She was a teacher for decades, got her master's , worked ONE MORE YEAR with what she characterized as a "substantial raise in pay". Then retired and this sustantial raise translated into a substantially higher pension for the rest of her life- she retired at 58. She had no real reason to obtain a master's degree at the age of 56 or 57 other than to bump up her pension amount. WHAT STUDENT BENEFITTED FROM THAT??? As a taxpayer I feel like I have been hit over the head and robbed.
Marie grygienc April 04, 2012 at 05:27 PM
I don't know of ANY reputable school where you can get a Master's degree in ANY field for under $25,000 plus 2 years plus of classes, research, internships, clinicals, group projects, 10-15 papers per class, a thesis And tons of reading. This article is an affront to anyone of us who has worked hard for a Master's in any field. This portion of the article is misleading and therefore I question the validity of the rest of his "facts".
Bailey April 05, 2012 at 02:21 PM
I don't are what a Master's degree costs - I do care that as a taxpayer it costing ME alot of money in increased salary and pension benefits and it didn't enhance my children's education one bit. Does anyone know if teachers are reimbursed for tuition in part or entirely?
Polymath April 06, 2012 at 06:33 PM
Hey John, since you're pulling "facts" from your keister, where are the "studies"? Common sense would tell you if you're going to go spouting off about "studies show" that you could actually back up those statements with the information suggested. Also, if you want to bitch about salaries, why not look at some of the six figure administrators salaries? Like District Superintendent's getting paid $200k a year with under 15 years of teaching exp(fact). Instead you're going to cry about a teacher that works for 27 years to get paid 90k a year(fact) and gets a pension? I guess your "facts" don't include that most teachers come out of college with debt, get a crappy starting salary under 30k per year and have to work an additional 12 years or more just to break 60k per year. Those are facts my friend. I'm glad you said "assumptions" because that's all I see here. 10k for a masters.. HA! Fool
R Dewing April 07, 2012 at 04:50 AM
I remember hearing the story of a person who was stationed in Europe during WWII. He heard accounts of a battle from the BBC and the Nazis. The reports were always completetly differnt as to the 'facts'. He decided "the truth was somewhere in the middle". Same here.. lots of "facts", but the treuth is somewhere in the middle.
Dr. Henry Banaca April 07, 2012 at 12:04 PM
John I've read studies also and they do not agree with your studies. Actually, teachers are not only constantly educating themselves through masters' programs but also through teacher institute days. A motivated employee is a better employee. I wonder what John does for a living!
Susann DuBoff April 10, 2012 at 03:45 AM
Dr. Banaca-you did not name your studies-below studies not attributed to John Sullivan; they conclude their is no educational gain to a student taught by a Master's degreed teacher-which, you should be able to understand, means no gain for the taxpayer: Goldhaber and Brewer 1998, Eberts and Stone 1984, Keisling 1984, Rowan, Correnti, and Miller 2002, Aos, Miller, & Pennucci, 2007, Summers &Wolfe, 1977; Link &Ratledge, 1979; Murnane & Phillips, 1981; Harnisch, 1987; Monk, 1994. Clotfelter, Ladd, and Vigdor 2007a., Ehrenberg & Brewer, 1994, Murnane 1975, Rice, 2003, Murnane, 1975; Murnane & Phillips, 1981; Ferguson, 1991; Ferguson & Ladd, 1996;Greenwald, Hedges, & Laine, 1996; Hanushek, Kain, & Rivkin, 1998; Grissmer, Flanagan, Kawata, & Williamson, 2000; Rivers & Sanders, 2002; Rowan et al., 2002; Wayne & Youngs, 2003; Nye, Konstantopoulos, & Hedges, 2004; Hanushek & Rivkin, 2004; Hanushek, Kain,O’Brien, & Rivkin, 2005; Kane, Rockoff, & Staiger, 2006; Gordon, Kane, & Staiger, 2006;Harris & Sass, 2007; Clotfelter, Ladd, & Vigdor, 2006. http://cecr.ed.gov/guides/researchSyntheses/Research%20Synthesis_Q%20A2.pdf
Danni April 10, 2012 at 03:53 AM
motivated to do what? Keep their job? threaten a strike? get a raise for 15 hours of online studying?
John Sullivan April 10, 2012 at 12:53 PM
Marie, you are talking about a "real" masters. I have one myself and many teachers do as well. However, it does not have to come from a "reputable" school. It only has to qualify for credit and therefore salary increases. There is an entire industry geared to providing "education" at a pretty high cost ($10-12,000 for a masters) but with minimal effort. Many government workers also benefit from this industry.
John Sullivan April 10, 2012 at 01:03 PM
I'm sure you are aware that there are administrators in the north suburbs of Chicago that make $400,000 per year with $300,000 pensions. However, teacher salaries drive up administrator salaries, so administrators love it when the union gets raises. When a driver's ed teacher makes $190,000 per year, his boss has to make more. The teacher who starts at $30,000 gets more than $15,000 in benefits, works 8 months a year, and someone has to contribute about $40,000 per year for 38 years to fund the pension, which, by the way, at a 6% salary increase per year, would be $205,971 per year with a 3% raise every year at age 60. I know of no jobs in the private sector to compare to this. Also, I know of no teachers who start at under $30,000 per year. Nowadays, $40,000 is more like it.
John Sullivan April 10, 2012 at 03:20 PM
Teacher institute days are paid days in lieu of teaching. Teachers are constantly educating themselves if they are smart. Each step involves a "lane" change that brings an automatic raise that subsequent raises are applied to and 75% of the raises will go into the pension amount, which also gets a 3% raise every year in retirement. That is how a mid-career masters degree can be worth $250,000 on the date that the masters is acquired. While I realize that many masters degrees take considerable work, the teacher gets the same raise from a masters that can be acquired from a few weekends, $11,000, and an online test.
R Brogan April 15, 2012 at 01:23 AM
Hmmm. According to us census data a person with a masters degree is likely to earn $400,000 more during the course of their lives... So according to your math teachers are being UNDERPAID by $165,000. Oh and theses are facts, not an unsubstantiated "studies show" argument that people throw around to prove their point. http://www.census.gov/prod/2002pubs/p23-210.pdf How much is higher education worth in cold hard money? A college master's degree is worth $1.3 million more in lifetime earnings than a high school diploma, according to a recent report from the U.S. Census Bureau. Thanks again for proving that teachers are underpaid and under appreciated.
Danni April 15, 2012 at 05:36 PM
Brogan-full of the chat-10 year old study
John Sullivan April 16, 2012 at 01:35 PM
In the private sector, employees get compensated when they provide value-masters or not. In the public sector, employees get paid for a masters-whether it adds value or not. Even aside from studies, it does not make intrinsic sense that a teacher who has a high school diploma and a college degree needs a masters to teach to a ten-year-old. I think you are confusing cause and effect.
Bailey April 16, 2012 at 02:19 PM
Really- shouldn't compensation be based on PERFORMANCE AND RESULTS? I am aquainted with teachers and the only reason they take a class is to move over a lane and earn more money. They know it translates to higher pension. I know one teacher that acquired a master's one year prior to retiring to bump up the pension. Do you want your children and grandchildren taxed to pay for that kind of abuse? While census reports show that a person with a master's earns more, I would think those numbers are based on 12 month employees that work until about age 65-- not 8 month employees that retire much earlier. It is not a teacher phenomenom to come out of college in debt, get a unimpressive starting salary and work many years to reach 60k. It is common- for employees working 12 MONTHS A YEAR. Teachers should be fairly compensated- based on an 8-9 month job and based on performance and results. Teacher salaries are a matter of public record and available online. Base your opinion on those facts.
John Parker March 10, 2013 at 09:51 PM
It seems to me that the teacher supported union is doing to us locally the same thing the Auto Union did to Detroit. Guy, please do me a favor and pass this youtube clip to everyone you know. We need to get a ground swell going to try and bring D-211 back to reality. http://www.youtube.com/watch?v=qG5oBYiUqrc
John Parker March 15, 2013 at 10:42 PM
Local School Boards earned their share of the blame in this mess. http://www.youtube.com/watch?v=qG5oBYiUqrc http://www.youtube.com/watch?v=A_OSJOCGcW4 http://www.youtube.com/watch?v=y49qYv6KhEg http://www.youtube.com/watch?v=y9SWJBDd68Y

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