Factoring in cost of living, Alaska teacher salaries not competitive compared to national average, UAA study finds

Teacher salaries in Alaska are not competitive when compared to much of the Lower 48, according to new research from the University of Alaska Anchorage’s Institute of Social and Economic Research.

Alaska teachers are paid below the national average once their salaries adjusted for the high cost of living in Alaska, said Matthew Berman, a professor of economics at UAA and one of two authors of the study published last month.

The topic of public school funding and teacher pay has been a main focus in the Alaska Legislature this session and of local school boards statewide. Last week, Alaska Gov. Mike Dunleavy vetoed an education package that overwhelmingly passed in the Legislature and would have provided the largest nominal schools funding increase in Alaska’s history. The governor said he vetoed the bill because it did not include some of his priorities, including teacher bonuses and provisions for charter schools. A vote to override the veto failed 39-20, just one vote short of the 40-legislator threshold.

The study was published at a moment when Alaska school districts are profoundly struggling to find and keep qualified teachers.

Many education advocates, superintendents and school board members say flat state education funding and a lack of a defined benefit retirement system have made it difficult to offer higher wages and better benefits that could keep teachers.

Berman and Dayna DeFeo, director of the university’s Center for Alaska Education Policy Research, noted in the study that this is a not a new problem: When cost of living differences are taken into account, Alaska teacher salaries have been, on average, below the the national average for decades.

[With hope fading for additional state education funding, Alaska’s rural school districts prepare to make difficult cuts]

What’s new is that in recent years, teacher salaries nationwide have not kept pace with inflation, contributing to a national shortage of teachers, Berman said. That is making it even more difficult for Alaska schools to stay competitive and fill open positions.

While Dunleavy and lawmakers indicated this month there was still a chance that Alaska school districts could see a financial boost to public education before the end of the fiscal year, it wasn’t clear how, when or how much money districts could expect. Alaska lawmakers said this week they saw no clear path to a new education spending bill.

Without the promise of additional state funding this year, some districts face further financial uncertainty.

Funding and hiring challenges appear to be especially acute in rural communities off the road system, where districts also face higher operating costs, fewer housing options and a harsher climate, the study found.

Higher operating in those districts and the higher cost of living means salaries need to be even higher to attract qualified teachers, the study said.

“If Alaska wishes to attract and retain educators who are well qualified for teaching, it needs to make investments in teacher pay,” Berman and DeFeo wrote.

The study is, in part, a response to a 2023 report by the Alaska Department of Labor and Workforce Development that examined teacher wages in the state since the 1980s, Berman said.

That report showed a shrinking gap between how much Alaska teachers made compared to the Lower 48, but still placed Alaska 10th in the nation for highest teacher pay — at about 11% higher than the national average. Dunleavy administration staff in October pulled the article as a cover story in Alaska Economic Trends. It was later published in December with a different headline, and not as a cover story.

However, when Berman and DeFeo adjusted those numbers to account for Alaska’s high cost of living, they found that Alaska teachers actually make an average of 25% less than their Lower 48 peers.

In urban areas, that differential is smaller, Berman said — Anchorage teachers would need raises between 5% and 6% for the district to be nationally competitive. Rural teachers would need closer to 25%.

“A gallon of milk costs more in Anchorage than it does in Albuquerque. And it costs more in Nome than it does in Anchorage,” the authors wrote in the study, explaining the importance of paying attention to cost of living when looking at differences in salaries between places.

Berman and DeFeo also noted that while Alaska’s teachers have historically earned more than Lower 48 teachers, that gap has narrowed over the past two decades at a time when much of the country is grappling with a teacher shortage.

Nationwide, fewer people are choosing careers in teaching; the profession is experiencing higher turnover rates, which means Alaska will need to offer even higher salaries to recruit and retain teachers, the authors wrote.

In a 2021 survey conducted by the Alaska Department of Education and Early Development, fair compensation was the No. 1 factor Alaska teachers considered in deciding whether to leave or accept a job.

Dunleavy acknowledged that survey in a press conference Friday where he announced that he would be vetoing the education bill. He said a $58 million teacher bonus plan would have been a way to test if temporary income boosts help with teacher retention.

The ISER study findings track with what Corey Aist, president of Anchorage’s teacher union, has seen and heard from local educators.

“I think what’s important to note is how much more Alaska educators can make outside of the state,” he said, adding that he knows of a teacher who recently left the Anchorage School District to work as a teacher in the Seattle area, where she was offered a $30,000 pay increase and a pension.

“Pay increase and pension: It’s those two things in union that are really compelling our teachers to leave,” Aist said.

“Everyone’s looking at greener pastures,” he said.