While the average pay for teachers in Michigan has declined for several years, using a ratio of teacher pay relative to personal income to standardize across states shows that Michigan teachers are the highest paid in the nation in relative terms.

Recent media reporting highlighted the fact that average teacher pay in Michigan declined for the fifth straight year in 2015-16. Despite this recent pullback, public school teachers are among the highest paid in the country according to the latest data from the National Education Association (NEA). With an estimated average annual salary of $63,878, Michigan teachers earned 110 percent of the national average salary ($58,064), placing Michigan just outside of the top-10 highest salary states at 11th. However, when Michigan’s average teacher salary is scaled against state personal income, Michigan teachers have the highest salaries in the nation. Continuing a trend dating back 20 years.

Following the implementation of Proposal A of 1994, Michigan’s comprehensive school finance reforms, the Citizens Research Council published a brief examining public school teacher pay. At the time, the Research Council reported that for the 1995-96 school year, the average public school teacher earned $49,168, ranking Michigan 3rd highest in the country. We noted that while Michigan’s average was high in absolute terms, such rankings can be misleading as they ignore the fact that teacher labor markets are predominately local in nature. Teacher supply and demand forces are determined at the state and local district level. New teachers generally seek employment within the state they attended school.

Comparing the average teacher salary to the economic base of each state provides the opportunity to examine salaries across states. This effectively takes into account a key aspect of disparate teacher labor markets (i.e., citizens’ ability to pay for public services). It should be noted, however, that per capita personal income is simply total state personal income divided by the total population, which is not equivalent to average earnings.

To allow for a more accurate comparison, the Citizens Research Council scaled the NEA teacher salary estimates for each state against each state’s per capita personal income. By dividing each state’s average teacher salary by its per capita personal income for the most recent year, the Research Council created a simple ratio. Thus, allowing for a more accurate cross-state comparison.

In 1996, this calculation pushed Michigan’s average teacher salary from 3rd highest in absolute terms to first highest in relative terms across all 50 states and the District of Columbia. Adjusted for personal income, Michigan’s average teacher earned 30 percent more than the average U.S. teacher.

We revisited the same calculation using the 2015-16 average teacher salary and 2015 personal income data. The salary and personal income data for each state and the U.S. average, along with each state’s computed ratio, are presented in the table below.

2015-16 Average Teacher Pay/Per Capita Personal Income Ratio

Michigan’s 2015-16 average teacher salary ($63,878) positions the state as 11th highest nationally; however, after adjusting for each state’s economic base, Michigan jumps to the highest average teacher salary with a ratio of 1.49. The ratio of the U.S. average teacher salary/per capita personal income is 1.20. Michigan’s ratio is 24 percent more than the computed ratio for the average U.S. teacher salary. Individual 2015-16 state ratios range from 1.49 (Michigan) to 0.88 (South Dakota).

Over the last 20 years, Michigan’s average teacher salary, in absolute terms, has slipped down the national rankings. Michigan’s rank dropped from 3rd highest in 1995-96 to 11th highest in 2015-16 (table below).

Michigan’s Average Teacher Salary Compared to the U.S. Average Teacher Salary, 1995-96, 2005-06, and 2015-16

  1995-96   2005-06   2015-16
Ave. Salary Ratio Ave. Salary Ratio Ave. Salary Ratio
Michigan $ 49,168 2.08 $ 58,482 1.78 $ 63,878 1.49
National Rank 3 1 4 1 11 1
U.S. Average $ 37,846 1.61 $ 49,109 1.37 $ 58,064 1.20

Over the same 20-year period, however, Michigan’s average teacher salary has remained the highest in the nation after taking into account state personal income. It is worth noting that the decline in Michigan’s teacher salary/personal income ratio over this period (from 2.08 in 1995-96 to 1.49 in 2015-16) is not a function of a decline in the average salary. The average salary has risen each year for the last 20 years.  The growth rate in Michigan’s per capita personal income has outpaced the growth rate in average teacher pay, thus driving down the computed ratio.Also of note, Michigan’s position relative to the indexed U.S. average teacher salary has slipped slightly during this period. In 1995-96, Michigan’s indexed salary was 29 percent higher than the U.S. indexed salary. In 2015-16, Michigan’s average salary was 24 percent higher than the U.S. average salary. Michigan’s ratio is closer to the U.S. average ratio today largely because U.S. per capita personal income has grown faster than Michigan’s per capita personal income since the mid-1990s.

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