This current version was updated 4/4/2020.
If anyone has any issue with the data or analysis, I’d welcome that discussion – I’d like to make sure my data is as accurate as possible, if you see something, say something!
Data for this analysis was from a period starting in 2012 and ending in 2018, based on the latest pay data available from the sources listed.
I use this period for a specific reason. In 2012 the people of California recognized that cuts made as a result of the Great Recession had gone too deep into education, and voted to increase taxes to fund better education for our kids, via Proposition 30.
During this period funding for schools (per the California Department of Education’s “Annual Financial Data” reporting, commonly called “SACS Data”) has skyrocketed.
Education funding in the county is up $3,498/student, a total increase of 36.95%, or 5.38% per year.
This has resulted in a total rise in revenue of $1.25 billion dollars per year.
During this time the inflation rate in this area (per the California Department of Industrial Relations) has averaged 2.19%, meaning school funding has gone up 2.46 times faster than inflation.
San Diego County Compensation
As a baseline for comparison to compensation levels normal in private industry in this area, I’m using statistics for private industry as reported by the US Bureau of Labor Statistics (USBLS) and the US Census Bureau (USCB).
Average Wage and Benefit Compensation
According to the USBLS, in 2018 the average pay of private industry workers in the county was $60,273/year.
For the period 2012-2018 the BLS Compound Average Growth Rate (CAGR) of wages was 2.21% per year.
Benefit packages for education employees are significantly more costly than they are for private industry employees. In order to do an apples-to-apples comparison we need to adjust to compensate for this difference.
Healthcare package differences are difficult to obtain. We know many school districts pay 100% of the cost of healthcare for the employee, and often their dependents. We also know many districts also pay the cost of healthcare during the period between retirement and eligibility for Medicare (called Other Post Employment Benefits or “OPEB”).
And we know that in private industry both are rare, with most private industry paying 50-75% of healthcare insurance costs and no benefit for retirees.
However, the differences are not consistent enough to develop a factor to be used for adjustment so for this purpose we are ignoring that difference.
Retirement benefits are different, in that they are much more consistent and available.
Vanguard (the world’s largest retirement plan administrator) has found the average contribution by private companies to retirement plans on behalf of their employees in 2018 was 4.2%. Typically the employee is required to contribute an equal amount to obtain that match.
Both employer and employee are also required to contribute 6.2% to social security.
This gives us a total annual retirement contribution amount for private industry of 20.80% of employee pay.
California’s public pension plans are usually exempt from Social Security withholding so nothing is deducted from the employee’s pay and no employer contributions are required.
CalPERS and CalSTRS (the pension plans for support and certificated staff respectively) have different employer contribution rates. Contribution rates for employees also vary depending on when the employee started in their plan and what type of job they do.
Using the “miscellaneous” employee rate for CalPERS and the highest employee contribution rates for both plans, in 2018 the total contribution rate (employer and employee) for both was:
CalPERS – 22.53%, CalSTRS – 34.51%
Which means district employees covered under CalPERS were given an extra 1.73% of their pay (over the comparable private employee) and CalSTRS members were given an additional 11.98%
Median Wages by Educational Attainment
To determine comparable wages by educational attainment, I use UCSB numbers, which are reported as median values.
According to the Census Bureau in 2018 the median county resident with a bachelor’s degree made $61,333/year. The median for those with graduate or professional degrees was $84,155/year.
According to the California Department of Education’s DataQuest reporting system (“Staff Education Report – District Level”) for 2017-2018, 38.74% of SD County teachers have a bachelor’s degree, 61.26% have more advanced degrees.
If we adjust the USCB numbers to weight them according to this mix, the average SD County resident with educational attainment similar to the SD County teacher workforce made $75,314 in 2018.
San Diego County K-12 Compensation
Using public pay data reported by San Diego County K-12 districts, obtained through California Public Records Act requests and posted on the Transparent California website, we find:
All Full-Time Employees
In 2018, the average total pay of all 42,989 full-time SD County K-12 employees was $72,393/year.
This is $12,120 or 20.11% more than the average county resident. This does not include the additional compensation received by district employees in their retirement benefit plans.
The average total compensation (including benefits) of this group was $94,907/year.
To determine the rate of pay increase for employees, we look at longitudinal data (data on the same employees over this time).
In 2018, we find 16,618 full-time employees who have been with their districts since 2012. This cohort of continuing employees has had their average total pay increase by $19,814/year (or 32.32%), with a Compound Annual Growth Rate (CAGR) of 4.78%.
This average growth rate is 2.16 times greater than the rate of growth for the average county resident (of 2.21%) during this period.
Median total pay for this group increased with a CAGR of 5.17%
In 2018, the average total pay for 2,272 full-time administrative employees was $115,775/year. Including benefits, average total compensation was $144,364/year.
The median total pay for such employees was $125,089/year and $156,214/year respectively.
In 2018, we find 1,156 full-time administrative employees who have been with their districts since 2012. These continuing employees had an average total pay of $120,143/year, with average total compensation (including benefits) of $148,640/year.
Median total pay for such employees was $127,750/year, with total compensation $159,013/year.
Since 2012, this cohort of employees has had their average total pay increase by $34,822/year (or 40.81%), with CAGR of 5.87%.
This growth rate is 2.65 times greater than the rate of growth for the average county resident (2.21%) during this period.
Median total pay for this group increased with a CAGR of 6.52%.
In 2018, the average total pay for 22,468 full-time certificated employees was $85,539/year. Including benefits, average total compensation was $110,678/year.
The median total pay for such employees was $88,291/year and $114,257/year respectively.
In 2018, we find 9,202 full-time certificated employees who have been with the district since 2012. These continuing employees had an average total pay of $93,394/year, with average total compensation (including benefits) of $118,594/year.
The median total pay for such employees is $94,920/year, with total compensation $120,237/year.
Since 2012, this cohort of employees has had their average total pay increase by $22,461/year (or 31.67%), with CAGR of 4.69%.
This growth rate is 2.12 times greater than the wage growth for the average county resident during this period.
Median total pay for this group increased with a CAGR of 4.43%.
In the Certificated group, a reasonable case is often made that teachers should be paid commensurate with their educational attainment, based on what they would be likely to make with the same education if they were working in private industry.
Comparing SD County K-12 certificated employees to the median for county residents with comparable educational attainment, we see that the 2018 SD County K-12 certificated full-time median total pay (of $88,291/year) is $12,977 (17.23%) higher than the median for comparably educated SD county residents of $75,314/year.
If we account for the additional 11.98% in compensation certificated employees receive through their retirement plan contributions, that difference is $21,997/year or an additional 33.18% over comparably educated county residents.
If we assume a 30 year career, this difference could amount to a total of $659,918 in additional pay.
As we saw above, education funding in the county is up $1.25 billion/year, climbing at a rate almost 2.5 times faster than inflation.
It is obvious that a significant contributor to these financial problems is wage growth at higher rates than average for residents of the area, combined with final pay rates also significantly higher than comparable employees in the area has budgetary impact.
This is particularly difficult in K-12 education, where the cost of pay and benefits is often 80% or more of the total.
What if K-12 districts had kept their pay growth in line with to rates being given to all other county residents?
In SD County K-12 schools, if rates of wage growth had been kept to the county average, the total cost of pay would be $1.27 billion/year lower than it is now.
This would also have reduced the cost of the pension portion of benefits (which is based on a percentage of pay), which, when added in, means the total reduction in cost overall would be approximately $1.7 billion dollars.
In other words, not only would we avoid the need to make any cuts in budgets, but would have about $400 million/year additional, to increase services and programs for our children.
And our education employees would still have received raises at the same rate as everyone else in the district as well as final pay rates that would still exceed what they would likely make in private industry.