The teacher pay penalty remained high in 2025

 

Teachers made 25.2% less than similarly educated professionals

Teachers earned 25.2% less than comparable college graduates in other professions in 2025, according to a new report from the Economic Policy Institute and the Center for Economic and Policy Research (CEPR).

The relative teacher pay penalty—which is adjusted for education, experience, and demographic characteristics—was a slight improvement from 2024’s record high of 26.9%, but still more than four times the 6.1% penalty recorded in 1996. In other words, teachers earned on average 74.8 cents on the dollar in 2025 compared with other college graduates—much less than the relative 93.9 cents on the dollar that teachers earned in 1996. When broken down by gender, the relative teacher pay penalty was 34.5% for men and 20.0% for women.

Overall, simple inflation-adjusted weekly wages for public school teachers fell 6.2% over the last three decades, while wages for other college graduates rose 28.8% over the same period. 

Teachers were paid less than other college graduates in every state, with relative teacher pay gaps ranging from 10.4% in Rhode Island to 40.7% in Colorado. The teacher pay penalty was at least 25% in 25 states.

While teachers typically receive better benefits packages than other professionals, this only partially offsets the growing wage penalty that teachers face. After accounting for the difference in benefits, teachers’ total compensation penalty was 14.5% in 2025. 

As the report explains, providing teachers with competitive pay is necessary to retain and attract qualified workers. While there are many important factors impacting teacher retention and recruitment, pay consistently lands near the top of any list. 

Reversing these trends will require targeted, sustained investment in public education at the local, state, and federal levels. It will also require stronger support for public-sector collective bargaining, which has long been a driver of better pay and job quality for teachers.

“The decades-long teacher pay penalty has taken a heavy toll on public education. Yet, policymakers have failed to make the needed investments to reverse course. That failure is especially troubling in a country as wealthy as the United States, with more than enough resources for its public schools to be the envy of the world,” said report author Sylvia Allegretto, who is a senior economist at CEPR and research associate at EPI.