Wednesday, May 14, 2008

Pondering about Money

(First, I should say that I am really craving the ice cream in my freezer. But it is mint coffee chip and it made me sick and overcaffeinated and unable to sleep last night, so I shouldn't have it right now. But I want it anyway, and it is probably only a matter of time until I cave and eat it. That is all.)

I haven't been applying to jobs lately --- hell, I'm barely keeping up with my teaching and various writing projects, not including the dissertation. But on one of those breaks the other day when I looked over at The Chronicle of Higher Ed's website to see if there was anything amusing, I caught sight of some private high school job ads. For some reason I looked them up. I hadn't really considered private school as a Plan B, mainly because I am invested in the idea of Making a Difference if I can't be working in my dream career, and the kids at elite private schools seem a bit too spoiled and wealthy to count as Difference-Making. Anyway, I got off on an extended search all evening and I don't have any conclusions really, but I'm just going to think out loud here.

First of all, it's really hard to find private school salary ranges anywhere on the web, which is frustrating. Both job ads described themselves as "competitive" and "in the top 10 percent" of whatever the national private school association is called, but how much is "competitive" then?

Well, I found some data that says the median salary at some private schools is 58k, with 40k being the starting salary and 82 being the "median highest salary." Now, I don't know if that should be higher or lower once you add the "other" private schools 'cause there was no clear explanation of how extensive this data was. But one job ad did point out that the position entailed teaching 4 classes with a course cap of 15 students. So that's 60 students a semester. At 58k that would be pretty sweet. That's for a private school in CA, by the way.

But that would not be Making a Difference nor really Doing Good in a serious way. And how does that compare to public schools anyway? I did some more searches.

This one job search website (no, not Monster) has a salary wizard on it listing all the cities --- or is it counties? --- in California. Anaheim is listed first, so let's go click on that. It's got a bell curve listing salaries from about 46 to 68, rounded up, but it tops out at 77 as a hard limit. In fact, only a couple schools list salary options as high as 80k. So I'm assuming most teachers don't get that high on the scale, and if they do, it's only at the very end of their careers.

Now, a PhD will get you shit in the CA school system, since you have to have a credential. And if you want to teach while using your degree as an "emergency credential," you gotta go where no one else wants to go. That will bring us into Making a Difference territory.

For example, the Oakland school district has some programs to bring noncredentialed teachers into the classrooms (ok, they want math and science people but I'm betting I could weasel my PhD --- or at least the MA --- into counting for something). This teaching fellow web site says you'd start at 38k, which is even lower than the salary.com site claims, but perhaps that's because you'd be working at getting your credential at the same time. And what would those teaching loads look like? The site says that Oakland school district's high school classes are between 30 and 40 students, and it's unclear whether you'd be teaching 5 classes or 4.

That would mean teaching anywhere between 120 and 200 students per semester in Oakland for 38k while also taking classes and studying for the credential.

Dear lord.

I haven't even touched on the fact that this would be Oakland, and I assume the students wouldn't want to be there and wouldn't want to deal with me. I would be scared. And that while I have teaching experience, it's as a middle class white kid teaching other middle and upper class white kids (mostly) who are there of their own will. Wow. I don't think I could hack that. I would want the public school kids at the private school class size and paycheck. And let me just state how shitty it is to have the kids who are poorest and need the most help have some of the biggest class sizes in CA, not to mention the teacher revolving door that has prompted this program. Wow again. Clearly I have not been paying enough attention to CA's k-12 side of education and I'm going to be following that more closely now.

But ok ---- there's always the Community Colleges, and depending on which one you work at you could very likely be Making a Difference. (though I think I'd rather teach shit like A Separate Peace in the high schools than do nothing but comp, day in, day out, forever.) I have a friend who got hired TT in a CA Community College and they started her at 74k. I think the scale goes up to 100 ---- it does on this salary scale I downloaded from a different CC. So what would that be? If we assume that their 5-5 load was for 20 person classes, that would be 100 students a semester. Well, at least the starting salaries are high.

By the way, on the job wiki last year they had a page where they asked peoples' starting salaries (in English). Most people listed their starting salaries at 50k or right around there. That doesn't give us any data on top-end salaries for English profs, though. Does anyone notice the irony --- no wait, that's not the word --- the shittiness of a system that puts us through 8 to 10 years of grad school and debt only to have us land smack in the same pay scale as public school teachers who only had to do 1 to 2 years postgraduate work? That's if you land a tenure track job. I'm not saying that there aren't amazing benefits to being a professor, but money is not one of them.

And no one talks about this; why do none of us talk about money in a serious way in the profession, in grad school? I'm just kidding; I know perfectly well why it is advantageous to the system to have us not be comfortable with discussing money publicly --- after all, now the courts have decided women have to file pay discrimination suits within 6 months of the discrepancy happening, meaning people with the middle-class value of not discussing money are all hosed. Or even more hosed.

Anyway, last year I had a blowup with a grad student who I overheard talking in in office hours. This grad --- let's avoid gendering this person and call hir Idealism Grad --- was asking hir student what said student was going to do after graduation. Since this student had no clue, and had just been talking about getting a C on the latest English paper, Idealism Grad advised said student to go to grad school in English, because it is really fun and it's a great job. I proceeded to barge into the office and rip hir a new one. Zie looked hurt, but acknowledged that maybe grad school is more of a commitment than zie was portraying it. "But you know, it pays well once you get out, right? Starting around 60, 70k or so, right?" zie said. "What fucking planet are you on? Did you mistake the E for Engineering and not English?" I responded. We haven't really talked since. But really, the fact that Idealism Grad thought undergrad English majors could just randomly clear 50k right out of undergrad and that profs all made way more than that ---- is that just that Idealism Grad is on extra-strength crack? Or is this a larger part of the grad school bait-and-switch problem ---- that we don't actually have these conversations publicly until, you know, 10 years later when it's time to go on the market crippled by debt.

Oh, yeah, the debt bit reminds me of one more thing. Besides looking at jobs and salaries and such the other day, I looked up the definition of a Roth IRA. Basically, it's a special account designed to encourage ordinary people to save for retirement, because you save money on taxes when you sock it away and let it compound for 20 or 30 or so years. You can put in a maximum amount each year --- usually 5 grand if you don't make boatloads of money --- but if you don't max out the contribution one year, you can't put in more the next year to make it up. I don't have one. That means that I can't make up the money I could have been putting in through all my 20s. I had no clue about this --- sure would be nice if people would have talked to me about this and other financial facts when I went to grad school! Let's compare using this Roth IRA calculator:

Your age: 22
Current IRA balance: $600
Contribute $ 5000 a year until you turn 50 ... then ...
Contribute $ 6000 a year until you turn ... then ...
Withdraw equal annual amounts over the next years.
At age 60 your account balance will be $582,513
You'll then be able to withdraw $36,089 annually for 30 years.
versus:

Your (real) age: 32
Current IRA balance: $600
Contribute $ 5000 a year until you turn 50 ... then ...
Contribute $ 6000 a year until you turn ... then ...
Withdraw equal annual amounts over the next years.
At age 60 your account balance will be $322,172
You'll then be able to withdraw $19,960 annually for 30 years.

Whimper...

16 comments:

Tenure or Bust said...

I wouldn't worry about the Roth IRA, it first started in 1998, so it wasn't well known and greatly advertised.

Also, the contributions to the Roth IRA were, at first, much lower than they are right now. In the beginning, the maximum was set at 2K, last year it was 4K, and for 2008 it was raised to 5K.

Fretful Porpentine said...

I spent a few weeks as a long-term sub at a private high school when I was in grad school. It was an odd, though not unpleasant, experience; certainly a lot more laid-back than my large public high school had been, even in the pre-Columbine days. Mostly, I remember these random Australian exchange students wandering around the campus, sitting in on classes whenever the mood struck them.

They were a pleasant group of students, but yeah, the whole privilege thing felt strange, and grade inflation was rampant. I don't think I'd want to do it in the long term, but that's mainly because I'm a little scared of the responsibilities that go with being in loco parentis for a bunch of underage kids.

I'm surprised the private schools are actually paying more than the public schools where you are -- I was under the impression that it usually worked the other way around.

kermitthefrog said...

Here, public schools are also financially advantageous -- it helps that they're unionized!

I was also completely scared off by programs like Teach for America and the NYC Teaching Fellows where you get credentialed while teaching in an underfunded school. Not only are you still going to school, they're asking you, the inexperienced teacher, to take on the hardest job. No. Fun.

But if you're thinking about high school, you might be able to look around and find schools that are somewhat socially responsible, via curriculum, financial aid policies, whathaveyou. Places like Friends schools, Ethical Culture, etc. Not that your students wouldn't be privileged, but some schools at least try to teach responsible ways of dealing with it. Don't know whether that would count as Difference-Making, though.

undine said...

Do you read the blogger What Now? She quit a tenured associate professor position to teach at a private school and has never been happier.
http://whatnow.typepad.com/whatnow/

Bardiac said...

You're absolutely right; we don't discuss money things nearly enough in the humanities. And there are LOTS of places where starting salaries in the 40s are pretty common, and salary compression sucks.

About the Roth: would you have had an extra $4K to sock away during grad school?

Starting retirement savings late is one of the opportunity costs of going to grad school. When I look at my retirement prospects, I swerve between despair and panic, and I'm probably doing better than lots of folks.

Bardiac said...

Oops, I also wanted to say, that while the Roth is a good idea for lots of folks, it's not so great for others. With a regular IRA (or 403b), you put in pre-tax dollars, and pay tax when you take them out. Since most people are likely to be in a lower tax bracket when they retire, that's a good idea.

With the Roth, you put in after tax dollars, but don't pay taxes on the money you take out. So, if you're in a higher tax bracket when you retire, you benefit. (I think you also have more flexibility in taking out the money than with a regular IRA.)

I'm not a financial advisor, and I didn't sleep at a Holiday Inn (is that the one?) last night. Using resources such as The Motley Fool or a real professional is a way better idea than trusting me!

Aimee said...

Thanks for this post. While I knew a lot of this already, it was nice to have it all laid out (especially the part about the Roth IRA. I need to open one now. Fuck - how old am I?) I agree that we, especially we women, and especially we women in academia, need to talk about money more openly. And there should be better resources for those who don't end up on the tenure track - just look at the numbers!

On "Making a Difference":
I'm always envisioning Plans A, B, C, and D, and the Teach for America option hovers somewhere between B and C. In college, I worked at a day camp in a poor urban area one summer, and it was definitely the hardest job I've ever had (and I've had a lot of jobs). Part of it was racial - aside from myself, all the staff and all the 200 kids were Black or Mixed, so I initially encountered some hostility. That seemed to wear away with time, though, and it was mostly just teasing (though it occasionally stung). It was pretty much the model of a "terrible job": I was working 12 hour days at $7/hr with no breaks, it was all outside, the only materials we had were secondhand. There was almost no training and I was a clueless 19 year old, so I really had no idea what I was doing. I was working with second graders, so it was especially depressing to witness the very real effects of poverty, negligence, and abuse. And it was hard not to get angry when I was in charge of thirty antsy children. There was a rule that we were *not* to yell at the kids, but that was hard when they tended to act out so violently.

It was incredibly stressful and emotional, it paid nothing, and I bungled the job on more than one occasion. (I also left a week before I had intended to, which was partly because I had a second job and I just wasn't emotionally/physically able to work 70-80 hours a week.) And yet, I'm still considering Teach for America. I'll be the first one to admit that it makes no sense, but even though the day-to-day at my former job was often unbearable, I felt so much more connected to my work than I did when I was, say, teaching at The Princeton Review.

If you choose to pursue that route, I think the first thing you have to give up is, oddly enough, the idea that you are going to "Make a Difference." Because honestly, that "difference" won't be visible in your daily interactions. If you do have an effect, it's probably going to be more cumulative, and it might not be evident to you. At the same time, though, you may be one of the only people in that child's life who actually cares what happens to them - and even if they don't value your efforts, it does have an impact in the long run.

I recognize I've not made a very good argument for urban teaching here, but that's my two cents for what they're worth!

Sisyphus said...

Bardiac --- I might not have had money to sock away, but the thing I didn't know about Roths was that you _can't_ add extra later to make up for years you missed earlier; they don't let you.

I looked at grad school costs entirely in terms of loans and credit card debt --- as long as I wasn't accruing either, I thought, I was doing fine (definitely better than most of my cohort members, anyway) and it didn't matter what speed I was going through school. I didn't even know that I wouldn't be able to make up for retirement prep in certain ways --- you can pay down loans ahead of time, why not your retirement savings stuff?

Then I started taking out loans so I wouldn't have to work during summers, just write. So now I've got no savings _and_ loans. Fuck! Ah well. May my story help out some other poor schmuck out there.

Sisyphus said...

And about the high school options (cause obviously I need to take over my own comments here), I think what I'm noticing on reading all your comments is that you need to break out and consider pay, teaching/student load, what I've ironically titled Making a Difference, and area cost of living and consider them all separately, figuring out what is really important to you, before making decisions about which jobs to take.

As some people have emailed me privately, those numbers are pretty high compared to other parts of the country. But in balance, you have to consider how freaking _expensive_ it is to dwell anywhere in CA --- it's tough to find places to rent under a grand or so, even in sketchy areas, and I'm so inured to high house prices that I've been going, oh look, cottages are dropping to about the 500k mark --- how cheap! It must be time to buy! So for all you who are making well under these rates, I hope you live in a low housing part of the country.

All of this added together, of course, means we should just up and have the revolution now. Seriously, it's shitty out there on all levels!

And to respond to Kermit and Aimee, I totally agree with the idea behind Teach for America while being completely ideologically opposed to the way it works. In _my_ system, we'd have a program funneling bright and committed and totally inexperienced do-gooders into the _wealthiest_ and most competitive public schools in the nation, where they could benefit from training in a resource-rich environment. Then we'd have "hazard pay," as I've heard it called: huge money incentives for teachers who have 5 years of experience to move into the impoverished districts. Studies have said that there's a real steep learning curve of about 5 years for teaching, and personally I'd rather disadvantaged kids weren't the guinea pigs for poorly trained beginner teachers.

Personally, I was a pretty bad teacher for at least the first year or so, and that's just for college students. I bet I'd have another year or so of just not knowing what is up if I moved into a high school classroom. Being parentally responsible for under-18 year olds is also pretty terrifying.

Aimee said...

K-12 educational reform is one of my biggest hobbyhorses. One of the main problem is with the funding structures, and the dirty secret lies in property taxes. More expensive property (i.e., suburban property) = more revenue from property taxes = better schools in those districts. In my opinion, the federal government should take over full responsibility for funding public schools, rather than leaving it up to local communities. In my scheme, all Americans would be taxed, and that revenue would be redistributed equally among schools - so where you live would not make such a difference in your education.

I also like your plan! I'm hoping Bill Richardson becomes VP and continues to champion a federally mandated minimum wage for teachers.

Flavia said...

So, let's talk specifics: I got out of grad school in 6 years (plus one year as a lecturer), and my starting, t-t salary was just under $50K. Which is actually a really good salary for the part of the country I live in.

A good friend of mine, two years behind me in college, went straight into teaching in a public school in a decent (not wealthy, but definitely not shitty) suburb of a major eastern city. She got her M.A. at night, in history, and started working on a Ph.D. part-time. By the time I got my own Ph.D. and my t-t job? She was earning more than me, and with considerably less debt. She now owns a nice apartment in a decent peripheral neighborhood of her (quite expensive) city, and has no debt other than that mortgage and a few $K in student loans--while I'm up to my eyeballs and can't even image buying a place for years, despite the low cost of real estate in the economically disadvantaged corner of the country.

That's just one story, but it's not atypical. And as academia goes, I should consider myself lucky.

Dame Eleanor Hull said...

Do let's talk about salary compression. I make in the mid-fifties, after 15 years on the (same) job. New people are being hired at around that much. We don't get cost-of-living increases. All raises are based on "merit," and they come only when the state legislature votes for money for raises. At least we do have a system in which merit points are "banked" in lean years, so you don't suffer unduly if you have a great publication/teaching award/whackloads of service year just when there is no money, and a slow year when there is. There are ways to avoid compression: win a university-level award that adds to your base salary, or get another offer. I should have added a paragraph about compression to my post about money and what you lose going into academia.

Bardiac said...

You're right, Sisyphus. You can't catch up with any sort of tax-advantaged retirement savings. And that makes things VERY hard for folks academia.

I'd worked in the mutual fund industry before grad school, just long enough to realize that, I guess. But I'm thinking most folks wouldn't know that.

(We'll never catch up, but I'm already too old to die young. I joke, but only partly. My dad worked and saved, with my mom, and put two kids through college, helped us with our houses. And died within about a year of retiring.)

Bardiac said...

I'm sorry to keep popping back, but wanted to make sure that you knew about 403b and 401k plans.

You can't catch up with IRAs or Roths, but if your employer has a 403b or 401k plan available, you can use them for tax advantaged savings. They won't "catch up" because you won't have years of buildup. But I can't afford to put in the amount I legally could because the limits are pretty high, WAY higher than IRAs or Roths. (And you can have both a 403b/401k and a Roth, unless you make too much money.)

Quiche said...

I think your point about a ROTH IRA is an important one--and one I am always belaboring. Its not just the ROTH IRA but a retirement account period that we don't have. (Like a 401k or 401b). The same math that you gave for the roth works for those retirement accounts as well. And the sad fact is that the earlier you start saving, the better off you are. It is *compound interest* that works for you so TIME is the main factor regardless. Though 32 isn't too bad--surely it is better than 40, or never. Anyway my boyfriend is a CFP so I have been inundated in these numbers. (He has a pretty cool website www.lightshipmutal.com)

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