Michigan School Districts that Privatize Usually Pay Teachers More

Published June 10, 2014

Michigan school districts that privatize food, custodial, and transportation services tend to pay higher teacher salaries than school districts that privatize none.

According to data from the Mackinac Center for Public Policy’s “Michigan School Privatization Survey 2013,” 43 school districts reported that they have privatized food, custodial and transportation services. Far more districts (186) reported they do not privatize any of these services. And 65.5 percent of districts reported that they outsourced at least one service.

Examining salary levels in these districts reveals that in the districts that privatize all three services, the average teacher salary was approximately $60,000, while the average teacher salary in the 186 that don’t privatize those services was approximately $56,000.

“It is clear that privatization of services within school districts saves money,” said Audrey Spalding, director of education policy at the Mackinac Center. “Obviously, every school district that privatizes doesn’t use these savings in exactly the same way. A cursory comparison of teacher salaries in districts that are utilizing privatization with those that aren’t suggests that there may be link between privatization and higher teacher salaries. However, a more exhaustive study would be needed to be conclusive.”

Save Money, Better Services
In nearly every case, districts cited the ability to save money or improve service as their reason for bringing in private operators.

“A variety of factors, such as the school administrator’s willingness to privatize and district enrollment trends, might impact the average teacher salary numbers,” Spalding said.  “Comparative salary levels in districts that privatize only one or two services would also need to be evaluated.”

Cass City Public Schools provides an example of why comparative figures support the precept that teacher salaries are higher in districts that privatize, but the comparison is not absolute.

Located in Tuscola County, in the mid-Thumb, the Cass City district privatizes all three services and reports paying an average teacher salary of $60,000. The seven districts that surround Cass City do not privatize. Six of these seven districts reported paying average teacher salaries lower than the average paid in the Cass City district. They are: Kingston, which pays teachers $53,724; Caro, which pays $56,672; Mayville, which pays $54,052; Owendale-Gagetown, which pays $39,346; Marlette, which pays $56,992; and Sebewaing, which pays $56,845.

The seventh district, Ubly, was the exception. Despite not privatizing its services Ubly pays its teachers an average salary of $63,759.

Jack Spencer ([email protected]) is the capitol affairs specialist for Michigan Capitol Confidential, a news service of the Mackinac Center for Public Policy. Article reprinted from Michigan Capitol Confidential, with permission. Image by Reed Sandridge.