College Graduates in This Profession Now Earn 27% Less Than Peers—A Record-Breaking Income Gap That Demands Attention

The paycheck divide hits new extremes—fresh graduates face unprecedented earning disparities.

Wage Compression Reality

That 27% gap isn't just a number—it's a career trajectory changer from day one. Industries once considered stable now deliver starting salaries that lag significantly behind comparable fields. The divergence appears within the first employment contract and compounds over time.

Graduation Day Financial Shock

Students enter the workforce expecting parity—they're encountering a financial reality check instead. The income chasm affects everything from loan repayment timelines to housing options. Some professions maintain premium compensation while others experience systematic devaluation.

Long-Term Earnings Impact

Early career disadvantages rarely self-correct—they establish patterns that persist for decades. The 27% initial gap can translate into six-figure lifetime earning differences. Retirement planning becomes fundamentally different when starting from behind.

Market Forces vs. Fair Compensation

Supply-demand economics explain some disparity—but not all of it. Certain sectors benefit from perceived prestige while others face arbitrary depreciation. The finance sector would call this 'market efficiency'—everyone else calls it unfair.

This isn't just about entry-level positions—it's about entire career paths being systematically undervalued while the gap keeps widening.

Key Takeaways

• Teachers have made less money than their fellow college graduates for decades, but the gap between those earnings continues to widen.
• A new paper from the Economic Policy Institute says the average teacher made about 73 cents for every dollar earned by a college-educated peer last year.
• Low pay is one of many factors exacerbating the current shortage of qualified teachers in the U.S.

It's no secret that teachers are underpaid as the profession remains one of the lowest-paying jobs for college graduates, but a new paper puts a number to the gap between the earnings of teachers and their college-educated peers.

Adjusted for factors like inflation, age, and location, teachers make on average 26.9% less than other full-time workers with similar levels of education, according to a new paper from the Economic Policy Institute and Center for Economic and Policy Research. The average weekly wages for a teacher were $1,447 last year, the paper found, nearly $1,000 below the $2,361 average for other college graduates, compared to 1996, when the inflation-adjusted gap was just under $300.

Income Gap Between Teachers, Other Workers Has Widened to Record Levels

That means that teachers make about 73 cents for every dollar their peers make, larger than the gender gap between male and female workers—women overall earn just 82% of what men make. Teachers' current pay gap is also much wider than the 93.9 cents teachers made comparatively in 1996.

The gap between teachers and other college educated professionals' earnings stayed between 5% and 12% from 1979 to 1993, but has widened in the decades since. That has largely been because of an acceleration of the wages of most college educated working adults, while teachers' pay has merely kept up with inflation.

When you compare them to their peers by gender, female teachers used to make more than their college-educated female counterparts, but the increasing number of women entering the workforce and working their way to higher-paying jobs has reversed that gap. The gap between what male teachers earn compared to other male college graduates has always been larger than the overall gap, going from 16.6% less in 1979 to a 36% "teacher pay penalty" last year.

Teachers make less than their fellow college graduates in all 50 states, though the gap between those earnings varies from 10% in Rhode Island to nearly 40% in Colorado, and teachers make at least 25% less than other graduates in 20 states, the study found.

Lackluster Pay Among Many Factors Fueling Teacher Shortages Across The Country

The National Education Association estimates that the average teacher salary is just over $72,000 as of this year. But the NEA says that after adjusting for inflation, average teacher earnings are down 5% in the last decade. The national average for teachers just starting their career is substantially lower at around $46,500.

In a report last year, real estate firm Redfin estimated that the average teacher can afford to rent just under half of the apartments within commuting distance of their school; they can afford only 14% of homes for sale in the same area.

According to the Learning Policy Institute, an estimated 1 in 8 teaching positions in the U.S. are either currently unfilled, or temporarily filled by someone who does not meet all of the job's certification requirements. Every state and Washington D.C. reported a shortage in at least one teaching area for the 2024-25 school year, the LPI found.

The teacher shortage is caused by both a lack of young people looking to enter the field because of low pay or other reasons and the high turnover rate the industry is experiencing because of retiring older teachers and younger teachers leaving for better pay or dissatisfaction with the education system, according to the LPI.

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The Bottom Line

The gap between what teachers make and what their fellow college graduates can earn continues to grow, a new study shows. Teachers went from earning about 7% less than other graduates in 1979 to nearly 27% less last year, with the growth in pay for educators barely keeping up with inflation. Young people are also citing pay as one reason they aren't going into teaching, and the job's conditions also driving some teachers out, exacerbating the current shortage of teachers in the U.S.