Should have chosen another line of work.gettyA new report from the Economic Policy Institute and Center for Economic and Policy Research (CEPR) finds that teachers are still paying a penalty for choosing a classroom career instead of comparable professions.The new report shows that the teacher pay penalty for 2025 stands at 25.2%, meaning that teachers earn about 25% less than college graduates in other professions. This is a slight improvement over the 2024 figure of 26.9%, but two decades of study still shows a steady decline of teacher earning power. The EPI/CEPR report found that wages for public school teachers, adjusted for inflation, have dropped by 6.2% over the past three decades. Over that same period, wages for other college graduates have risen by almost 30%.A National Education Association report issued earlier this year similarly finds that teacher pay, adjusted for inflation, has declined about 5% over the last decade.Report author Sylvia Allegretto points out that gender is a factor. In 1960, female teachers actually earned 14.7% more than other female college graduates, but by the 1990s that premium was gone. She estimates that since 1960, female teachers have actually seen a 34.7% deterioration of relative wages.MORE FOR YOUMale teachers have paid a penalty as long as the data has been collected, but their penalty has also grown steadily over the decades, from 20.5% in 1960 to 34.5% in 2025. These figures represent national averages, and the report also breaks the penalty down by states. Rhode Island teachers pay the smallest penalty (10.4%) followed by Vermont, Wyoming, South Dakota, New Jersey, and Mississippi. The highest penalty is paid by teachers in Colorado (40.7%) followed by Missouri, Arizona, Kentucky, and New Hampshire. 11 states have a penalty greater than 30%.These figures underline a reality of the teacher “shortage” plaguing most states. An undergraduate at a college or university, weighing various career options, is going to see that teaching offers the less appealing return on their college investment. There are also implications here for the government’s recently-issued rules to “hold colleges and universities accountable for low-earning programs” for financial aid.Under the new Student Tuition and Transparency System (STATS) and Earnings Accountability rule, undergraduate programs will be required to demonstrate that their graduates earn more than the typical high school diploma holder, and graduate programs will be required to demonstrate that their graduates earn more than the typical bachelor’s degree holder. If a program fails to show at least this modest financial return on investment for its graduates in two out of three consecutive award years, it will lose eligibility to participate in the federal Direct Loan program.The median high school graduate earned roughly $47,000 in the first quarter of 2025, according to the U.S. Bureau of Labor Statistics. Average annual salary for high school graduates in August 2026 was just under $44,000. NEA reports that the average starting salary in the US was $48,112 in 2024-25, with many states near or below the $40,000 mark. And these are all averages, meaning many individual districts fall below the line as well, meaning that federal loan assistance could be cut off for aspiring teachers, further breaking the already-troubled teacher pipeline.The teacher penalty may include not just a penalty for earnings, but for the financial assistance to even enter the field. If policy makers are truly concerned about a teacher shortage, this seems like an area to address directly and decisively. If their response is, “Well, if people don’t want to pay that penalty, they should choose another line of work,” they cannot be surprised when many people do, in fact, choose another line of work, and schools have more trouble finding teachers to work in classrooms.