Effects Of Supply And Demand On Teachers ' Salaries

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Claire Skaggs
D. Schneiderheinze
2 May 2015
Effects of Supply and Demand on Teachers’ Salaries Supply and Demand has a major effect on our economy. It effects teacher’s salaries more than people think. Salaries are determined by the market forces of supply and demand. Today, schools try to focus on obtaining teachers who have a strong impact on student’s learning abilities. Everyone assumes that teachers are just one group that has the same subject specialties, years of experience, and the same education credentials. People also assume that all teachers are paid the same salary and that everyone agrees how to identify an effective teacher. These assumptions are unrealistic but helpful in explaining further the concepts of
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A higher number of effective teachers are willing to provide their skills to school districts if the wage is high than if it is low. Meaning that effective teachers are willing to work for school districts that have higher paying salaries, even if the working conditions are poor. Along with demand, a change in supply, other than wages, will shift the supply of teachers outward or inward. Outward will mean that more teachers are willing to work for a school district at any wage. An inward shift means that fewer teachers are willing to work at any wage. Increasing wages that effective teachers can command in another occupation, means that any given wage, fewer teachers will be willing to provide their teaching service. The labor market for teachers will be in equilibrium when the number of effective teachers who are willing to teach is exactly equal to the number of teachers the school district is willing to employ. Also, there is equilibrium when the quantity supplied is equal to the quantity demanded at a single wage. This is what economists call the market-clearing range. Some teachers are willing to work at wages set below the market-clearing wage. This creates a problem because there are not enough effective teachers willing to work under the market-clearing price to meet the quantity demanded at that wage. There are however, effective teachers whose decisions of employment are based on other things, not just wage. They are not throwing out the financial obligations,
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