In a recent meeting with reporters in Detroit, Education Secretary Rod Paige spoke heresy to the education establishment. He asserted that the "teacher shortage" is "contrived" and that many individuals who would make good teachers are shut out by the current system. He's right.

For more than a decade, educational Cassandras have been warning that the U.S. faces a "crisis" in recruiting teachers for public school classrooms. Newspaper articles warn of looming disaster as aging teachers retire in droves, leaving public schools scrambling for warm bodies to put in classrooms. We're told that two million new teachers are urgently needed and that, unless taxpayers reach deep into their pockets, throngs of children will attend classrooms with unqualified teachers.

These self-serving crisis forecasts were wrong and remain wrong. The faulty analysis underlying the "two million new teachers" forecast came from a federal study that used projections of student enrollment, student-teacher ratios, and teacher turnover to estimate the total number of teacher hires over a decade ("Predicting the Need for Newly Hired Teachers in the United States to 2008-09," by William J. Hussar, National Center for Education Statistics, August 1999). These projections were picked up by media and widely disseminated by education interest groups. But they were based on an erroneous assumption. The forecaster ignored the fact that many teachers who leave the school workforce in a given year return one or two years later. All he did was cumulate the gross outflow of teachers for a decade while ignoring the reflux of teachers who had withdrawn temporarily from the schools. Yet returning teachers account for over one-third of new teacher hires in any year. In fact, every year our colleges and universities continue to graduate education majors far in excess of net new teacher hires.

The Cassandras also ignored the business cycle. It's true that in 2000-2001 many school districts found themselves with more teacher exits and fewer applicants than in earlier years. Many had difficulties filling vacancies in certain subjects. But their situation was hardly unique. Hospitals also struggled to recruit nurses, computer firms had trouble finding programmers, and even the local Taco Bell was hard-pressed to find workers for its fast-food counter. Unemployment rates in 1999-2000 hit forty-year lows that made it difficult for virtually all employers, including school districts, to fill vacancies. But that was then and this is now. With the recession and the deceleration of K-12 enrollment growth, many school districts are again awash in teaching applications.

Most districts have adequate resources to put qualified teachers in classrooms and are doing so. But they could do a better job with the resources they have if key reforms were made, beginning with barriers to entry - Secretary Paige's point. In professions such as medicine, law, dentistry, or accounting, states issue a single license. By contrast, in teaching, a typical state issues 100+ different licenses and endorsements (Missouri currently issues 178). And these are just current licenses. Deciphering state teacher certification systems rivals the human genome project in complexity. Not surprisingly, few school districts - even the wealthiest - are fully in compliance.

State boards of education (or legislatures) must overhaul these Byzantine certification systems that throttle supply but do little to raise quality. That overhaul should include fast-track alternative certification systems for individuals who already hold baccalaureate degrees. Experience with the federal Troops to Teachers program and state experiments with alternative-entry programs suggest that there is a sizable pool of well-educated career changers who would like to become teachers at current levels of wages and benefits. But the barriers to entry are too high. States need to lower those barriers and at least enable schools to audition these potential recruits.

School districts must also develop more efficient, market-oriented compensation policies. Unfortunately, nearly all of them still determine teacher pay according to salary schedules based on years of teaching experience and graduate education credit hours. These schedules apply to all teachers - from kindergarten to high school physics - regardless of subject expertise, school conditions, or individual effectiveness. Such rigid schedules have two unfortunate consequences. First, they produce shortages. Kindergarten teachers and high school physics teachers are both important, but their alternative earnings opportunities differ greatly and the teacher-pay system must take account of that. Imagine how well university business and engineering schools would be staffed if they paid faculty salaries no higher than the sociology department.

These rigid schedules also guarantee that poor children will get weaker teachers. School working conditions differ, and schools with many poor and minority students are often located in tough or inconvenient neighborhoods. Many teachers use their seniority to transfer to more pleasant and accessible environs. By paying the same rates in every school, these salary schedules make it harder for inner city schools to get the most experienced instructors. The military has long recognized the need for "hazardous duty pay." Public schools need to do something similar.

When additional money becomes available, rather than boosting the pay for new teachers, many school districts "backload" pay, i.e. provide larger increases to senior teachers who had "topped out" on the salary schedules. (That's because teachers who haven't yet been hired have no representation on the union side of the bargaining table while veterans have ample clout.)

But districts are not the only culprits in when it comes to backloading. States are culpable as well. Private sector employers have long recognized that, to recruit young, mobile professionals, they must provide fringe benefits that are mobile as well. Hence private sector employers (and most higher-education institutions) have shifted from defined-benefit to defined-contribution pension plans. Young high-tech workers and college professors taking their first job know that, if they change employers in a few years (as many do), their benefits will travel with them.

By contrast, public school teachers are locked into defined benefit plans that transfer wealth from young teachers who may teach only a few years to older teachers. Imagine how much more attractive teaching might become to young college graduates if pension contributions were paid instead into 401k plans.

Finally, districts must curb their teacher-hiring binge. Between 1980 and 1990, public school enrollment in the U.S. grew by less than one percent while teacher employment rose by ten percent. Between 1990 and 2000, pupil enrollments grew 14 percent but the teaching workforce expanded by 23 percent. (See Figure 1.) What does it mean to talk about "teacher shortages" while districts are ballooning their teaching workforce at rates far in excess of enrollment growth? If public schools returned to the student-teacher ratio that prevailed in 1980, they would recoup about sixteen percent of their entire payroll, money that they could use to selectively raise the pay of the remaining teachers, thus ending spot shortages and boosting quality. No budget increase would be needed.

Given the bleak budget circumstances now facing most states, legislators face tough spending choices. More money may yet be needed to staff some public school classrooms with able instructors. First, however, districts should be obliged to use their current resources in a more efficient manner, and policy-makers should give them the flexibility to do so. Secretary Paige should keep pushing in that direction.

Michael Podgursky is Middlebush Professor of Economics and Department Chair at the University of Missouri - Columbia.

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