When compared to the national or state

Topic of Discussion:

Discuss, investigate, and research the following with your teammates:

When compared to the national or state averages, there is no disputing that the economy of Eastern North Carolina (NC) is depressed. Having a depressed economy has its advantages in terms of a lower cost of living and lower wage costs for businesses.

This week, your team has been selected by policy makers to write up an executive summary report on the philosophy (or general direction) of the compensation packages for K-12 teachers in North Carolina (with an emphasis on eastern NC, which is roughly everything east of I-95).

The Bureau of Labor Statistics (bls.gov) reports that NC K-12 teachers are paid 85.1% of the national average. Some politicians have argued that in order to attract good teachers, and retain them, NC needs to pay at least the national average (an efficiency wage argument). Others have argued that since there is so much more to do in the Raleigh and Charlotte areas, there is little need to pay those areas more than the rest of the state even if the cost of living is somewhat higher. You are to evaluate the merits of the efficiency wage argument for the NC teachers, and determine if this should be a uniform policy. Additionally, how would your solution change if the problem was for a for-profit company instead of a non-profit bureaucratic institution?

One further thought, what is a shortage? How would one recognize a shortage? Is there a general shortage of teachers in NC? What does a lack of a shortage of teachers say about their pay?