Madden: Hedonic Wage Index Levels Playing Field

Madden: Hedonic Wage Index Levels Playing Field

Sheridan County School District 1 among others in Wyoming have expressed disagreement with a potential shift in the formula used to determine how schools are compensated for cost of living. Representative Mike Madden (R-Sheridan/Buffalo) says wages should be based on a cost of hiring not on a cost of living.

He says that's what the Hedonic Wage Index does - the formula District 1 disagrees with. Madden says success and numbers of applicants in hiring is a true measure of what you're paying for in filling job openings instead of what the eventual person that's hired is paid. Some districts in Wyoming have difficulties lining up costs of hiring, he explains what that has been caused by.

District 1 Superintendent Marty Kobza has said that it doesn't make sense to use a formula that sees differences for the three districts in the same county. Madden says that when it comes to Sheridan County, even though people that work at Sheridan 1 and 2 buy and sell in the same market, one hires teachers at a higher rate. With the right wages set each should find it equally difficult in hiring teachers, Madden says. Giving the example that if there are three elementary job openings at District 1 and they get 10 applicants compared to the same situation at District 2 and other large districts that can get several hundred applicants. Madden says legislators are trying to level the playing field.

The Hedonic Wage Index attempts to calculate wages based on the fact people will live in an area for reasons other than financial compensation. Madden explained in economic terms: psychic income. For example in Teton County where he says compensation can be measured not only in how much a teacher is paid but by living in Jackson, near a National Park. Teton County stands to lose the most, $3.9 million from a Hedonic Wage Index switch. District 1 says they would be hit with a cut of around $300,000 from what they usually receive from the state. The issue will be addressed during the legislative budget session which starts February 13.

For more on the topic check out Madden's interview on Public Pulse from Tuesday, found under the Public Pulse dropdown menu.

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