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Problems Recruiting a Reverend? An Economic Perspective on the Market for American Clergy

Grant Seiter was a 2018-2019 Young Scholar Awards Program recipient. He is currently a senior at Baylor University, majoring in economics and finance.

An increasing number of American pastors such as Ed Young, Rick Warren, and Joel Osteen have amassed sizeable incomes in pastoring their large congregations. Pastors in small to medium-sized churches, however, are struggling with problems of inadequate compensation. Many of these pastors are seeking second jobs to support their commitment to ministry work, an increasing number of seminarians are choosing not to enter the ministry altogether, and the number of ordained female pastors has reached all-time highs. Meanwhile, church attendance rates have declined, and a population-wide lack of identification with religion has developed.

In a survey conducted by the Divinity School at Duke University, seventy-eight percent of senior pastors rated their financial well-being as “somewhat important or of great importance in sustaining their commitment to pastoral ministry.” Yet, the average college-educated pastor earned an annual salary of $39,862 in 2010, while college-educated workers of other professions earned $68,707. In a recent study, I found that the percentage of those returning to an additional year of education is considerably lower for clergy than for members of other professions. And, between the period of 1950 and 2010, the difference between the two groups increased significantly. These results yield a number of interesting effects that aid our understanding of the current church climate. They suggest that pastors and young seminarians must give up more and more potential income for each year they invest in education simply for being in the ministry.

So, should we be at all surprised when capable college graduates choose to pursue occupations in the medical or legal professions instead of entering the ministry?

Well, if a church is at all like a firm, then its clergy members are most like management. Firms that wish to hire quality managers should offer a high enough salary to attract potential talent. And as it turns out, potential ministers most concerned with financial security and fair wages will choose an occupation with the most lucrative income benefits and not enter the clergy profession.

It is, unfortunately, the case that these potential ministers who choose not to become pastors are also (likely) the highest qualified and most able applicants. If high educational attainment is the market signal for high ability, then it is ultimately the highest ability individuals who exit. They are the ones who would give up the most potential income for each year of education they received otherwise. If they were to become pastors instead of taking their highest income option, they would in effect, be minimizing their choice for income.

If today’s pastors are of lower ability, then the decline in America’s church attendance rates could be related to the lower quality of clergy. Lesser quality clergy could also be a contributor to the increasing lack of identification with religion among Americans.

For entrepreneurial clergymen, a response to the lower percentage returning to education could be to build bigger churches. Through the use of A/V and other technologies, a small number of high ability pastors have amassed large congregations that are able to, in many cases, make up for the pay gap incurred by being a minister. These entrepreneurial pastors contribute to the recent trend of megachurches that are dominating the religious landscape. In fact, The Hartford Institute for Religion Research now maintains a growing database of 1,667 Protestant megachurches in the U.S. with average weekly attendance rates in excess of 2,000. Pastors that make this list often earn high salaries comparable to or far greater than the national average at their level of education.

In recent decades, the number of women pastors has increased dramatically. In 1950, women represented only two percent of the clergy. Today, that number is nearly 20 percent, and women comprise a third of students training in Protestant seminaries. While civil rights and feminist movements around 1970 certainly pushed many protestant denominations to open ordination to women, the rapid adoption of women to the profession is likely another result of the lower percentage returning to education. Gaps in the labor market left by men selecting out of the profession could be filled by women or lower quality men. This would especially be the case among smaller, lower-paying congregations as lower income positions are likely less of a barrier for female pastors. In the Divinity School survey at Duke, one-hundred percent of female pastors reported having a fully employed spouse, compared to only 80 percent of male clergy.

To be sure, any analysis of religion is incomplete without an acknowledgment of the role that “calling” plays in religious decision-making. While pastors certainly respond to a religious calling when making employment decisions, economic self-interest and rationality are also central motivators for pastors as they fall subject to the same market forces as any other worker. Additionally, whether these effects occur outside of theory remains to be examined. It could be the case that clergy quality has increased despite this analysis. Becoming a pastor, by its nature, requires sacrifice. Those who are most willing to incur the financial sacrifice could be the most desirable candidates for the profession.

So, how much should churches pay their pastor? For a profession rooted in sacrifice, the large incomes of megachurch pastors seem to be in conflict with tradition. But in a time of decreasing church attendance and less identification with religion, could the prospect of recruiting and retaining higher quality pastors be worth a shift in values?

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