Pulpit & Pew Report: Clergy Pay Causing Problems for Churches

Competitive, free-market approaches to determining clergy compensation -- used to varying degrees in virtually all Protestant denominations -- are harming the church and distorting its mission, according to a study by Duke University researchers.

Such approaches leave clergy financially vulnerable, change ministry from a "calling" to a "career," encourage congregations to grow for purely economic reasons and make it more difficult for pastors to offer leadership that challenges and transforms congregations, concluded the study's authors. The study is part of the ongoing Pulpit & Pew research project on pastoral leadership based at Duke Divinity School.

"We're not saying that churches necessarily need to run out tomorrow and pay their clergy more, although that may be the case," said Becky McMillan, a labor economist, co-author of the study and associate director of Pulpit & Pew. "But it is time for them to step back and think purposefully about how they're paying their pastors and why."

Low clergy salaries make it difficult for pastors to be true to their calling, the study contends. And this lack of income is causing many talented seminary graduates to enter other professions or other forms of ministry.

The issue of clergy salaries is, at its core, as much about how congregations view their pastors as it is about money, McMillan said.

"The fact that we use the free market to determine how much to pay clergy suggests that we view them as paid employees who compete for the position, and not as people who are called and compelled by God to spread the gospel," she said. "Our study suggests that looking at clergy as paid employees is a problem."

The study, titled "How Much Should We Pay the Pastor?: A Fresh Look at Clergy Salaries in the 21st Century," recommends that Protestant churches reconsider how they set clergy pay. Rather than turning solely to the free market for guidance, they should instead narrow the salary gap between pastors at small and large churches and provide all pastors with sufficient compensation to enable them and their families to live a decent life -- in essence, providing them with a "living wage."

To do so, however, will require many churches to surrender some degree of autonomy in order to share resources and act collaboratively with other churches, particularly in providing benefits such as health coverage, retirement and educational debt repayment.

The study was conducted by McMillan and Matthew J. Price, former associate director of Pulpit & Pew and now director of analytical research at the Episcopal Church Pension Group in New York City. The complete report is available online at the Pulpit & Pew Web site.

Using salary figures compiled in a 2001 national clergy survey, McMillan and Price sought to examine how free market forces shape clergy compensation and how that, in turn, affects the church. They looked at clergy salaries by church "polity," or organizational structure, particularly regarding the amount of independence individual congregations have in setting salaries.

In all but the very largest Protestant churches, salaries for pastors in "connectional" polity churches (those subject to some degree of centralized authority such as Methodists, Episcopalians, Lutherans, Presbyterians and others) are consistently higher than clergy salaries in "congregational" polity churches (those with local church autonomy, such as Baptists, Pentecostals, United Church of Christ and others), the report stated. That disparity occurred even when controlling for pastor education, experience and church members' income.

About 60 percent of Protestant pastors serve in small churches, with an average weekly attendance of 100 or less. It was in these churches where the impact of church polity -- and the free market -- was most apparent, according to McMillan and Price. The median salary, including housing, for pastors serving small churches was $36,000 in connectional churches and $22,300 in congregational churches.

In large churches (with 351 to 1,000 in attendance, comprising about 5 percent of all Protestant churches), median salaries were $66,003 for pastors in connectional churches and $59,315 for pastors in congregational churches.

The same disparities exist in regard to fringe benefits, the researchers found. Pastors in congregational churches are much less likely than their connectional counterparts to receive pension benefits and health care coverage. Only 30 percent of small congregational churches, for example, provided retirement benefits for their pastors, compared to 80 percent of small connectional churches.

McMillan and Price attributed the differences in compensation primarily to centralized decision-making in connectional churches, which promote  minimum salary guidelines and requirements to pay pension and health care benefits.

Regardless of polity, however, only a small percentage of pastors earn what most Americans would consider a professional-level salary, the study found. The median salary, including housing, for all full-time pastors in the study was $40,000.

Catholic clergy salaries do not create the same tensions, the researchers reported.

With no spouse or children to support, Catholic priests are generally paid less than Protestant clergy, the survey stated. Those lower salaries are offset by the provision of other benefits, including health care, retirement and theological education.

The range of salaries is much narrower for Catholic clergy. The median salary paid to Catholic priests varied only slightly regardless of the parish size, the survey showed. Median salaries for priests ranged from $20,883 for those serving small parishes (with less than 100 people in weekly attendance) up to $26,633 for those serving the largest parishes (with over 1,000 in attendance).

Rather than being determined by market forces, Catholic clergy salaries are set by the diocesan bishop and are typically comparable across a diocese. As a result, parishes that might not otherwise be able to afford a priest are often aided financially.

Freed from financial constraints, priests can more easily move between smaller and larger parishes as needed, the researchers said. Under such a system, excellence in ministry is driven not by financial incentives, but by faithfulness to one's call.