Minnesota state policy makers are concerned about teacher compensation because it constitutes a major category of state and local spending and can affect education results. This report examines compensation issues by describing the pay structure of Minnesota's K-12 public school teachers, making pay comparisons with other professionals, and examining teacher supply and demand. During the 1988-89 school year, the average compensation for Minnesota teachers was $38,400, including $31,233 in salary and $7,167 in fringe benefits. Pay comparisons indicate that teacher pay is competitive with pay in most other professional and managerial occupations. Various measures of teacher supply and demand indicate that teaching is competitive with most other occupations. However, only one-fourth of teacher graduates from Minnesota colleges find full-time teaching jobs in Minnesota. The state's schools receive an average of 44 applications per job openings. School administrators surveyed reported little difficulty in finding well-qualified applicants for most types of teacher positions. Only 17 percent of districts with science openings reported a recruitment problem. Teaching positions in specialized fields (special education, counseling, and foreign language) experienced the most recruiting difficulty. Targeted pay increases for these specialty areas might be an effective strategy. (MLH)