Teacher pay and living costs

Adele Redmond asked me last week for some of the numbers around CPI and the current pay disputes in nursing and teaching. Her story's up at Stuff now.

I'd pulled the LEED data on median earnings by industry [Table 4: LEED measures, by industry], noting that while the School Education one will be close to teacher salaries (but also includes all school-employed support staff), but that nurses will be spread across a few different sectors - and that each of those sectors will include a broader set of salaries than just nurses. So if doctor and administrator salaries had been surging and nursing salaries had been lagging, you could still see a rising green line for median earnings among those employed in hospitals.

There's never room in any story to include all the details I'll have sent through, so I'll often copy them here. Here's what I'd sent though (as well as a bit of preamble with warnings around interpreting the industry classifications as wages for any particular employee group). But on first cut it looks like wages in education overall have been keeping up with wages in other professional service industries. Unfortunately, the data only goes through 2017.

“Inflation has been very low since about December 2011. Since that quarter, the annual percentage change in household living costs has never been above 2%. That overall figure includes rent, but would not include the cost of buying a house. It is difficult to explain salary increases substantially above 2% as representing cost-of-living adjustments, unless salaries had been frozen for any substantial length of time.”
 
“In our 2014 report on declining student numeracy, we worried that declining relative teacher salaries, as compared to other professional salaries, might have been making it harder for the sector to attract quality teachers. But we found that, from 2000 through 2013, median salaries in teaching (primary and secondary schools) had generally kept pace with other professions like scientific research services; architectural, engineering, and technical services; legal and accounting services; and management and consulting services. Salaries differed across those areas, but increases in salaries from 2000 through 2013 had been roughly comparable across the industries. An updating of those figures through 2017 suggests that salaries in primary and secondary schools, and in hospitals, have been keeping pace with salaries in other professional service industries.”
 “In other areas, salaries are a matter for negotiation between relatively small employers and their employees. And, in most cases, they will be able to set pay and conditions to reflect local realities. If the cost of housing in Auckland means that it becomes harder to employ lawyers in Auckland, then law firms can either increase salaries in Auckland or relocate to places where the cost of living is lower. Schools and hospitals cannot relocate in response to local cost pressures, and it may be harder to set local pay in national level agreements to adequately reflect local conditions. But it can also be difficult to attract skilled staff to some places where the costs of living are very low, because they may not have the local amenities that professionals might demand.”
 
“If the employer, in this case the government, has a difficult time attracting and retaining quality staff in education or in health, then there can be a case for increasing salaries regardless of CPI or relative pay across industries within New Zealand; teachers and nurses can be internationally mobile. Similarly, if the government wishes to substantially change the characteristics of the employment pool by increasing salaries, then there could be a case for increases. But we might note that private sector firms finding it necessary to increase salaries across to attract and retain quality staff, or to improve the quality of incoming staff, may couple that with performance assessment.”