Police, Teacher Pay At 20-year Lows

Tuesday, 28 May 2024, 6:29 pm
Press Release: RNZ

Susan Edmunds, Money Correspondent

Police and teachers are currently being paid their lowest rates compared to the minimum or average wage in at least 20 years.

Infometrics economists have crunched the numbers on pay for teachers, nurses and police.

Earlier in the year, chief forecaster Gareth Kiernan had noted that MPs were being paid their lowest salary compared to the average wage since the 1970s, before their latest pay increase.

The data showed all three sectors' pay was comparatively lower on a range of measures compared to the past, too.

"Compared to historical norms, police pay looks particularly poor, and teachers don't look that good, either," Kiernan said.

"Nurses don't appear to be quite so bad, although the recent figures are inflated by the pay equity settlement. If you exclude that from the figures, on the basis that nurses were previously being underpaid because it was a female-dominated profession, then their pay isn't great either."

For police, the lowest pay rate for a sworn officer was $75,063 - the lowest level since 2007 compared to CPI.

Compared to average wages, it was at the lowest point of any time since 2003 and possibly since 1969. It was 41 percent lower than the high point in 1981.

Compared to the minimum wage, it was lower than at any time since 2003 and possibly since 1967. It was 63 percent lower than in 1981.

Police officers have been involved in a pay dispute but were expected to have a new pay offer confirmed by the end of August.

Kiernan said secondary school teachers' income relative to the CPI was the lowest in June last year - just before their latest pay increase - since 2006.

The post-primary teachers association (PPTA) said most of its teachers were paid at the top of the pay scale, which was $99,216 a year, going up to $103,085 in December.

"Over the longer-term, teachers' pay has been reasonably stable compared to the CPI, and the pay increase set to come into effect from December this year should push inflation-adjusted pay up to a level that is higher than was seen at any time between December 1986 and June 2020," Kiernan said.

"That outcome sounds great for teachers, but if we compare teachers' pay to either the average wage or the minimum wage, it's a different story. In June 2023, teachers' pay relative to either of these variables was at its lowest on record, since 1980. Even with the subsequent pay increases that have occurred and/or will occur in December this year, teachers' pay relative to the average wage or the minimum wage will still be lower than at any time before June 2019."

He said the teacher pay situation could be leading to wider problems.

"New Zealand's poor educational outcomes and persistently poor productivity results, in combination with pay rates that are continuing to decline relative to other wages and salary, potentially become something of a chicken-and-egg problem.

"One can't expect good educational outcomes without good teachers, but good people won't be attracted to the profession or retained as teachers without good pay either - and primary and secondary education doesn't seem to be an area where investment in capital equipment, automation, or economies of scale are going to make a significant positive impact. Of course, there are other big issues as well such as the curriculum, assessment methods, and the incentives to teach to the median student's ability rather than taking a more tailored approach to student needs."

Kiernan said before the pay equity boost that started in 2021, nurses' pay was at its lowest level compared to the minimum wage in all of the available data.

"The pay equity boost pushed nurses' pay in 2022 up to its highest level, relative to the average wage, on record. However, relative to the minimum wage, it was only at its highest level since 2016."

The nurse pay cited was $75,773.

"I wonder whether one of the key aspects of each of these professions is that there is limited scope for improved labour productivity and/or greater capital intensiveness," Kiernan said.

"At its simplest, a teacher can only achieve significant 'productivity' improvements by having more students per class; a nurse by having more patients under their care; a police officer by covering a wider area. I can think of how technological advances might have made some of these changes possible - electronic monitoring of patients would require less human supervision of patients in hospital, for example.

"But my impression is that the advances will have been more constrained than across many other occupations, where computers have had a significant effect on people's output over the last 40 years," he said.

"As a result, average wages at an economy-wide level might have been able to lift faster because people have been more productive, and the mix of jobs in the economy has also changed towards higher-skilled and higher-paid ones. This trend might have meant that specific occupations with a high human element to them have been left behind a bit, relatively speaking, in terms of their pay rates.

"It's a difficult situation, because as we saw during Covid-19, people seem to implicitly value the human nature of those roles when the going gets tough - but the pay rates don't necessarily reflect that."

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