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Synthesis of Evidence on Pay Parity

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Evidence on Pay Parity.
By Dr Sarah Alexander, Karen Girvan, Bethany O’Hagan, and David Haynes with Tolo Pereira and Heather Te Huia.
Sept 17, 2020.

The following is a synthesis of evidence for the Ministry of Education, as the Government’s lead advisor on education, to use to inform its work towards ensuring all trained and certificated teachers in NZ’s publicly-funded early childhood education (ECE) system have pay parity with school teachers.

The Ministry of Education isthe Government’s lead advisor on New Zealand’s education system.” It shapes “direction for education agencies and providers” and it contributes “to the Government’s goals for education.”

At present the ministry facilitates cost savings for the government and service providers in teacher wages and salaries. The effect is an ECE system that delivers inequitable and variable outcomes, outcomes that are directly contrary to government’s stated policy and hinder government’s ability to achieve its goals for education.

There is strong public support for ECE teachers to have pay parity. More than 15,000 people signed a petition last year calling for the House of Representatives to urge the Ministry of Education to ensure pay parity with primary teachers for all ECE teachers working in any licensed publicly funded provider. A pay parity campaign booklet set out key arguments and was a useful educational/ informational tool.

There is now also a political will for all ECE teachers to have pay parity. The Labour Party has given a pre-election promise that it will spend an extra $600 million over the next four years on boosting ECE teachers’ pay (it has not yet given a date for when pay parity will be achieved). The National Party has also promised to continue to lift minimum pay requirements for qualified ECE staff and it has promised to reduce the funding gap between kindergarten and non-kindergarten ECE services.

But at the political level, the ease and speed with which pay parity can be implemented, and the urgency and the need to prioritise this for the wellbeing of the sector and children, is not well understood. Also not well understood is that closing the funding gap will not bring pay parity for teachers as service providers may use increased funding for other purposes – therefore there also needs to be accountability for how funding is spent.

Key facts on pay parity

  1. The Ministry of Education has the ability to implement pay parity using the mechanism of salary attestation and it can do this as soon as the next funding round.
  2. There are ECE service providers who agree to be accountable for matching wages to pay parity rates to receive funding at the same level as kindergartens.
  3. The effects of an absence of pay parity for many ECE teachers is harmful to the quality of ECE for children and outcomes.
  4. Government has a dominant influence on what teachers are paid in all ECE services, including privately-owned services.
  5. The question to ask is not how much it will cost to fund pay parity, but when will the use of teachers as cheap labour to make cost savings in ECE, end?
  6. The ECE teacher remuneration 2020 survey results provide insights for the ministry to use in its advice to the minister and government.
  7. Continuing to provide funding for ECE teachers to have pay parity only if they are employed by a Free Kindergarten Association is an unbalanced and unjust approach. It is also contrary to the provision of ‘equity from the start’ – a key value of the Early Learning Action Plan.

Salary attestation is the tool available to the MoE to implement pay parity

The Ministry of Education has the ability to implement pay parity using the mechanism of salary attestation and it can do this as soon as the next funding round.

Pay parity for all ECE teachers can be put in place easily and efficiently. IT system changes would not be necessary since the Ministry of Education already has a funding mechanism for service provider accountability in place. ‘Salary attestation’ is the method used by the ministry to give assurance that service providers are paying at the bottom rate of the Kindergarten Teachers, Head Teachers and Senior Teachers’ Collective Agreement 2019-2022 (KTCA). 

It would be simple to replace the single salary rate with a salary scale for service providers to access funding at the higher (pay parity ‘kindergarten’) funding table rates. Making this change will give a strong incentive to service providers to lift pay rates and they will be accountable for paying their teachers at pay parity levels. 

Note: service providers do not need to be party to the kindergarten teachers’ collective agreement, or to any union agreement for that matter.

ECE service providers agree to be accountable

There are ECE service providers who agree to be accountable for matching wages to pay parity rates to receive funding at the same level as kindergartens

When asked why since 2011 there have been different funding rate tables for kindergarten and non-kindergarten teacher-led centres, the ministry explained that it was due to “the Government of the day deciding that it would not pass on the higher rates to education and care services if there was no assurance they were paying KTCA level salaries. (OIA request response by the Ministry of Education to James Lochead-Macmillan).

However, this was not the fault of service providers – the ministry had not required service providers to be accountable for matching school/kindergarten teacher salaries. When the 2011 decision was made, service providers were not asked if they would guarantee to pay their staff at KTCA rates. 

We asked early childhood service providers if they would provide such a guarantee. Four hundred and sixty-one teacher-led centres and 68 teacher-led home-based services agree to pay their teachers at KTCA level salaries in return for funding at the higher rates.  They agree to sign an attestation that they are paying at KTCA level salaries and provide the ministry with such financial information about their organisation as the ministry may reasonably request.

Assuming that the Ministry of Education did not mislead Cabinet in 2011 about the reason why the government should only fund centres at the higher rates that are bound by the KTCA, it should now inform the government that service providers who agree to be accountable for paying their teachers at KTCA salary rates cannot continue to be cut out of receiving the same funding.

The current situation is harming child outcomes

The effects of an absence of pay parity for many ECE teachers is harmful to the quality of ECE for children and outcomes

What is it that children need the most in early childhood education? It is to have teachers who are well trained and remunerated appropriately to provide high-quality early childcare and teaching.

The Organisation for Economic Cooperation and Development (OECD) has argued the need for countries to invest in improved training and qualifications since this affects the quality of ECE and with this, child development outcomes (“Starting Strong II” report, OECD, 2006). However, with improved training and qualifications comes demands for pay to be increased to reflect this.

Data from the NZ ECE teacher pay survey shows that low pay is a major factor in teachers frequently changing jobs and leaving the early childhood teaching profession.  What we see is that ECE services that provide pay parity attract and keep high quality teachers – these staff grow as a team and become highly experienced, high functioning, and cohesive teams. Because of this, teachers can constantly improve the benefits the service is able to provide for children and families from one year to the next. When this is not the case standards can more easily slip, children’s learning can fall between the cracks, and the teaching team can struggle to develop as time is taken for each new member to learn the way things are done.

In the international research literature on ECE quality, a stable staff is linked to positive outcomes in children and is a main indicator of quality (alongside group size, adult-child ratio, and trained teachers). Children who form strong caring reciprocal relationships with their teachers have improved outcomes. But, when staff turnover is high babies, toddlers and young children can struggle to form trusting caring relationships with their teachers. Constantly changing teachers means low quality education for children because it takes time to get to know each child well – their interests, needs, personalities, and learning dispositions.

Around 77% of all children are enrolled in teacher-led services that are not kindergartens. Without pay parity for ECE teachers, children attending ECE services cannot enjoy equitable experiences. All this means that the current funding regime for ECE drives outcomes that are directly contrary to government policy. Yet, the notion of ‘equity from the start’ is a key value of the early learning action plan.

Government is the dominant influence on what teachers are paid

When pay increases are given to school teachers and teachers employed by kindergarten associations, the same is not guaranteed for all other teachers with identical qualifications and meeting identical requirements for registration and a practising certificate with the Teaching Council. Kindergarten Associations are one of many ECE organisations that sit outside the public system. So, the situation is that the government relies on the goodwill and sacrifice of ECE teachers not employed in centres that are owned by kindergarten associations to accept lower wages.

When it comes to wages and conditions of work, employers can pass the buck to the government due to their funding being less than what kindergarten associations are paid to meet the costs of providing early childhood education and care. The unfortunate consequence of this is that teachers can find themselves bearing the brunt of tensions between government and employers over funding and this makes them vulnerable to exploitation.

The cost of funding pay parity is not the stumbling block

The question to ask is not how much it will cost to fund pay parity, but when will the use of teachers as cheap labour to make cost savings in ECE, end?

The Ministry of Education advised the government on 31 January 2011 that restricting the salary part of funding rates to only those services that were party to the KTCA would free up $20m per annum from the Budget package to meet costs arising from 20 Hours Free ECE and increasing participation previously paid for by parents.

It also advised that this should be a short-term measure only:

Providing a salary increase only to those services bound by the KTCA provides those services with higher funding rates, and could be seen as an untargeted and unfair price advantage. We would not recommend this as a long-term strategy.

The ministry needs to remind the government and repeat very clearly its advice that the funding change was planned as a short-term measure only, and that a reversal of this funding decision is now overdue.

The ECE teacher remuneration 2020 survey results provide insights

Key results and points arising from the 2020 teacher pay survey are as follows.

There were teaching staff being paid less than the minimum adult wage. There were trained and certificated teachers being paid less than the minimum wage set by the Ministry of Education for salary attestation. On average every teacher worked an additional four hours unpaid per week, just to get the work done that was required of them. Key reasons included understaffing in their service resulting in needing to work when not paid, parents being late to collect their children, other staff needing support, and not getting enough non-contact time to do child assessments, etc. From these findings the following questions arise:

  • Should such illegal practices continue to be condoned by the Ministry? If not, then what steps will the ministry take in its role of shaping the direction for early childhood services providers?
  • What policies can government put in place to better protect teaching staff in publicly-funded ECE services against exploitation?

The average wage of teachers who work in pay parity funded kindergartens and those who work in another ECE service is roughly the same for their first year of teaching. But after the first year of teaching the difference in pay increases and grows. This finding tells us two things:

  • Any increase in the salary attestation rate affecting only those teachers paid the minimum or in their first year of teaching, such as that which was delivered by Budget 2020, will not bring ECE teachers any closer to pay parity.
  • Pay parity would be achieved if service providers were required to pay all their qualified and certificated teaching staff as per the KTCA salary scale or the Unified Base Salary Scale for Trained Teachers (which the KTCA is based on).

There are regional differences in teacher pay, with teachers in Auckland, Waikato and Wellington getting more an hour on average than teachers in other regions. There is also a sizeable difference of around $2.00 an hour in wages between private and community owned non-kindergarten ECE services. These results raise a possibility that:

  • In some regions service providers may be able to afford to pay their staff more.
  • Some privately-owned services may be able to afford to pay their staff more.

Staff retention is a major issue. Around four out of every ten teaching staff want to leave their job: 19% were looking for a new (better) job in ECE and a further 20% or one-fifth of all teachers were looking to leave the profession.

The results show that improving pay would help to improve staff retention in non-kindergarten services.  

  • Pay parity would mean fewer staff will experience the stress of trying to cope when team members leave and when the service is left short-staffed, thereby influencing their choice to stay in their job instead of leave for a job that pays better and is less stressful.
  • Pay parity would result in a drop in the proportion of staff looking to leave the profession and would help to retain government investment in the training of these teachers.

Enabling only ‘kindergarten’ employed teachers to have pay parity is unjust

The ECE sector is artificially divided by the ministry into services which are funded at the ‘kindergarten’ rate and those which are not.  It has been argued, by David Haynes, that this division is both illegal and contrary to the ministry’s fundamental public law obligation to always act fairly and reasonably. It also renders impossible the provision of ‘equity from the start’ which is a key value of the Early Learning Action plan.

There is no justification for providing higher funding rates to ‘free kindergartens’ and not extending the same to other teacher-led centres, when in fact the ‘free kindergarten’ as it was known as a part-day public preschool education service is now akin to the moa – extinct. Indeed, in the eyes of the ECE licensing regime ‘a free kindergarten’ is akin to the unicorn – mythical. Today, all teacher-led centres must meet the same regulations and licensing criteria, and kindergartens can be fee charging services just like other centres. The regulations on which a “Free Kindergarten” could be licensed as a “Free Kindergarten” no longer exist.

Since the nature of the service is the same and teacher qualifications and professional requirements are identical, the same salary component funding increases should be applied to all teacher-led centres. It is wrong to withhold salary component funding increases for pay parity to some services that commit to paying their teaching staff at pay parity rates, while giving to others (kindergartens).

It is not logical to single out teachers who work in kindergartens and provide only them with pay parity. Parents from ECE services that are not owned by Free Kindergartens Associations are tax payers as well, and their children deserve the same funding for their teacher wages as well as those children who are in kindergartens.

Evidence on Pay Parity – Summary

The Ministry of Education isthe Government’s lead advisor on New Zealand’s education system.” It shapes “direction for education agencies and providers” and it contributes “to the Government’s goals for education.”  

It is incumbent on the Ministry to advise government and do the work that needs to be done to see that pay parity is delivered for all qualified and certificated teachers working in ECE.  Pay parity must be implemented urgently.

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