Herald misses the key element – GDP

The Herald reports:

New Zealand teachers are some of the lowest paid in the OECD, despite working more hours than most of their overseas counterparts, an international report reveals.

The annual at a Glance report, which compares the systems of the 29 countries in the Organisation for Economic Co-operation and Development, found that after 15 years’ experience, a New Zealand teacher made $10,000 a year less than OECD counterparts on average.

The entire article is peppered with stats designed to give the impression our teachers are underpaid. It reads like a and press release. But they have missed out the most important stat – our GDP. I blogged this in response last week, and need to repeat it again:

I am not surprised teachers in Australia get paid more. Everyone in Australia gets paid more – they are a wealthier country. The solution to this problem is to increase productivity growth.

The better comparison between countries is how much do teachers get paid, compared to the average wage, or how much does a country spend on education as a percentage of GDP.

The OECD report answers the latter.

In Australia 3.5% of GDP is spent on non-tertiary education, and in New Zealand it is 4.0%. So we are already paying more as a percentage of GDP, than Australia. Hence the solution is to increase GDP, not to increase the share spent on education.

Only three OECD countries spend a higher percentage of GDP on non-tertiary education than New Zealand.

So all these stats about how teachers are paid less than the OECD average – it is because we earn less than the OECD average, and it is basic economic that you have to generate the wealth to spend it.

What would be good is if someone did some proper comparisons, such as what do NZ teachers get paid, compared to the average wage for their country and/or what do teachers get paid compared to the average GDP per capita.

The OECD doesn’t seem to have up to date average wage data for NZ, but there is good data on GDP per capita. So let’s compare teacher salaries to GDP per capita. Taking a primary teacher with 15 years experience, the data is:

  • Australia $46,096 salary vs $38,911 GDP per capita = 118% ratio
  • UK/England $44,630 vs $34,619 = 129%
  • France $31,927 vs $33,679 = 95%
  • Luxembourg $67,723 vs $78,395 = 86%
  • US $44,172 vs $46,381 = 95%
  • NZ $38,412 vs $26,708 = 144%
  • OECD $39,426 vs $35,138 = 112%

So in fact New Zealand is paying primary teachers with 15 years experience far more, compared to our national wealth, than the OECD average, and than Australia, the US, UK, US, France etc.

Even if ones takes secondary teachers with 15 years experience, NZ at 144% pays far more relative to national wealth than even Luxembourg. So bear this in mind as you read:

They also started on an average of $10,000 less than Australian counterparts and earned up to $82,000 less than those in top-paying Luxembourg.

Again – that is because those countries are far wealthier.

New Zealand teachers get paid more, than almost any other country, compared to GDP per capita, and almost inevitably the average wage.

And if you think that this is not the relevant comparison, then you probably think money grows on trees.

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