Labour and the sudden policy of making financial literacy teaching in school compulsory.

In another grasping at straws exercise within the last week the Prime Minister (the former worst ever Minister of Education) and the current (and second worst ever) Minister of Education (Tinetti) suddenly announced that the teaching of “Financial Literacy” from 2025 will be compulsory.

Despite Labour driving down qualification outcomes, increasing the percentage of NEETS (not in education, employment or training), and dropping school attendance through the floor – QUALIFICATIONS COUNT for earning. So, the first things that young people and families need to know for financial literacy and health are below. They can be summarised as stay at school, go to school, work hard, be nice to your mum and dad. But https://www.educationcounts.govt.nz/publications/80898/education-and-earnings adds great detail.

• Getting a school qualification makes a difference to how much you will earn. If you left school with NCEA Level 2, you can to expect to be earning twice as much, nine years later, as someone who left school when you did, but who had no qualifications.
• Staying on at school an extra year and entering the workforce with University Entrance (UE) gives you 25% more earnings, on average, than leaving school with just NCEA Level 2.

Non-degree tertiary qualifications

• So long as your tertiary qualification is higher than your school qualification, you can expect, on average, to have higher earnings. A Level 1 or 2 post-school certificate has the same earnings benefits as NCEA Level 1, on average, but 60% to 70% more benefit than no school qualification, 20% less benefit than NCEA Level 2, and 10% less benefit than a Level 3 post-school certificate.
• Completing a Level 4 certificate makes a difference. Nine years after leaving school, you can expect to earn 10% to 15% more than someone of your age with NCEA Level 2 as their highest qualification. Only those who completed a degree will be earning more per year. A large proportion of Level 4 qualifications are trade-oriented, and demand for trade-related skills and services has been high over the period covered by these results.

Degree qualifications

• Degree and higher-level education gives you higher annual earnings as well as higher earnings growth. Nine years after leaving school, you’ll expect to be earning 15% to 20% more than someone of your age who finished their education with UE, and 40% to 50% more than someone who finished with NCEA Level 2.
• But having spent less time in the workforce, the total cumulative earnings of people with degrees will still be catching up with those who finished their education with NCEA Level 2, UE, or a Level 4 certificate. The recent data – i.e. during a period of good labour market conditions – suggests it might take 12 years for the cumulative earnings of those that did degrees to overtake those of their peers who did a Level 4 certificate, and 10 or 11 years to overtake those who finished their education with NCEA Level 2 or UE.

Other messages

• Education contributes more to earnings through its ability to obtain and sustain employment over time. Lower employment accounts for much of the earnings disadvantage of people with no qualifications. But even when comparing just people in employment, there is still a benefit for higher qualifications. For example, those in employment with a degree, nine years after leaving school still earn 25% to 30% more than those in employment with NCEA Level 2 as their highest qualification.
• Field of study has a big influence on earnings. Average annual earnings benefits five years after graduation for a young degree graduate can vary by 30% or more (or around $20,000), depending on their field of study.

If you want a genuinely flourishing society and workforce educating young people well is a great start. It might help people on a job seekers benefit to budget – for a month of two – but it is hardly a future to aspire to.

Alwyn Poole (alwyn.poole@gmail.com)
www.innovativeeducation.co.nz
www.cambridgefestivalofsport.co.nz
www.alwynpoole.substack.com