Early learning teacher pay parity – our view

18 July 2020

We believe the current funding model is broken.

Even worthy attempts to address the widening pay gap between teachers in kindergartens and early learning centres has revealed systemic issues.

Here’s some background on this issue, our issues with the current approach, and what needs to happen to fix it.

Background

The pay gap between teachers in kindergartens and community and privately-owned early learning centres began in 2011 under Education Minister Anne Tolley, and has grown significantly since then.

The Early Childhood Council has consistently called for the gap to be closed – we believe that teachers doing the same job, with the same qualifications deserve the same pay.

We absolutely applaud the coalition’s government’s commitment to addressing the urgent and significant teacher pay parity issue – unfortunately, we have some concerns with how it’s rolling out and questions about the next steps.

First steps in 2020 Budget

The current Minister of Education, Hon Chris Hipkins has made addressing ECE teacher pay parity a key policy plank, and concurred with our calculations his policy would cost around $1.7 billion.

Reasonably, he’s said achieving ECE teacher pay parity could not happen all in one go, but in incremental steps starting in the May 2020 Budget.

The first step focussed on the lowest paid ECE teachers. All Teaching Council-registered and certificated teachers earning less than $49,862 (or $23.97 an hour) must receive a pay increase to at least that level.

Because teachers in ECE centres are paid through their employers, centre funding was increased to fund the improved teacher pay rates – it was at this point that the problems started.

The inital message

On 21 May, Chris Hipkins made it clear that:

  • Not all teachers would receive an increase
  • The increase was aimed at the lowest paid teachers
  • There would be more increases in future in order to achieve parity.

He further advised that centres who increased the pay rates for their lowest paid teachers, or already paid their team above the minimum rates, who were left with a small surplus from the funding increase, could put it toward deferred maintenance costs, resources for children or PD for their teaching team.

Devil in the detail

Simply, the funding increase didn’t cover the increased teacher pay costs for every centre.

Teacher pay rates increase by 9.6% from 1 July 2020, while centre funding went up by only 2.3% on the same date, with a further 1.6% not available until January 2021.

No matter how you add those up, there’s still a shortfall for some centres of almost 6%. These centres will need to make that up themselves from their own pockets.

The ECC has warned centres to do their sums carefully to ensure they’re aware of any shortfall.

Backtrack

Eight days after the original funding announcement, under what we assume was union pressure, Chris Hipkins’ view changed – now, the funding increase was to be used to give every teacher a pay rise, with no surplus left over for centres to re-invest.

The ECC has pushed back hard on this flip-flop. We believe the original plan was fairest for everyone and that, given the funding shortfall, the subsequent argument doesn’t hold water.

What’s the long term plan?

We accept a large goal like teacher pay parity takes a long-term solution.

The current teacher attestation model is based on four pay rate levels (Q1, Q2, Q3, and Q3+). Before, these levels reflected different pay rates that increased based on a teacher’s qualifications and experience. Under the new model, from 1 July 2020 the pay rate for each of the four categories is exactly the same: $49,862 (or $23.97 per hour).

We believe the next steps will be:

  • In the 2021 Budget, the Minister will announce increases in the Q2, Q3 and Q3+ rates, leaving Q1 at $49,862
  • The three top rates will likely be pegged at the same level, similar to the approach taken for 2020
  • Then, in 2022, another increase will apply to the Q3 and Q3+ rates, and by 2023 the final increase will apply to the Q3+ rate only.

This means that the Minister will claim to have achieved ECE teacher pay parity within the next term of government, assuming Labour is re-elected and his Cabinet colleagues agree to these increases.

Stumbling block one – kindergarten funding

We don’t believe this strategy will achieve true pay parity, because it assumes kindergarten teacher pay rates will stay static and allow centres to catch up.

We believe Kindergartens will seek to maintain their preferential funding at the top of the sector, with the Minister having to increase all attestation rates, including kindergarten corporations. True pay parity, under the current broken funding system is impossible.

Stumbling block two – centre viability

If the current under-funding of teacher pay increases, centres will close under increasing funding pressures. Not matching funding to pay increases eats away at centres’ viability.

If centres aren’t able to run profitably, like any small NZ business, they will close their doors, to the cost of education, jobs and communities. Profitability is not the same thing as profit; without profitability a service would close and no parent will thank the centre for having to shut its doors.

Our challenge

So, here’s our challenge for Education Minister Chris Hipkins:

  1. Share your long-term strategy to achieve ECE teacher pay parity
  2. How will you address funding falling short of the increased wage costs for some centres?
  3. How will you achieve ECE teacher pay parity while kindergarten corporations keep receiving increased funding and their own teacher rates increase to stay ahead of the sector?

A better plan

Even better, we believe the entire broken ECE funding model should be fixed – not just teacher pay rates – to make it fair for everyone. All teachers working across our sector deserve to be paid the same. That’s what pay parity is all about.

An ideal funding system needs to be focussed on children’s learning outcomes. With a funding system that incentivises quality, we can lift the whole sector.

Much of this work has been done, starting under the last government – it just needs to be finished.

With the Ministry and sector working together, we can redefine ECE funding with openness, transparency and fairness. We’re ready to get started.

Login to have your say