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Insights 14: 26 April 2019
Read: Eric Crampton writes on Newsroom about coalition politics and fobbing off the blame
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Pity the poor primary teachers
Roger Partridge | Chairman |
The primary teachers’ union, NZEI Te Riu Roa, has called a series of nationwide meetings to decide on industrial action to take place early next month. NZEI proposes primary teachers “work to rule” from 15 May, culminating in a national strike on 29 May.

Despite the disruption this action would cause, teachers appear to have public sentiment on their side.

It is easy to understand why. Primary teachers perform a critical role in educating our children. Yet this is not reflected in their earnings. Over the past two decades, increases in primary teachers’ salaries have lagged median incomes by approximately 25%. This is despite teachers being highly unionised and their terms and conditions of pay being covered by a collective agreement.

In 1998, a beginning primary teacher earned $31,000, which was 15% more than the median worker. A teacher at the top of the primary teachers’ salary scale earned $47,100 (75% more). Today, a beginning primary teacher earns $49,600, which is a shade less than the median worker. And a primary teacher at the top of the salary scale now earns $75,949 (only 43% more).

Of course, there is a difference between how the median worker and a primary teacher are paid. The starting teacher salary is on par with many other professions (accountancy, engineering, law, among others). But unlike teachers, the best among other professions can go on to earn salaries several times those earned by graduates starting their careers.

For primary teachers, things are different. Their union-negotiated collective agreement links pay rises to years of service, rather than to ability or performance. And the pay scale tops out after just seven yearly increments.

Perhaps that is the rub for primary teachers. A union-negotiated pay scale requiring all to be paid alike, regardless of ability, with fixed service-based pay adjustments is bound to limit how much teachers can earn. Teachers’ salaries are not modest despite their union coverage and collective agreement, but because of it.

Pity the poor teachers – or at least the best of them –   who are penalised by a one-size-fits-all collective agreement.

Yet, there may be some solace on the horizon for the teachers. It comes from an unexpected quarter. The government is considering recommendations from the Fair Pay Agreement Working Group to introduce compulsory union-led collective bargaining for other occupations. While this will not solve the primary teachers’ pay claims, before long teachers may find themselves in good company. And then we may be pitying the median worker too.

Pricing our way out
Dr Patrick Carvalho | Research Fellow |
This year’s close alignment of Easter and Anzac public holidays translated into 10 days of joy, family time and… congestion – with the New Zealand Traffic Agency (NZTA) issuing multiple heavy traffic warnings across the nation.

Unfortunately, traffic jams are not restricted to holiday seasons in New Zealand.

Widespread congestion in our urban centres is the new normal all year round, clogging “the lifeblood of community and commerce”.

Auckland, according to the Tomtom Traffic Index, is ranked among the top 40 congested cities in the world, with each driver idling on average an extra 45 minutes per day on busy roads (i.e. 172 hours of wasted hours in traffic per year).

Sluggish trips also frustrate commuters in Wellington (43 minutes per day in extra travel time), Christchurch (29 minutes), Hamilton (27 minutes), Tauranga (23 minutes), and Dunedin (21 minutes).

NZTA suggests traffic jams cost our economy more than $1.25 billion per year, while also contributing to higher levels of pollution and road crashes.

The good news is that a well-tested solution to jammed traffic exists.

The science behind congested streets is not hard to grasp: unchecked, the demand for road space in big cities generally outstrips supply.

To fix the congestion problem, cities must offer suitable transport options, while requiring users to pay the full costs of their road use.

This solution is at the heart of road pricing, which harnesses the power of markets to adequately address traffic congestion while enabling a full range of transport choices.

In other words, instead of Soviet-style rationing of road space by widespread queuing, congestion charges would encourage commuters to find trip alternatives such as looking for other travel times, routes and transport modes. In return, revenue from congestion levies should improve the supply of travel options.

Road pricing is not a new concept, with close to a hundred years of academic research backing it. Several countries – including the United States, Britain, Singapore, Canada, Germany, Japan, Sweden and Norway – have already implemented a range of road pricing schemes, showcasing both success stories as well as lessons.

New Zealand should follow international best-practice, starting with a national conversation about a road pricing model that suits us best.

In the meantime, safe travels as you drive home from the holidays – and be prepared for congested roads then and beyond.

A parody of a Treasury
Dr Eric Crampton | Chief Economist |
“Without a winking smiley or other blatant display of humor, it is utterly impossible to parody a Creationist in such a way that someone won’t mistake it for the genuine article.” Poe’s Law warns that without strong warnings, parody will confuse people.

We occasionally get into a bit of a pickle with the third column in our Insights newsletter.

In this spot, we take the opportunity to have some fun – a light-hearted take on the week’s events; a fun anecdote that sheds light on the human condition; or even a parody of current policy as warning of where things might yet lead.

It is the last one that occasionally causes unrest. Out of context, it can be hard to identify parody. In its traditional third position in the newsletter, it works – for subscribers who know what to expect. Shared on the web on its own, out of context, it can be harder to tell – as suggested by Poe’s Law.

This time, though, it is Treasury that has managed to confuse everyone.

Last week, Treasury ran a gaming session at its offices at Number One The Terrace. The advertising for the event, in hindsight, was clearly parody. “Imagine surprising Aotearoa with a strain of compassion so delightful that it re-wires our collective consciousness!”

The invitation encouraged attendees to play the Heartwork Wellbeing Card Game – designed, according to the advertising, to help people tap into their sun and moon feelings to create win-win-win outcomes. Treasury Chief Operating Officer Fiona Ross and Treasury Manager Strategy and Performance David Dougherty were to be in attendance, with Ross explaining what she had been learning from using the cards as Chief Operating Officer.

All of it was clearly satire of the darkest imaginings of where Treasury’s wellbeing agenda might lead. And I fell for it, blogging some outrage about Treasury’s degeneration. Newshub also fell for it.

Once they had us all on the hook, Treasury upped the ante – they actually held the event. The Spinoff’s Danyl Mclauchlan attended and reported on it. Ross stayed in character throughout, even opening the event with gibberish: “We all know we live in a DEVUCA world.”

When our parody articles are confused for the real deal, we try to correct those who have been misled. We hope Treasury will soon clear everything up for us. Is this a Treasury parody, or the parody of a Treasury?

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