Teachers pay versus economic reality

Teachers are celebrating after the Supreme Court upheld the lower courts award of over 50 per cent salary increment. Let us remove the excitement part of the raise and look at the economics behind it. What does this raise mean to the national economy, both long term and short term?

What of the teaching profession, education sector, the civil service and the economy? To the teachers’ union leaders, it is a moment of pride and a justification for the dues members pay every month. That victory increases the probability that these leaders will be re-elected for another term. They could also translate that victory into a platform for bigger political offices; 2017 is not far.

The government must look for the money to pay teachers long after budget despite bold attempts to reduce the wage bill. There is a strongly held belief that the government cannot run out of money. The government could transfer money from other ministries and use it to pay teachers, it could borrow from either local or international markets or negotiate to pay teachers in installments, an option likely to be resisted. Interestingly, teachers are not bothered about the source of money.

Whichever option, it will mean reallocation of resources. Economists will ask if that is the optimal or best allocation. Will Sh17 billion have a better impact on the economy in the teachers’ pockets than elsewhere? Politically speaking, yes, because teachers are everywhere in the country and have some residue influence. Economically, it will depend on what the teachers will do with the money; will they invest it or squander it?

An interesting observation would be if more people will be attracted to teaching profession because of better pay. Shall we have more KCSE candidates putting B.Ed as first choice despite the shortage of jobs for such graduates?

Economically speaking, because of over production of B.Ed graduates, salaries of teachers should be going down- thank the unions. In the long run, the raise will energise other government employees to agitate for salary raises, based on activism not higher productivity. Interestingly, the productivity of the most strike prone professions is very hard to measure. How do you measure the productivity of a teacher? Passing rate of the students is not good enough.

What if the students are self-motivated because of their background or are innately intelligence? What if the students decided to work hard because they lost faith in their teacher? How do you measure the productivity of a medical doctor? Number of patients healed? Suppose, faith healing is real? Suppose the body recovers naturally? The same applies to lawyers.

I find their profession most lucrative, you pay them irrespective of whether you lose or win a case. Luckily, with time, the market penalises you if you keep losing cases. The same applies to doctors. Does teaching suffer the fate similar to doctors and lawyers; after all they are noble professions? Do customers vote for the teachers using their money? That is happening, through private schools. Without ranking, how will parents know if the schools are performing? Some have asked loudly why schools formerly run by missionaries, without a regular pay are now shadows of themselves. Can you name a few...?

With teachers’ salary raise, this will embolden other government employees to demand higher salaries, through activism. They can always cite the elected leaders. Activism is a more effective method, and more rewarding. Whether you are a hard working or lazy teacher, you will get a pay rise; they say a rising tide raises all the boats.

Why wait for promotion based on hard work when taking to the streets (away from work!) will give you a better pay rise?When activism takes over productivity, cost of labour goes up and the country becomes uncompetitive. Remember that for parents, education is already the single most expensive item in their budget. We can’t call in investors then threaten them with pay raises without commensurate productivity.

When we pay people more money without productivity, we expect inflation and its evils. Do we want to be known as the country of strikes? Do you want to invest in a country where courts, not productivity decide the salary increment of your workers? While we could argue this is public sector, the teachers’ precedence can be used elsewhere. They are following a familiar path nowadays, perhaps chartered by 2010 constitution. Courts are getting more clout, not just in labour disputes, but also in personal matters like divorces. We are getting Americanized; after all we copied our Constitution from there.

Some could ask in whispers where is Salaries and remuneration commission? Will this raise driven by activism backfire? It happened in the USA. The unions were very strong in Northern US particularly in auto manufacturing heart land near Detroit. They raised the cost of car production so high that the manufacturers relocated to the South. Today, Toyota, Mercedes, Nissan and Hyundai have plants in the southern USA in Mississippi, Alabama, Georgia and Texas, which are less unionised.For the Kenyan teachers, parents will keep shifting their kids to private schools which are less unionised. Some could argue that teachers are paid by the government and parents will not feel the effect. The government could be tempted to shift money from other uses like development and pay teachers with parents most likely taking the slack. Kenya’s affluent long left the public education system.

Could this crisis tempt the national government to devolve education and leave the trouble of paying teachers to counties? What is the way out? The teachers’ strikes, doctors’ strikes and other strikes is a clear indicator that the constitution never solved all our problems and a lot needs to be done. Our economic system cannot be written down like our Constitution, it keeps evolving driven by innovations like M-Pesa and international linkages.

The economic system has more players than the few MPs or senators, and MCAs. It is expected to be more “chaotic’ but more creative. What is M-Pesa equivalent in politics?

Every sector needs to put its economics in order; after all, the economy was next natural front after the constitution. The basic question in education is how to incentive work, so that work is not just about money, but about meaning and purpose in life, like the missionaries or like the American protestant work ethics. Or even the Asian values, where working for the country is seen as part of national patriotism.

It is possible to come up with a well thought out system that rewards hard workers and penalises lazy workers. Did I hear of performance contracting in our schools? The options open to incentivising teaching and other noble professions are not politically palatable like giving teachers renewable contracts instead of permanent and pensionable jobs. In the US where we heavily borrowed our Constitution, contracts have made people very productive.

While that might lead to exploitation, it leads to higher productivity as workers seek new contracts through higher productivity. Without a system of rewards that factor in productivity, taking to the streets and courts will remain the methods of choice in getting salary raises. Finally, we should not blame teachers for pursuing their interests...

The writer is a senior lecturer, University of Nairobi School of Business