Paying the education wage bill price
Spending on education necessities is being sacrificed to fund a bloated wage bill. In the past three years, provincial education departments have increased spending on personnel by 22.3%, despite shedding 2,800 jobs
Over the past three years provincial education departments have quietly shed 2,800 jobs, or 0.5% of their workforce, yet increased their collective spending on personnel by a whopping 22.3%, according to analysis by the Financial Mail.
Their total compensation for employees, which included nonteaching personnel, rose from R135.6bn in 2013/2014 to R165.9bn in 2016/2017, while the head count fell from 519,817 to 517,018, according to the estimates of provincial revenue and expenditure published by treasury.
Treasury’s own calculations tell a similar story: in 2009/2010 there were 404,733 full-time equivalent teachers earning an average of R317,028/year (in real 2016 rand); seven years later, there were 404,281 teachers earning an average of R374,450.
The soaring wage bill is already crowding out spending on necessities such as textbooks. If the trend continues — a real prospect, given the clout of the SA Democratic Teachers Union (Sadtu) in public sector wage talks — it could reverse the slender gains the country has made in the quality of schooling over the past decade.
"SA has improved significantly, albeit off a very low base, in international tests of numeracy and literacy," says Gabrielle Wills, from the Research on Socio-Economic Policy unit at Stellenbosch University. "However, above-inflation wage increases in an increasingly fiscally constrained environment present a notable threat to sustained improvements."
The lion’s share of provincial education budgets is spent on personnel, most of whom are teachers, with allocations ranging from 82.4% of the total in KwaZulu Natal to 72.7% in Gauteng, according to treasury figures for 2016/2017.
In a constrained budget environment, it is tempting for provinces not to fill expensive managerial positions and other vacant posts.
"Due to an ageing teacher workforce and a trend towards early retirement, there are increasing openings in school management team posts ... It is important that these are not left vacant as provinces attempt to manage down their compensation budgets," says Wills, noting that managerial staff play a vital role in monitoring schools, offering teacher support and providing overall leadership.
Stellenbosch University senior researcher Nic Spaull says SA’s history of spending too high a proportion of the budget on personnel is most acute in poor provinces with weak budgeting processes. "In many instances provinces start with the teachers they have and figure out where to get the money from rather than figuring out how much money they have and then how many teachers they can afford," he says.
Sadtu general secretary Maluleke Mugwena says the problem stems from the pay structure that was introduced to end a month-long public sector strike in 2007. This included an "occupation-specific dispensation", which was not fully budgeted for.
"Education is labour intensive and the current budgetary requirements are not based on what the school requires to function," he says. "If we were talking about an equitable budget we would not be having teachers resigning to access their pension funds. If they were paid a living wage they would not be indebted and house-less."
Economist Mike Schussler says the 2007 pay structure introduced so many promotional notches per salary level that a teacher can stay on the same salary level and get an extra percent every year for 20 years, over and above the inflation-linked pay increases nailed down in each wage settlement.
As treasury noted in the October medium-term budget policy statement, these progressions were intended to reward performance, but they have become largely automatic.
"All our state and state-related employees are out of sync. In the UK you would get about an 8% premium for working for the state; here it is about 22%," says Schussler.
In this low-growth economic environment, government should make hard decisions about civil servant pay, he says. "We need a situation where wage increases are kept below inflation, probably for a decade."
That kind of approach is unlikely to go down well with the unions, who tabled a demand for salary increases of 10%-12% in October. Treasury made provision for an annual increase of just 7.2% over the next three years in the medium-term spending framework and called for restraint in the current round of public sector wage negotiations.
Unions are unimpressed with treasury’s line. "Government is fully aware that executive salaries in state-owned enterprises and other state organs are huge," says Mugwena. "The bloated bureaucracy is not sustainable. We expect treasury to attend to this and stop blaming those at the coalface ... who are paid peanuts."