Public Sector Pay
VIEWS FROM OUTSIDE THE APIARY: IAN FLETCHER
How should we think about pay for nurses and other health care workers, or teachers, or police? The Government has been engaged with these groups for the past five years, and yet, in health, a sense of crisis remains. How should we think about these services, and how much should we be prepared to pay them?
Pay has three dimensions: economic, social and psychological. They all matter. At an economic level, people need to be paid enough to meet expectations about what sort of life a nurse or teacher or policeman can afford. Socially, pay is part of the way society expresses value – especially relative value. And psychologically, decent pay is part of the self-respect I certainly hope people doing this work feel about themselves and the careers they have chosen.
There’s also a labour market effect: a lot of health care workers at all levels in New Zealand have come from overseas, presumably in the hope of a better deal. Many New Zealand health care workers move to Australia or the UK, in the hope of better pay and conditions (quite likely in Australia; the UK experience might be better seen as part of one’s OE). Teaching abroad is possible, but it may be harder to get qualifications recognised. Other public sector professionals, like police officers and military personnel, can and do transfer too. There is also a market for senior executives (I’ve worked for five different governments as a senior public servant), but that lies outside the scope of this analysis.
I’ve included police and teachers in this because it shows some contrasts. Police pay is believed to be good. It seems starting pay for police in New Zealand is about $70,000. Registered Nurses start at around $61,000. This is lower, despite longer, more expensive degree-level training. Other, less-qualified health workers get quite a lot less. Primary teachers start on $48-52,000, again after a three- or four-year degree programme. It takes several years to get up to police or registered nurse starting pay. In New Zealand, average pay is around $56,000 per year.
On this analysis, well-qualified nurses earn above average (other health workers significantly less), while primary teachers start below the average. Yet, the focus of public debate is on healthcare, where there seem to be chronic shortages of staff. Is it pay?
Only partly. Globally, nurses are in short supply. The World Health Organisation estimates the world is short 5.9 million nurses. The current global nursing workforce is 28 million, so it’s quite a big shortfall. In many places, more nurses are leaving than being trained (except the US, where the lack of minimum staffing levels mean there aren’t enough jobs for graduates). New Zealand is already very dependent on foreign trained health care workers. In fact, recent data suggests that only Chile has a greater proportion of foreign-trained nurses among recent recruits.
And then there’s Australia. We underestimate how well-connected the trans-Tasman labour market is, so New Zealand workers in many fields respond willingly and quickly to shifts in demand in Australia. Health care delivery is a state government responsibly in Australia, and state governments take it seriously. The result is well-resourced public health care systems, a flourishing private health provision sector (there are tax incentives to have health insurance) and generally higher pay through the workforce. For many New Zealand trained or resident nurses and other health professionals, that’s all attractive.
I think it’s both pay and working conditions that drive choice here. It’s clear that the New Zealand public health system, like many around the world, is under strain from constant high demand (think Covid then winter flu all on top of an aging population). Healthcare workers will rightly want adequate pay, but also enough support to get time off for themselves, adequate professional resources, and good and supportive management.
So, what does that mean? For Police, and teachers, there seem to be very different experiences (police paid well; teachers paid poorly), but neither system has an air of staffing crisis. Healthcare seems different: persistent crises, staff shortages, some very low pay for some, the constant appeal of Australia all contribute to a system that seems under more and more pressure and coping badly.
More pay might be part of the answer but just getting more qualified staff and keeping them seems like a bigger issue. Immigration may not work well (every developed country is trying that, and we are not as attractive as we were). So, some old-fashioned workforce planning might be needed, including subsidising degrees, accompanied by a serious effort to get more resources into the health system overall. I think we’ve proved we can’t do it on the cheap. Now we must prove we can do it well, and we must be prepared to fund accordingly.
Ian Fletcher is a former chief executive of the UK Patents Office, free trade negotiator with the European Commission, biosecurity expert for the Queensland government and head of New Zealand’s security agency. These days he is a commercial flower grower in the Wairarapa and consultant to the apiculture industry with NZ Beekeeping Inc and chairperson of the Manuka Honey Appellation Society.