French teachers: a declining social status? edit

Despite substantial headline inflation, the French government is keeping a freeze on the civil servants’ wage index this year[1]. This of course is fueling anger among civil servants, in particular school teachers, and a feeling of declining social status. As proof of this decline, teachers typically compare their pay with the minimum wage. Whereas the starting pay of a “certified” secondary teacher was 2.2 as much as the minimum wage in in 1980, this ratio fell to 1.6 in 1990, 1.4 in 2000 and 1.2 in 2020[2]. These figures need to be nuanced, as they refer only to teachers’ “basic pay”; “pay complements” are low for teachers but they have been rising recently, especially for starting teachers in the past two years. But crucially, this ratio is mostly a testament of the strong progress of the French minimum wage in 40 years, thanks to numerous discretionary hikes on top of the standard price indexation, and the rest of wages did not follow up. One cannot vote for minimum wage hikes in order to bring low salaries closer to the median wage, and then deplore the flattening of the wage hierarchy as if it were unrelated.

If one compares the starting wage of a certified teacher with the median wage, the ratio was about 100% in 1980, and is now around 75%[3]. The fall is very real, but not as apocalyptic. The decline in teachers’ wage and social status is real, but it needs to be measured correctly in order to be addressed. The fall in teachers’ wage can be partially attributed to economic structural factors, but also to reasons common to the structure of the French civil service and to teachers’ specific explanations.

Structural economic factors

Structural economic factors first. As teachers’ pay is set by the government, it is tempting to think that it is only a political decision, unrelated to the law of supply and demand. There is obviously scope for political decisions, but these decisions are only deviations, up or down. To get a sense of the decline relative to the private sector, one needs to look at economics factors, and how much they contribute. The first difference between 1980 and today is the massive spread of higher education and the fall in the skill wage premium. What is rare is expansive, what is more abundant is less valued. Holding a bachelor’s or masters’ degree is far more common now than in 1980, and it cannot bring the same rank on the wage scale. It’s not specific to teachers: the entry salary for French university graduates was also partly caught up by the minimum wage since 1980, even falling in real terms in the 1990s[4]. Comparing teachers’ salary to the minimum wage is misleading; comparing it to the median wage or the wage of university graduates would show a less severe drop than compared to the minimum wage.

Another framework to analyze this decline is William Baumol’s cost disease mechanism. The driver of wage growth is productivity gains. But productivity gains are not evenly spread across jobs and sectors. With automation, the manpower needed to produce a ton of steel or build a road have shrunk in 40 or 100 years. On the other hand, the number of musicians in a symphonic orchestra, or teachers in a classroom, has not evolved. An employee that becomes more productive thanks to technological progress or machines can see a pay increase, but it is more difficult for jobs without productivity gains. In the private sector the adjustment is easy: if prices and wages rise more than productivity gains, demand can fall. Live shows (concerts, theatres) is much more of a luxury now than it was in 1900, but there has been a substitution towards cinemas, CD-ROMs and the internet, that were more productive. Workers with transferable skills can also enjoy pay increases, because competition from other sectors forces their wage to go up; low paid workers are eventually lifted by increases in the minimum wage: in advanced economies, hairdressers are much closer to the minimum wage now than 60 years ago. Teachers who can hardly switch to another sector (except in a few subjects), and who are far above the minimum wage, are much less protected against the wage consequence of stagnant productivity.

Of course health or education are not market goods like any other, but they are not insulated from this cost disease. The lack of productivity gains can be partially offset by an increase in the government’s education budget. But the government’s overall budget cannot be infinitely increased. It is bound by the willingness to pay taxes – and possibly the ability to finance deficits through debt. It is possible to offset the cost disease for small sectors with a constantly increasing budget or private sponsoring (like the Opera), but that is much harder in sectors that represent a sizable share of public spending, if other expenses are also growing fast. When one compares the salary of French and German teachers, one needs to take into account the smaller size of pensions and social spending in German public spending. This leaves more leeway for education spending, despite an overall smaller tax burden and budget.

Pay scales and pensions in the civil service

Another reason behind the poor starting salary of teachers is the pay scale system in the civil service, with a pension equal to 75% of the last basic salary. These pay scales date from a time when education was rare and seniority-based pay increases common in the private sector. But in the private sector, there are now very few jobs where one can expect to earn twice as much at the end of the career than at the start, for the sale role and without additional responsibilities. For French civil servants, especially teachers, this is still the case: high finishing salaries comes at the cost of ever lower starting ones.

This problem is worsened by the public pension system. Civil servants pensions are equal to 75% of their last basic salary (excluding pay complements), and are more generous than in the private sector (50% of the average salary over the best 25 years). For a given life expectancy, this is not necessarily shocking: civil servants trade off a slightly lower salary for a slightly higher pension. But with a higher life expectancy, if the super-gross salary (with employer pension contributions included) evolve at the same speed in the public and private sector, the net salary in the public sector will grow more slowly, because the burden of pension contribution grows faster for them. If one were to compare the super-gross starting salary of a teacher with the minimum wage, the ratio did not decline as much over time[5].

The public pension system has an additional side effect for teachers’ salaries: when the government is willing to give pay increases, unions typically ask that they take place for final salaries so that they count towards the pension. Instead of narrowing the gap between starting and final salaries, this tends to widen it. This is even worsened when careers are lengthened through a higher retirement age: new ranks are created in the pay scale, so that seniors continue progressing before getting into retirement. Pension contributions weigh heavily on private and public sector workers, but more heavily in the public sector, which implies a lower net wage. These heavy contributions will supposedly bring them a high pension in the future, but the sustainability of this system is not ensured; they might not benefit from the same generosity as their elders. In fact, public pensions – which are protected from inflation – are financed by contributions on basic pays – whose index has been frozen for years: this is a recipe for unsustainability and ever-increasing contribution rates. To normalize public pensions gradually, and improve the pay of the current civil servants by reducing employee and employer contributions, a partial freeze on public pensions is unavoidable. It is always tricky to let inflation eat away the purchasing power of current pensioners, but their standard of living – especially in the private sector – is higher in France than that of working households. The standard of living of French pensioners (including life expectancy) has seen a sizable upgrade in the past decade, and it is fair for them to contribute in part. The whole adjustment of the pension system cannot rely only on future pensioners.

Teacher-specific factors

Some factors behind this social decline are also specific to teachers. More than other civil servants, teachers are adamant about maintaining the current pay scales. While other civil servants more or less agree to the principle of pay complements as a compensation for the frozen basic pay, teachers don’t. When the ministry is willing to increase salaries somewhat, unions prefer to ask for more promotions at the end of the career. In 2016, a reform created the status of “exceptional teacher” for senior teachers. This is a marshal’s baton that brings a higher basic pay and hence a higher public pension. While it is supposed to be merit-based, unions would prefer it to be mostly seniority based and given to teachers one or two years before retiring, so that as many as possible end up with a higher pension. De facto, unions care much more about senior and retired teachers than juniors. But the juniors seem to accept this deal: it is as if work is a purgatory that one needs to suffer, while waiting for the paradise that retirement represents. It is an unsustainable Ponzi scheme, but they need it to keep their morale.

Part of the feeling of social status decline is probably also due to worsened working conditions (school violence, little support from the hierarchy, and weaker students than in the past). Secondary teaching is not as prestigious as it was In the 1960s, when students had a stronger and more homogenous level. Teaching in secondary schools has profoundly changed, yet it is not fully accounted in teachers’ official statuses and teaching duties. There is also an increasing amount of non-teaching administrative tasks that tend to increase teachers’ working time. Additionally, teachers did not enjoy the benefit of the reduced working time laws (the 35h week): their working time has not been reduced but did not get paid extra time, as opposed to other civil servants who got paid extra for not reducing their workweek.

How can we improve teachers’ job?

What can we do to improve teachers’ job? There are some non-budget aspects: violence around and inside schools, aggressions from parents and schoolkids, the lack of support from the administration… but pay also needs to be addressed. The spread of higher education and declining skill wage premium will not be reversed, but generating some productivity gains might not be impossible. With bigger schools, the scale effects would require less admin and support staff, with more to spend on teachers. The teaching load in French high schools is probably too ambitious, with very heavy student work weeks (every teaching constituency wants their subject to be compulsory throughout high school). Lighter schedules would give students more time for self-work, and require less teaching staff. Changing teaching methods, with less formal lectures, a wider use of textbooks and teaching material, and possibly more office hours, might also improve teaching with as much or less teachers as before. As is the case with most productivity gains, this will require investments in equipment and software.

More generally, France needs to reduce its redistribution spending to be able to invest again in the future: spending on pensions, health, or housing subsidies is not neutral at all in terms of fiscal space. With lower health and social spending, social contributions would be lower and allow to increase the government’s budget through other taxes. The size of local governments is also crucial, as they represent a sizable share of public expenditure, and the size of the local civil service keeps increasing. The pay scale for teachers will eventually need a profound upheaval, with higher starting salaries but possibly little progression after 15 or 20 years, and a lower pension. In the meantime, a freeze (at least partial) on pensions would reduce their drag on the pay of civil servants, and teachers in particular.

[1] In France, civil servants receive both a “basic salary” (traitement indiciaire) and “pay complements” (primes). The basic salary is the product of a position index (indice majoré) and a wage index (point d’indice). The position index reflects the nature of the job (largely the required level of education) and the seniority of the individual (with increases every 1 to 3 years), and the wage index is supposed to be adjusted for inflation, but can be frozen. Pay complements vary a lot from one type of civil servants to another (policemen and executive officers typically receive a lot of them, while teachers receive very little), but are largely statutory, not individually based. As it is very hard to reorganize the overall scale of position indices for civil servants, it is easier to apply a general freeze on the wage index, while increasing pay complements for specific jobs, in order to bypass nominal rigidities.

[2] Primary school teachers, junior professors in universities (maîtres de conférences) and “agrégés” secondary teachers would show a similar evolution of their starting wage relative to the minimum wage (in France there are two types of secondary teachers: “certified” teachers normally teach in middle schools (collèges) and “agrégés” in high schools (lycées). In reality both can teach in middle and high schools, but agrégés get paid more, for a slightly lower teaching load. As a result, their recruitment exam is more prestigious and competitive).

[3] The French minimum wage was around 45% of the median wage in 1980, 55% in 2000 and 63% now.

[4] Cf. Insee Références, édition 2018 – Fiches – l’insertion des jeunes (in French), graph 3, p.97.

[5] The super-gross salary, including the gross salary and employer contributions, is the labor cost for employers. In the private sector, employer pension contribution are around 13-15% of the gross wage, while they represent 74% of the basic pay (without pay complements) for some civil servants. It is not a true labor cost since the government is auto-insuring her pension risk: what is reported as pension contributions exactly offsets the cost of the current retired civil servants. The high rate partly reflects an unfavorable demographics, and high pensions for the currently retired. The system will not be as generous for currently active civil servants, when they retire.