Horrible Report on Teachers Salaries - Declawed (somewhat)

I'm writing on a topic that was in the news! Allright! I celebrate this fact, since I've been reading other bloggers do this with a fair degree of envy.. "They've SO got their shit together", I'd figuratively say, "they're well enough informed and opinionated to draw out a complete theory, analysis and/or rebuttal in an organized, linear fashion". Now I'm doing it too... well, trying anyway..

Ynet burst out with a report revealing the ostensibly shameful salaries teachers earn in this country (Israel, in case you've been napping). The reader shockingly learns that an Israeli teacher in the major cities earns "half of what a teacher in Canada does, a third of one in Germany, and almost a sixth!! of a Swiss teacher's salary". Now first of all, let me be the first to agree that teachers salaries are, without question, pitifully low, and that this does indeed indicate a very real mistake in our national priorities. The horrifics and injustices of our educational system have been covered at length in the media, and I need not elaborate.


This report, however, is fundamentally flawed; and while I have a background in economics (and media..and music, while we're at it), it doesn't take a single econ lesson to understand why. For one thing, it doesn't adjust for prices, or the "value of money", so to speak, in each country.

What does $100 mean? If you were living in, say, Zaire, you could probably buy a mansion and a masseuse for life for around $100. In London, this will buy you a bite-sized muffin and maybe a candy wrapper (well, it sure felt that way when I was there). So by their same calculation, I'm sure you could find an Israeli teacher earns several times more, probably by a factor well northwards of ten, than a teacher in Burundi.. we just know that doesn't mean much. These ratios have to be tempered somewhat so as to be comparable in any meaningful way. Now how we temper figures like these can get tricky - do we use the ratio of consumer prices? or possibly GDP per capita? or average wage, or minimum wage, or cost of building materials, or minimal health package.. What factors in to comparing the meaning of money or standards of living is immensely complicated, and quite a heated topic for argument among economists.

But luckily, there is some kind of usable standard to compare money, that most economists do agree on. It's not perfect, it's quite "mainstream" if you will, but it's something.. it's called PPP (Purchasing Power Parity). I'll skip the econ lesson, let's just say it's something like a measurement of the average prices of "everything" in a given country. So that if I earn 100$ in a country where the PPP is half that of another, I can buy twice as much as in the other country.

So, if we apply the PPP ratios to the first big figure, we'll find that the salary the Israeli is earning isn't worth 50% of what a Canadian is, it's effectively 78%. Big difference! The six-fold ratio given for Swiss teachers of Israelis is trimmed to four-fold by this same calculation; the three-fold ratio for German teachers to a little below 2 and a half.

So, it's looking a little better now, but still not great, I know. And this is no surprise, since we already know the education system here is going to shit. But, bear in mind all we've done is level the playing field a bit so that we can even begin to talk about the same dollar when comparing a salary.

What we still haven't adjusted for is the state of the local economy. I mean, all Israel can realistically try to do is bump teachers up on the list of national priorities, but we can't just miraculously start paying them like the Swiss.. So we have to ask how a teacher ranks, salary-wise, compared to other employees in his or her own country. We can't really do much more than that. Remember the average Israeli plain earns a lot less that a German. If Israel just decided "hey, we have to match wages to those in Europe", it would be tantamount to a 5-year-old declaring he can now play basketball as well as Michael Jordan. Not happening.

So I compared German and Israeli teachers to their countries' average salary. This is deeply flawed, and wouldn't get me a passing grade in Elementary Economics for Hedgehogs, but it's something, it's a heuristic. the Israeli teacher is earning 69% of his country's average salary, and the German earns 87%*. Not quite the three-fold difference they were talking about, is it?

All in all Israeli teachers, compared to other workers in Israel, are a little worse off than teachers in Germany, but not by a factor anywhere near three! Feel free to do the same with Switzerland and Canada - It may not seem that way, but I have a life..

The real issue here is that Israel as a whole may be approaching third-world-country status, and that's another kettle of fish entirely. But the degree to which Israeli teachers are screwed salary-wise, and they are screwed, is significantly less than the headline would have you believe.


* The stats given in the article present an Israeli teacher earning the equivalent of $1117 a month, and a German earning $3575. Yet the average salaried employee in Israel earns $1621, whereas the German earns $4113.