Controversy over teachers’ pay continues

During the first half of 2004, the pay of teachers and other education workers - a perennial issue of controversy and debate in Latvia - has again been high on the political and industrial relations agenda, even contributing to the fall of the government in February. The key issue is whether a legislative requirement that teachers should receive at least twice the national minimum wage can be met, given a tight state budget and a rising minimum wage.

Education workers' pay has long been a major theme in Latvian public and political debate, and has even contributed to bringing down governments (see below). A key issue has been restructuring the wages system for teachers working in 'general' educational institutions - there are 34,200 teaching staff employed at 'general schools' 7,900 in pre-school establishments.

Latvia has both public (run by local government) and private general educational institutions. Basic education at public educational institutions is free of charge, while at private institutions fees are levied. Education funding is split between the central state, local governments and the private sector. The wages of general education employees are paid from the state budget, except for some special areas of teaching where teachers’ wages are funded by local government. The state also partly funds the wages of teachers in private educational institutions. The central state or local governments (depending on which owns the particular educational institution) are responsible for the wages of maintenance and service personnel at educational institutions, while wages for such employees at private institutions must be covered by their owners.

During a period of economic difficulties in the early 1990s, state budgetary resources shrank dramatically and the wages of educational workers fell to very low levels. In 1994, the average wage in the education sector was 24% lower than the average in the economy as a whole. The low wages meant that the most able specialists left the schools and the quality of education suffered as a result.

The Educational and Scientific Workers Union (Latvijas izglītības un zinātnes darbinieku arodbiedrība, LIZDA) started campaigning to increase the wages of education workers. Since 1995, LIZDA has been demanding wage rises for education workers and organising strikes to support its claims. Its first victories were amendments to the Education Law that determined the principles of teachers’ wages, though these changes have not been put fully into effect (see below). Prior to the parliamentary elections in 2002, LIZDA concluded agreements with the political parties on increasing wages for teachers. The basis was consensus that if wages are not increased, educational institutions cannot find staff and education suffers, while teachers lose opportunities to improve their professional skills because they have to work more shifts. LIZDA argues that there has been no continuity in the work of governments (with the promises of previous governments not kept) and that the Education Law is not being respected.

LIZDA has used many forms of action in pursuit of its aims. It organises meetings with elected members of parliament, regularly makes proposals to the government and to legislators, and monitors their implementation. Immediately after the parliamentary elections in 2002, LIZDA called on its constituent organisations and members to write letters to state officials repeating its demands.

Changes to education workers' pay

Following their relentless demands, several strikes and the resignation of several education ministers due to these strikes, teachers obtained the adoption of gradual wage reform in the late 1990s. In 1998, the Education Law was amended to provide that the minimum monthly pay for a teacher with the lowest professional qualification working one shift a day may be no lower than double the statutory national monthly minimum wage (Article 53.2 of the law). This rule was intended to come into effect on 1 January 2000. The revised Law also set out stricter standards for the qualifications of education workers and provided that teachers’ wages must be determined in accordance with their qualifications. It was laid down that all teachers should have higher educational qualifications.

In order to implement the requirements of the Education Law, the government adopted a 'teachers’ wage increase schedule'. Implementation of the rule on the minimum pay for teachers (ie that it should be twice the national minimum wage) was deferred until 1 September 2003 by several amendments to the Education Law. Subsequently, the Ministry of Education and Science, the Ministry of Finance, the Union of Local and Regional Governments of Latvia (Latvijas Pašvaldību savienība, LPS) agreed with LIZDA once again to defer implementation to 1 September 2004, subject to the condition that the teachers' wage system should continue to be developed. In an effort to meet the concerns of education workers, during this period the state budget was amended several times to increase funding for education, and several interim payment schemes were offered.

As a result, the wages of education workers increased slightly. In 2003 the average wage in the education sector was slightly higher (by 1%) than the national average, but in the public education sector it remained 13% lower than the average for the whole public sector. In the private education sector, the average wage was 5% lower than in the public education sector. In the fourth quarter of 2003, average wages in the education sector were 6% higher than the national average. The public sector education average was still lower than the average for the whole public sector, while the difference in the average wage between the public and private education sectors increased to 11%.

In 2003 a long-term scheme for raising the statutory national minimum wage was launched (LV0310101N). This provides that by 2010 the minimum wage will be increased to the equivalent of 50% of the average gross wage (to around EUR 210 from EUR 106 in 2003). In 2004, the minimum wage is being increased by 14.3% (to EUR 121), while subsequent increases will be lower, averaging 9.4%-10.2% annually. The implementation of this scheme makes the observance of the Education Law’s rule for teachers' pay even more difficult, as the latter is based on a minimum of double the national minimum wage. The application of the minimum wage increase scheme means that teachers’ wages should also rise regularly, and the government must allocate funds from the annual state budget for this end. Thus, in accordance with the Education Law as amended, from 1 September 2004 every teacher must receive a wage at least equal to double the national minimum wages, ie EUR 240. In 2005, when the national minimum wage is raised to EUR 135, the lowest teacher’s wage will be EUR 270 per month.

Recent developments

Budget forecasts indicate that it will be hard to ensure the abovementioned rapid pay rises for teachers. In 2004, a total of EUR 18.2 million is needed for this purpose, and in 2005 the figure will be EUR 54.9 million. In 2003, some 15.6% of total state budget funds were spent on education funding, including 11.3% of the primary state budget and 46.2% of primary local government budget funds. Spending on education comprised 6.8% of national gross domestic product.

For this reason, politicians are now seeking ways to decouple teachers’ wages from the minimum wage, instead determining them only on the basis of qualifications, categories, workloads and performance evaluation. Government amendments of the Education Law to this effect were debated at the 5 February 2004 sitting of parliament, but were not adopted. The rejection of these amendments was the formal justification for the resignation of the coalition government led by the centrist New Era Party Partija Jaunais Laiks, JL). Despite this, when the 2004 state budget was prepared funds were not allocated for implementing the Education Law pay rule based on the minimum wage, and this was the version of the budget received by the new government that took office in March 2004.

However, it appears impossible to make amendments to the Education Law that would rescind the link between teachers' pay and the minimum wage, because were the issue to be opened for discussion, there could be friction over reform of education for minority groups, a matter that has caused political conflicts with minorities. Despite the tense situation, the LIZDA leader, Astrida Herbacevica, has warned in the press that 'if teachers’ wages are not increased on 1 September, there is no telling what we will do on 2 September.'

On 11 February 2004, an extraordinary meeting of the LIZDA board adopted a statement on wages for educational and scientific workers, emphasising that the laws and amendments adopted up to now cannot be grounds for halting the development and improvement of the teachers’ pay system. LIZDA believes that a state programme is needed to bring wages for workers in the educational and scientific sectors closer to the average level for EU countries. When determining wages, attention must be paid to teachers’ educational levels and accrued experience. LIZDA believes that local governments must also be able to implement the pay norms in the Education Law with regard to teachers funded from local government budgets.

Teachers’ pay a political issue

In the run-up to European Parliament and local government elections in June 2004, conflicts between political parties intensified, and teachers’ pay became an issue in the debate. JL, the party at the core of the previous government, which is now in opposition, has expressed concern about whether it will be possible to raise teachers’ wages in September 2004 in accordance with the scheme adopted earlier. JL is promising to monitor closely whether the law is observed, although attempts to avoid observing the law and to decouple teachers’ wages from the minimum wage were the causes of the resignation of the government headed by this party.

Meanwhile, Aigars Kalvitis, the parliamentary leader of the ruling People’s Party (Tautas Partija, TP), has stated that it will be possible to implement the pay provisions of the Education Law, but the necessary budgetary amendments cannot be promised earlier than the end of summer 2004. It is possible that the current government will also try to soften the financial consequences of implementing the teachers' pay rules, for example by narrowing the range of people eligible for pay rises. According to press reports, neither the Ministry of Education and Science nor teachers have been able to define what is meant by the Education Law's concept of 'a teacher with the lowest qualification'. It should be noted that the provision of the law requiring all teachers to have higher education credentials was deferred from its initial starting date of 2001 because of a shortage of teachers. Although exemptions are currently only available for teachers approaching retirement age, teachers without higher education continue to work in schools, especially in specific vocational subjects.

Commentary

The demands to increase the wages of educational and scientific workers appear fair and reasonable. The current education debate, and LIZDA's actions to increase wages for education workers, focus on spending state funds without mentioning the possibility of other sources for education funding. Small countries will always have great restrictions on state funds for education. Therefore, it would be desirable for the education system to find additional funding sources. Education funding would be improved if it was possible to attract private financing, but this is delayed by the existing tax rules. Payments by businesses for training their employees are considered as income and are subject to income tax, thereby doubling the cost. Entrepreneurs have long been asking the government to change this rule, which is inappropriate for the existing situation, but the government has rejected this demand. Education strategies are not seen as opportunities for exporting educational services. Increased private and foreign funding would permit an increase in education workers’ wages, and closer cooperation with business would allow the closer alignment of educational provision with the needs of the economy and the students themselves. Simultaneously with the improvement of working conditions for educational workers, attention must also be paid to raising their qualifications so that the quality of education as a whole is improved. (Raita Karnite, Institute of Economics, Latvian Academy of Sciences)

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