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Linking funding to employment could have perverse consequences

Data recently released by the Ministry of Education highlights some of the dangers in the minister of tertiary education's proposal that funding be linked to employment outcomes. 

Statistics relating to the impacts of tertiary education on life after study show, for instance, that people with masters level qualifications have a lower employment rate that those than people with honours qualifications. Likewise, the employment rate of people with doctorates is no higher than those with honours qualifications. 

TEU national president Dr Tom Ryan says it would be absurd to assume that there is limited value in masters study just because there is not an easily quantifiable employment outcome – yet that may be the signal that a poorly designed funding mechanism could send to tertiary institutions.

Such a development would be especially unfortunate given the Tertiary Education Commission’s current focus on encouraging, and even rewarding institutions for, increases in the numbers of post graduate students.

However, Dr Ryan suggests that the greater concern would be an unintended pressure on institutions to abandon their equity goals.

Currently Māori, Asian and Pacifika peoples with tertiary education qualifications have lower rates of employment than their Pakeha peers with the same level of qualifications. 

While it is unlikely that any institutions would want to start enrolling Pakeha students  (who have statistically higher employment outcomes) over students from other ethnic backgrounds, that is a potential outcome of a funding system that would reward tertiary institutions on the basis of employment outcomes.

"The minister will need to be careful to avoid the unintended consequences of a proposal that sounds good as a sound-bite, but in practice could well be inherently complicated and unfair," said Dr Ryan.

"Mr Joyce also needs to remember that his government’s Tertiary Education Strategy specifically calls for increased numbers of Maori and Pasifika with tertiary qualifications, not for fewer".

Also in Tertiary Update this week:

1. Employment law poses risks for tertiary institutions


2. Tertiary education not just about employment


3. Enrolment caps spelling end for equal access


4. NZ and US move closer to trading private education


5. Other news

Employment law poses risks for tertiary institutions

Changes to employment law could have a significant detrimental impact on people employed n the tertiary education sector, according to TEU national secretary Sharn Riggs.

"While there is currently no detail around some of the government's proposals, it is clear that the intention is to undermine many of the basic employment rights that workers have campaigned for over the years. The risk for people working in tertiary education is that those changes could also impact upon employment conditions that have been written into collective agreements," says Ms Riggs.

Until now, the government's 90 day fire-at-will bill has not been applicable to most tertiary education worksites. Union members have had, in most cases, relatively free access to their union organiser at their workplace when they have needed it. 

"At this stage it is unclear whether the terms in our TEU collective agreements will protect workers from these new laws. The best course of action for employees, especially new ones is to join TEU - and work together to protect core conditions like four weeks holiday, the right to fair personal grievance process, and the right to talk to their union at their place of work," said Ms Riggs.

The EPMU's general secretary, Andrew Little, says the proposed law changes are niggardly and nasty and won't create a single extra job.

"The ‘90-day trial’ extension, as with the other measures announced by the Government, is underpinned by an assumption that workers cannot be trusted. One of the employers quoted in the Government report on the trial period law confirmed this when he said the law should be extended to six months because workers could easily behave for three. According to this employer, workers get a job in order to slack around and undermine the business."

"The same anti-worker sentiment sits behind the demand that workers provide a sick note for a single day of absence. There must be independent evidence of sickness because workers cannot be trusted to tell the truth."

Tertiary education not just about employment

Tertiary education has important outcomes that risk being skewed if the government continues to focus too strongly on employment and productivity outcomes, according to TEU women's vice-president Dr Sandra Grey.

Dr Grey says that the Ministry of Education's own data shows that higher rates of tertiary education are closely linked to lower infant mortality rates and raised living standards.

"Employment and productivity are important outcomes from our tertiary education system, but they are not necessarily the most important outcomes. For instance, women with tertiary education have much lower rates of full-time employment (53 percent) than men with the same levels of tertiary education (75 percent). Yet no one could seriously suggest that tertiary education for women has less productive value than it does for men."

"Women are more likely to have caring obligations that take them out of full-time employment, such as looking after children or elderly relatives. That is an invaluable contribution to society and the economy which we should recognise."

In 2006 there were nearly 230,000 people with tertiary qualifications related to education and health. The vast majority (188,000) were women. Their employment opportunities are most likely to be in the public sector where the government currently is making budget cuts and limiting the number of people it is willing to hire. 

By comparison, there were 205,000 people with tertiary qualifications relating to engineering and related technologies, of whom 189,000 were men. Many of their job opportunities will be in the private sector.

"It simply would not be fair to compare and fund various tertiary qualifications differently," says Dr Grey, "without first taking into account the gender differences, both in respect to what people study and whether and where they work in paid employment."

Enrolment caps spelling end for equal access

"I think it's fair to say it's the end of open access as we have known it in New Zealand.  It has been the most open entry system anywhere in the developed world, and I think now we are moving to a system more like what you would find in the rest of the world – there are a limited number of places and people compete for them."

That is Massey University vice-chancellor Steve Maharey's view of the EFTS cap system and universities' moves to introduce widespread enrolment caps, as expressed to Off Campus magazine this week.

Off Campus argues that Clarence Beeby's founding vision of New Zealand's education system, "that all persons, whatever their ability… have a right as citizens to a free education of the kind for which they are best fitted and to the fullest extent of their powers", is being undermined by the combined effect of the EFTS cap and the enrolment restrictions.

Thearticle traces the history of rapidly increasing student numbers since the 1990s (the proportion of 18 to 24 year-olds enrolled in tertiary institutions rose from 20.5 to 30.2 percent between 1990 and 2001), and decreasing government investment (between 1991 and 2002 government funding for universities dropped from 73 percent of total operating revenue to 42, and then 37 percent in 2006).

With a resumption of funding cuts to tertiary education under the current government (Off Campus estimates that government investment has now fallen to 35 percent, compared to about 46 percent in Australia), the government's response has been to compel institutions to rein in their costs. As finance minister Bill English infamously noted to ITP chief executives last year:

"Don't run out of money because I'm not going to give you any… You fix it or we will find someone else who will."

In the Off Campus article TEU national president Dr Ryan agrees that the problem relates to government underfunding, and the government’s obsession with cost cutting in the public sector – at the same time as claiming to be catching up with Australia.

"We're the seventh-lowest taxed country in the OECD… [and] we're just had a budget that has given massive tax cuts to the top 5 percent of income earners…. Australia has a top tax rate of 43 cents to the dollar."

"If we want to keep up with Australia… we should be investing proportionately – which would mean a couple of $100 million extra in tertiary education. With that level of increased funding, open entry could effectively be restored", said Dr Ryan.

NZ and US move closer to trading private education

Negotiations between New Zealand the United States and six other Pacific Rim countries to open up trade, including trade in education are continuing to progress, according to the US trade representative Ron Kirk.

“The Trans-Pacific Partnership is a launch pad for the Obama administration’s intention to dramatically increase American exports to the Asia-Pacific and create good jobs here at home. We’re in the early stages of these talks, but our team will be reporting some significant, positive outcomes to Congress," said Mr Kirk late last month.

The Trans-Pacific Partnership (TTP) intends to extend an existing trade agreement which covers Brunei Darussalam, Chile and New Zealand, to include the United States, Australia, Peru and Vietnam. Negotiations began in March 2010. If successful it could help enable the USA's $200 billion private higher education industry to establish businesses here in New Zealand.   

In the past New Zealand has taken an approach to the trade of education that has seen it reserve the right to take measures to protect its public education (and other public services) from free trade rules.  However, public education advocates have also expressed concern in the past that agreements such as TTP tend to have clauses that require ongoing liberalisation across time, thus meaning that existing protections come under continued pressure to be amended or removed altogether.

In the USA the line between public or not-for-profit tertiary education and private-for-profit education is becoming increasingly blurred. For instance the Chronicle notes this week that as more [US] colleges dip their toes into the booming online-education business, they're increasingly taking those steps hand-in-hand with companies like Embanet.

"For nonprofit universities trying to compete in an online market aggressively targeted by for-profit colleges, the partnerships can rapidly bring in many students and millions of dollars in new revenue. That's becoming irresistible to an increasingly prominent set of clients. George Washington University, Boston University, and the University of Southern California, to pick just three, all work with online-service companies."

Other news

Tenders for the first public private partnership schools could be called as early as next year, it was announced today. Education minister Anne Tolley and infrastructure minister Bill English said the private sector would be responsible for financing, building, managing and maintaining the school property for a set term, while the Government would still own the land and the board  of trustees would remain in charge of its governance and day to day running - Stuff

Postgraduates and overseas students have slated a key discussion paper that canvasses reducing overseas student numbers from specific countries to counter race attacks. "It's tantamount to advocating a return to the White Australia policy of the early 20th century," Council of International Students Australia president Robert Atcheson said –The Australian

Female students wearing a full face veil will be barred from Syrian university campuses, the country's minister of higher education has said. Ghiyath Barakat was reported to have said that the practice ran counter to the academic values and traditions of Syrian universities - BBC

Even as they cope with diminished budgets, Irish universities also face increasing enrollments, driven both by demographics and the recessionary trend of people returning to education in the absence of jobs. The combination has prompted warnings that, when the academic year begins this autumn, students will encounter overcrowded lecture halls and curtailed student services. Financial constraints also risk imperiling Ireland's success at attracting top international talent, which has been deemed a central plank in the country's "Smart Economy" strategy for fostering economic revival through research, innovation, and commercialization –The Chronicle

A huge chunk of the Universal College of Learning's (UCOL) student services fee subsidises the library, computers and health care. Tertiary Education Minister Steven Joyce has questioned the legitimacy of student fee rises across the sector. He has cautioned institutes against using the add-on charges to subsidise core services that should be funded through tuition, including library and internet services. Tertiary institutes have bitten back, saying fees rises are essential as demand for services increases – Manawatu Standard

NZQA is targeting 42 PTES that have not met a June 30 deadline for filing papers relating to their accounts and quality processes. If they don’t supply the data they might lose their registration –Education Directions

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TEU Tertiary Update is published weekly on Thursdays and distributed freely to members of the Tertiary Education Union and others. You can subscribe to Tertiary Update by email or feed reader. Back issues are available on the TEU website. Direct inquiries should be made to Stephen Day, email: stephen.day@teu.ac.nz

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