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No easy cure for 'cost disease' in Australian schools

By Dean Ashenden - posted Tuesday, 8 May 2012

The prospect of applying the economists' notion of 'productivity' to schooling was more inspiriting than the resulting Productivity Commission Schools Workforce report (released on Friday) has proven to be.

One problem for the report is that it has been shaded by three other big reports of recent months, Gonski's review of funding, an excellent study by the Nous group commissioned by Gonski, and a report by the Grattan Institute that compares schools' performance with that of our Asian neighbours. Most of what the Commission has to say has already been said or implied by one or other of these three, usually in a more compelling way.

And that is the Commission's second problem. It is the opposite of trenchant. Even Sir Humphrey would be hard pressed to discern from this report that the productivity of Australian schooling has been falling for decades — that is, spending keeps rising much faster than student attainments — and no-one knows what to do about it.


The problem was detected almost half a century ago by the American economist William Baumol, who pointed out that teachers' salaries rise not because teachers are becoming more productive but because their employers are forced to compete in the labour market with industries in which workers are becoming more productive.

This 'cost disease' as Baumol called it, is widespread in the 'human services', but is compounded in schooling by the near-halving since the 1960s of class sizes, chiefly via industrial agreements.

This had the unintended effect of locking into place a way of grouping students and teachers still taken for granted when the 'class size' strategy was constructed. One of many possible ways of combining the 'factors of production' — time, effort, skill and space — became the only way.

The careful reader of Schools Workforce will find evidence to most of these points, but cast in such circumlocution, and so threaded among myriad minor observations and concerns, as to be neutered.

Perhaps the Commission was too anxious to avoid offence to its client COAG. Or perhaps it shrank from stating too plainly a 'disease' for which it can suggest only palliatives such as more pay for hard-to-staff positions, more training 'practicums', more local 'flexibility' in staffing mixes and industrial agreements, and so on.

We can wonder whether the ramshackle machinery of schooling is capable of implementing these and other suggestions, but the real issue is of scope and depth. The Commission has begun from a misconception. It has assumed the 350,000-odd teachers and other employees of school systems constitute the 'workforce' of schooling. They represent, in fact, only about 10 per cent of it. Most of the workforce is comprised of students.


This is not a rhetorical point. Students are the only people in schools who can produce learning. As in any other workplace, what and how much they produce depends on the supervisor, of course, but also on how work is organised, controlled, sequenced, evaluated and rewarded.

In the recent flurry of reporting on schools only Grattan, an otherwise dubious document, really grasps that this is where the productivity problem needs to be tackled. Grattan notes that several high-performing Asian systems have opted for very large classes but low teacher contact hours because that provides the time teachers need to do the planning, preparation, review and peer mentoring so essential to more productive classrooms.

We should be looking hard at such 'trade-offs', Grattan rightly concludes.

Here as elsewhere it is possible to find in the Commission's report discreet expressions of concern over poor returns to the class-size reduction strategy as well as support for experimentation with other student-teacher groupings. But this kind of thing has been talked around inside the schooling industry for some time now.

The pity is that an outsider, with a rare chance to call a spade a spade, has preferred instead to talk about a resource worthy of investigation for possible application to at least some horticultural tasks. 

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Article edited by Jo Coghlan.
If you'd like to be a volunteer editor too, click here.

This article first appeared in Eureka Street on 6 May 2012. 

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About the Author

Dean Ashenden was co-founder of the Good Universities Guides and Good School Guides, and had been an adviser or consultant on education policy to state and federal governments and agencies.

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