The Teacher Strike in Peru

By: Frank Yunker

Date: 2017-08-31

The Peruvian teacher strike is winding down now that the Kuczynski government is offering the teachers an immediate raise, effective in November rather than next year. The news from Peru does not reach America so readily. This mid-year strike means thousands of public school children are in danger of having to repeat their current grade. Since Peru is below the equator, their summer months are December and January. The strike has been going on since mid-July and has affected over 40% of the student public school population.

That’s right. The public-school children are the ones impacted. The private schools are fine. Let’s examine some of the issues.

1. Public schools are effectively a government sanctioned monopoly. All monopolies are in some way government sanctioned. When this monopoly strikes – and both strikes and parades seem to be a national pastime in Peru – the buyers of this commodity, the parents and the students, are wholly affected. The private schools are not a viable outlet for frustrated parents. While public education is free, private education can cost upwards of $1000 US per month, an amount that exceeds the average pay for Peruvians. Parents who want to be rid of the politics in education have nowhere to turn. Their children have been denied an education for 2 months.

2. Public schools are effectively a government sponsored monopsony. If you want a job as a teacher, there is only 1 employer hiring. The public school with a public contract that started teachers at 1200 soles per month. That’s a little less than $400US per month and while the cost of living is significantly lower in Peru, 1200 soles is not enough. The government is agreeing to 2000 soles per month, a far cry from the 4500 soles the teachers were demanding. This means a teacher – no matter how talented – will never find the incentive to innovate and improve beyond the innovations and improvements that meet the dual standard of both helping the student and making the teacher’s life a little easier. If the innovation cannot do both, it will at least do the latter.

3. In a normal functioning economy, services and products rendered are mutually agreed upon. A Big Mac has a price and if enough consumers buy it at the offered price, McDonald’s will keep selling it. The Lobster Roll struggles to sell and McDonald’s pulls it from the inventory in favor of something else. In Public Education, there is a disconnect between the buyers, the providers and the recipients. Regardless of how much the consumer loves the teacher, the school or the academic enrichment in general, the teacher’s pay is negotiated by the government and the union. The government answers to the taxpayers and thus has incentive to keep costs down. The union answers to the whole membership at large which means it negotiates for items like the inability to dismiss a teacher based on a poor performance review. And while at first glance it may seem like a bad idea to protect poor performing teacher (even at second glance, it is), that poor performance review was given by a non-teaching bureaucrat rather than the consumer (parent or student) who observes the teacher performance weekly. The bureaucrat, at best, observes it weakly.


There are ways to introduce some free market reforms to public education that can incentivize teacher quality. School choice - even if the only choice is a neighboring public school - would be a start. Then, Peru needs to negotiate improved pay for high performing schools.