Education - Smarts Money

K-12 Education is Big Business

Government spent $654 billion on education in 2006, spread across primary, secondary, higher education, libraries and other.

Embedded in the education category is a set of organizations of a very specific species: the government owned and operated K-12 industry. Eighty-nine percent of US school age children -- 50 million in all -- are processed by the industry each year. The remaining 11% are educated in private schools or at home. Government education employs 3.1 million teachers in nearly every community across the country to knead, prod, push, pull, and mold juvenile brains.

Public K-12 education consumed $482 billion of public funds in 2006. Government spent $9,679 per student per year. At that rate it takes $125,827 to get a kid all the way from kindergarten through high school. Looked at another way, government spends $223,000 to run a classroom for nine months. Every household, whether they have school age children or not, paid an average compulsory tribute of $4,200 each, $350 per month to the system.

Taxpayers regularly are asked to wring their hands over teachers' pay. Just how terrible is it? The National Education Association (NEA), a teachers' special interest group, says the average salary of classroom teachers in the 2006-2007 school year was $50,816. The NEA sidestepped the issue of benefits which can be quite generous. They vary from district to district. A typical teacher's paystub might include $5,400 of employer provided health insurance and an additional $5,500 employer contribution to the teacher's retirement account. That brings the teachers' compensation up to $61,716.

Teachers do not work a full year. Between 10 to 12 week long summer vacations, often a two-week Christmas Holiday break and another week of vacation in early spring, a typical teacher might work 183 days. Compare that to a private sector employee's typical work year of 241 days.

When one adjusts the teacher's pay packet for the shortened work year, it is comparable to earning $81,465 at a normal full-time job. Median household income in 2006 was $48,200. Teachers' paychecks look reasonably stout.

Note that the hard working, talented teachers who are more effective than average are not compensated for their additional productivity - either for the extra hours they put in, or for the extraordinary natural talent or skills they may have. They are not paid more than those who struggle with teaching, due to the rigid style of compensation that ignores teacher's impact on students. Results seldom factor into pay.

Teachers and administrators are trapped by the system. Despite the large size of the K-12 industry in local economies, one employer often controls nearly all of the jobs. Teachers and administrators frequently have only one choice of employer within commuting distance, and therefore little or no individualized negotiating power. Given the greater difficulty in finding a new job without relocation, they face stronger pressure to "toe the line" than workers in industries with lesser concentrations of power. Teachers in many schools must bow to their union, too, if they are to have viable careers. To improve their prospects, teachers and administrators often leave the industry entirely, instead of shopping for better employment in the field in which they have trained and often love.

Still, American K-12 education has proven an increasingly labor-intensive enterprise. Not only are there more classroom teachers to reduce class sizes, but also more administrators, teacher aides and support staff. In 1992 American public schools employed one adult for every nine students. In 2006 the ratio shrank to one adult for every eight students. This approach has made public education more costly, but has it improved education?

American Public Schools Perform Poorly and Not Improving

How well does public education work? Its mediocrity is truly formidable.

When attempting to teach math, American public schools are in the same league as their peers in Azerbaijan and Croatia. US educators can take pride in besting Turkey, Portugal, and Mexico handily. But America generally thinks of itself in a different league. If these scores continue, America may not be in a different league much longer. In short, most of the developed world is much better at teaching math.

In science, the US lags the average of 30 economically developed (OECD) countries. Most of northern Europe and the ambitious Asians readily trounce US schools. Even Canada placed in the top five, so North American culture is not entirely too blame.

Internationally, it is hard to escape the conclusion that American K-12 education is second rate.

Inferior quality shows up in homegrown statistics too. While reliable nationwide performance measures still remain spotty, 12th grade reading scores are down slightly from 1992. Only 35% of high school seniors read at a "proficient" level. A new math test means its results are not comparable to prior years. We do not know if math scores are improving or deteriorating. Testers do report, however, that only 23% of 12th graders can perform math "proficiently" or better.

At home, schools are not improving.

Young people who need education the most benefit from public schools the least. A quarter of students do not graduate on time. One in ten never earn a high school diploma or GED. In some big city schools, the drop out rate is 50%.

Without the most basic of education credentials, these kids are economically crippled for life. They don't suffer alone. So do their families, especially their children. High school dropouts may not be able to pay their own way through life, so become wards of the taxpayer.

Evidence suggests that elementary schools do well, middle schools and junior high schools begin to lag, and high schools sink. Boys particularly seem more vulnerable that girls to academic under-achievement.

Academic failure is not restricted to today's school kids. The American adult population, ages 16 to 65, performed near the bottom on a 2003 six-nation assessment of literacy and numeracy. The United States performance exceeded only Italy's. Outscoring us were Norway, Bermuda, Canada, and Switzerland.¹

Defenders of public education point out that 20% of students speak a language other than English at home, that parents often do not support education as they could, and that TV, sports, and video games dominate children's home life. They have a point.

Too little money is not the problem. The US spends more money per student than any country except Switzerland for its feeble results² It shells out nearly $9,700 per student annually for a 489 score on the PISA test in science. Germany, New Zealand, Australia, and South Korea all pay between $5,500 and $6,500³ per student and get scores in the 525 range. In this instance, American public education is only 52% to 62% as cost-effective as its competitors.

At home, private schools charge far less than the cost of public schools. Tuition averaged $4,689 per student⁴, compared to public school costs of twice that figure.

From parents' perspective, public education is doing little to help them work productively. Rigid scheduling, short days, and generous school-only holidays wreak havoc with parents who work normal hours, especially those whose own education limits their earning capacity.

In addition, school buildings stand largely unused for much of each day and for three to four months each year. Such business practices seem especially contestable when kids, a bare 35% of whom will be proficient in writing as seniors in high school, go home to empty houses after school, or likely hang out with their friends on the street.

School System Side-Effect: Captive Customers, Perpetuated Poverty

Public schools, too, often are at odds with families' value systems. First, pop culture influences leak into public schools from the external environment. Many parents would prefer to protect their children from the coarse language, bullying, casual sex, substance abuse, and even the not-unusual violence of the public school environment.

Others object that public education is overtly used to indoctrinate children about two extraordinarily personal issues: religion and sexual behavior.

Parents exercising their freedom to seek other schooling, whether for reasons of academics or values, are heavily penalized by government. They are forced to pay for education twice: once to the public system through a lifetime of taxes, and again to the non-subsidized school the family freely selects.

Financial penalties, of course, are very effective government-controlled limits to freedom. The freedom to choose education is fundamental. If middle class families must sacrifice mightily to break free, poor families in poor neighborhoods -- the people most in need of effective education -- stand little chance of escaping captivity.

It is readily apparent that US public education is of low quality, high cost in both funds and freedom, and not improving. Clearly not where it needs to be.

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