Public school economics: Productivity and oversight matters

Former Delaware Governor Pete Du Pont wrote the following about America’s public schools in the Wall Street Journal:

“It isn’t a money problem, for a great deal more money is being spent on education. It isn’t an urban problem, for charter and private schools successfully educate urban children… It is an institutional problem; a problem created and sustained by layers of immovable bureaucracy in public school administrations, state departments of education, legislatures and teachers unions.”

In The Institute for Policy Innovation’s “Quick Study” Policy Report entitled “The Inefficiency of America’s Public Schools,” Robert Franciosi, Ph.D., states that “American public education is still mired in the crisis of productivity that began in the 1960s.”

Franciosi’s study “surveys what America has spent on public education over the past three decades and what the money has bought us in terms of student achievement, parental satisfaction and public confidence,” among other things. Spending is up [in real dollars] and more money is consumed by the education establishment at all levels of government “than does any program other than Social Security. And the expenditures continue to grow.”

“Despite these financial inputs,” Franciosi says, “the ‘outputs’ of our public schools have been disappointing.” He continues:

“In terms of math and science performance in international tests over the past 40 years, two patterns are evident. First, U.S. students perform comparatively better in science than in math. Second, students tend to fall behind as they move up in grade level.”

Later, Franciosi notes other troubling facts that are representative of the state of American K-12 education:

  • “In 1993, nearly 50 percent of the freshman class of the California State universities needed remedial assistance.”
  • “Direct costs also fall on individual employers…AT&T reported that, on average, 115 out of 117 applicants failed its employment exam.”
  • “Motorola found that 80 percent of its applicants failed an exam designed to evaluate English skills at the seventh-grade level and math skills at the fifth grade level.”

“If lack of resources – in today’s dollars, in relationship to our past or in comparison with other nations – is not the problem,” Franciosi asks, “what is?” He presents two factors to explain what the problem is.

First, according to Franciosi, is the “inefficiency associated with a monopoly – what economists term ‘x-inefficiency’.” Simply put, “big bureaucracies with monopolistic powers are inefficient.” Creativity and innovation are lacking due to the lack of incentives.

“The second factor mitigating against public education’s improvement is the strength of teachers’ unions…Union contracts and the rules they impose on administrations often make public schools less efficient. The salary schedules, grievance procedures and seniority-based assignments tie administrators’ hands.”

One of the chief reasons private schools cost barely two-thirds of the public schools is due to the fact that they don’t burden their administrations with unnecessary non-teaching staff, like kitchen workers to janitors to clerical support staff. According to Peter Brimelow in “The Worm in the Apple,” “there is now one adult for every eight or nine children in the government school system.”

Productivity is not an unreasonable subject for discussion when it comes to the use of public funds. Unfortunately in the case of public schools, “There are apparently never any productivity gains in the education business…only productivity declines.”

Again, getting back to our premise of the need for oversight when it comes to both matters of “input” and “output,” in Peter Brimelow’s words, the “qualitative problem is mixed…but, “…the government school system’s qualitative problem is overshadowed by its quantitative problem-it’s hoggish consumption of ever-increasing resources to do, at best, the same job.”

In part this is due to the long-standing public attitude, as Brimelow says, of “viewing the government school system as a sort of religion or charitable endeavor rather than as an industry,” and assuming “that education spending is good and that more is better-as if education spending were prayer or good works.”

That attitude has cost both parents and taxpayers in regards to both the “input” and “output” of schools.

In some of the most perceptive language on the subject of “econ 101” of the public schools, Peter Brimelow wrote that:

“The government school system is simply the most prominent outbreak of socialism on the American scene. (Unemotionally defined, socialism is the government ownership of the means of production, distribution, and exchange.) And not surprisingly, after a hundred years or so, the government school system is displaying the classic symptoms of socialism-as they could be observed in the economy of the terminal Soviet Union.”

There is a need for public oversight, restructuring of the public school institutions, and a growing awareness on the part of the public that we can’t just take their word for it. It is the job of school district administrators to disclose and justify every line item as they explain why public schools are so much more costly than private schools.

©2008 John Francis Biver