Economist John Wenders’ paper for the Cato Journal
on waste in public education
was far from “tedious” as he described it in an email. Wenders shows that in comparison to private schools, public schools waste is at least 25% to perhaps over 35% in costs while providing lower quality education in the bargain.
Wenders begins by simply summarizing the inevitable failure of monopolies in open markets. In the private world, where there is competition, newcomers find ways to make products cheaper. Eventually, all producers seek to make qualitatively better products because the consumers rule.
All of this changes where there is government involvement. Wenders writes:Then, the competitive process turns from serving the consumer (by providing attractive, low-cost, alternatives) to serving the constituencies who benefit from the government regulation and control. Greed does not disappear under government control, it is simply directed away from serving the consumer toward supporting, entrenching, and enhancing the government power that controls the market and determines who benefits from that control.
Wenders describes the inability of the government controlled and regulated airline industry to reduce costs. The deregulation changed everything. The public school system remains unchanged and “operates in exactly the same way as any other regulated market and results in classic waste, rent dissipation, entrenched parasitic constituencies, and sclerosis”.
His analysis crushes the excuses expressed by the public education industry that the reasons for their costs exceeding private schools cannot be helped. Many of the costs for public schools are equally borne by private schools. The private schools do not “cream” away the better students “off the top”. Such government mandates that do burden the public schools such as special ed, education degree requirements, pupil to teacher ratios are all the result of successful lobbying by the educational establishment. Writes Wenders:At the bottom of the education pyramid, the schools love these mandates because they can be used to justify increased funding and staffing. They become a convenient excuse: “The mandates made me do it.” For this reason, when mandates are under consideration, the schools, school boards, and teachers unions, if not active proponents, often simply sit on their hands. The mandates are brought up and disavowed only when the inflated cost of public education is pointed out. As mentioned earlier, charter schools often operate without many of these mandates and, as shown earlier, do so at about 60–65 percent of the cost of public schools. Why not dump the mandates by converting all the public schools to mandate-free charter schools?
We see that open admissions have no effect because so many poor performers drop out imposing no increased costs on the public schools.
The most waste is in the cost of teachers. Ironically tenure ensures the continued employment of low quality teachers and the lack of a meritocracy disheartens achievers. Meanwhile, the ed degree requirement pulls in lower achieving students. And the pay scale rewards phys ed teachers similar to high school science teachers. Longevity is secured within 2 years of employment. Incentives to produce do not exist.
But why does public education cost so much? Because they will spend as much as is given.
Writes Wenders:Public school expenditure is not driven by opportunity costs—that is, the value of resources elsewhere—but by the ability of the public education industry to extract revenues from the taxpayers via the public choice mechanism. Expenditures are built from the top down, not the bottom up. Public school expenditures now average about $9,500 per student. If the various public treasuries were to give this industry $12,000 per student, it would spend $12,000 per student. If the industry were given $6,000 per student, despite the howls of pain from the various constituencies whose rents disappeared, expenditure would be reduced to $6,000 per student. And since there is no connection between public school spending and student achievement, in neither case would student achievement change.
That final line is the clincher. We taxpayers spend and spend and our students continue to drop in rankings on international student tests. It is time to place decisions into the hands of private education entrepreneurs who can offer various levels of quality and focus at various levels of cost.
We decide how and what to eat, how and what kind of house we live in and how and what to wear as clothing. Given the incredible need our children have to become educated for a very complex future, denying parents choice in education is like throwing money down the proverbial toilet. Wenders’ essay gives us data to back up this sad conclusion.