June 13, 2010

The teacher jobs bill is still needed and sensible

Rick Hess's blog continues to be interesting and well-written, and while he is out of the country, he's recruited as substitute bloggers two of the new generation of political scientists focusing on education, Patrick McGuinn and Paul Manna. They have been a welcome addition to the field, and I look forward to what they have to say in Hess's space.

Hess continues to talk about the $23 billion education jobs package as fiscal profligacy, and I gather that he agrees with those arguing that additional short-term stimulus spending would be a significant contributor to long-term national debt, in addition to delaying a (presumably deserved) day of reckoning for local school districts. I've made the argument before that the colonic model of school reform (and public-sector reform more generally) is an attractive hypothesis but one without an empirical basis put forward by its proponents (including Hess). Yeah, I know, Rahm Emmanuel talked about not letting a crisis go to waste, but we in education tend to declare too many crises for that to work too well.


I suspect I simply disagree with Hess on short-term debt and long-term national debt. I am persuaded by a number of economists that the far greater threat in the long run is posed by either health-care costs (Medicare and Medicaid) or by the shortage in revenue caused by the recession. In addition, I am also convinced that inflation and interest rates are too low for us to have too many options right now. Like Paul Krugman, I think the initial stimulus was far too small, and I see the mini-packages rolling through Congress in the past half-year or so as a necessary supplement.

In that context, saving teachers' jobs is a plausible component of additional macroeconomic stimulus, and those arguing about whether it should require elimination of last-in-first-out layoff priorities are playing chicken with a Mack Truck: damn it, get the package through, or the only useful function you'll have in the fall will be the proper orientation of your index finger.

From a macroeconomic standpoint, I suspect the question is what would provide the greatest bang for the buck, keeping people employed or spending the money on any other function. I suspect that you could find a group of people who have a bigger stimulus impact than teachers and other school-system employees: the majority of civil servants are probably paid at least a little less than the median teacher, and more of their income might be recycled into the economy. That's an empirical question, though I suspect that differences between the stimulus effect of keeping on "relatively low-paid professionals, clericals, and service staff" vs. "even lower-paid professionals, clericals, and service staff" are going to be swamped by any differences between "keeping public employees working" and other ways to spend money.

It's important to keep in mind that Hess is far from the only conservative downplaying the budget woes of schools. About half a year ago, Arthur Peng and Jim Guthrie penned an article for Education Next about how everyone was constantly crying wolf over public-school funding. There is a significant truth in the article along with several important flaws. What Peng and Guthrie have correct is the history over 60 years of generally buffering public-school funding in crises, if you look at national-level data. That is because we associated schooling with citizenship in both legal and political ways, and that helps insulate schools from the effects of economic downturns. (They also mention a number of other mechanisms.) There are some important weaknesses in their article:

  • The past is not prologue: I'd love for treatment of public schools in minor downturns be perfectly predictive of what happens as we (very slowly) leave the worst worldwide economic crisis since the 1930s. Peng and Guthrie imply that the behavior will continue automatically, and I am unconvinced.
  • Per-pupil revenues do not address infrastructure/capacity: In the late 1970s and early 1980s, two recessions in quick succession hit districts while many were also struggling with a decline in student enrollment with the back of the Baby Boom. Looking at per-pupil revenues obscures the fact that a number of districts engaged in repeated years of RIFfing teachers (RIF = "reduction in force," the term commonly used at the time), with small reductions in per-pupil revenues magnified greatly by enrollment declines. We're again on the downslide of a baby boom (if the baby boom echo), and regions with enrollment declines will face greater budget woes as a result of compounding events.
  • The nation is not the district: even in prior recessions, there have been school districts and states where school funding suffered far more than what you may assume from the charts in Peng and Guthrie's article, and demographic unevenness compounded that lumpiness. Enrollment declines were not felt in the budgets of Sunbelt state schools in the early 1980s, but they were prominent in the Northeast and Midwest.
  • Law is not reality: Peng and Guthrie state that education is treated budget-wise in the way that constitutions are written (i.e., children and education first, sometimes explicitly so). I wish! In reality, while education funding shifted towards the state level in the 1970s, states have also greatly expanded funding of health care and prison systems. I suspect that Blago will shortly be enrolling in a graduate program at Statesville U., if you know what I mean, but apart from the education of juveniles in state custody, that's not really the type of spending we should think of as schooling. (Yes, I know Statesville is a maximum-security facility, but Joliet closed in 2002.)

Bottom line: I wish I could share Peng and Guthrie's view of schooling as largely buffered from recessions, and I wish that I could fear long-term debt from a stimulus more than I fear lingering high unemployment, the way that Hess does. But as long as inflation and interest rates are close to zero and unemployment lingers in the 9-10% territory, we'll need fiscal stimulus, and supporting teacher jobs is a logical way to do it.

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Posted in Education policy on June 13, 2010 1:23 PM |