As I've said before, all teachers are socialists at heart. So, for anyone actually in a classroom, the rest of this piece may as well be science fiction.
Anyway, pressing on, ..
McKinsey said
If America had closed the international achievement gap between 1983 and 1998 and had raised its performance to the level of such nations as Finland and South Korea, United States G.D.P. in 2008 would have been between $1.3 trillion and $2.3 trillion higher. If we had closed the racial achievement gap and black and Latino student performance had caught up with that of white students by 1998, G.D.P. in 2008 would have been between $310 billion and $525 billion higher. If the gap between low-income students and the rest had been narrowed, G.D.P. in 2008 would have been $400 billion to $670 billion higher.
As evidence of the so-called 'achievement gap', Friedman cites the United States ranks of 25th out of the 30 in math and 24th in science in the 2006 Program for International Student Assessment (PISA).
Such wringing of hands is all very well, as we keep hearing from Friedman and others. But how exactly does anyone propose to close this achievement gap? I can well imagine that there is a substantial industry out there looking for the solution - and probably a 100 doctoral dissertations in preparation too. But for the life of me I just cannot find anything that a lay person can read in 30-60 minutes and feel s/he is beginning to get a grasp of the problem and the range of possible solutions. (We seem to be able to do it for Global Warming, a much newer problem, so why can't we do it for education? If you know of anything, please send it my way.)
[I'm going to throw about a lot of numbers in what follows, without attributing sources. So, for arguments sake, let's assume these numbers. They may be off by 10-20%, but that is not going to affect things by that much]
To put the McKinsey numbers in perspective, the US GDP is about $14 trillion - so we are talking at least a 10% gain ($1.3T). $14 trillion translates to a per-capita income of $45,000. Given the skewed nature of the the income distribution, this is also fairly close to the median household income ($50,000).
Most states seem to spend about $8,000-$10,000 per student. On the low end, for a family with two children, that amounts to $16,000 - or 32% of pre-tax household income - if a median-income family had to go out and buy this education on the open market. (Actually on today's open market you are going to pay 1.5 to 2 times that amount.)
As a way of cross-checking these numbers, let's look at what proportion of the GDP is spent on education. The US come 10th in the world, at a little under 5% of GDP. (The top 5 countries spend more 5%, but no one spends more than 10%. The US being 10th is a sort-of worst-case scenario. Other estimates put us much higher up in the rankings. But then, we spend more on health as a proportion of GDP than any other nation and we all know what that is buying us.). If 20% of the population is of school-going age, then our per-student expenditure is about $11,500. That makes sense, because 'education' in this context probably includes all higher education. - so you'd expect this number to be above the earlier $10,000 per student estimate.
Now the countries that are beating us in the PISA, are not necessarily out-spending us, as a percent of GDP. So spending more money is obviously not the cure. Still, if the consultants at McKinsey are to be believed, doubling our education expenditure (i.e. adding another $0.7T to the pot) is still well worth it, as it pays off in at least $1.3 trillion added to our GDP. (Mind you, these are annual numbers, not one-time expenditures, and you would have to sustain them for 15 years before you are likely to see the results in rising GDP.)
How much would you really need, and what would you do with it? That's what I want to read about.
Teacher compensation makes up about 40%-50% of total education spending, at a student-to-teacher ratio of 16:1. (Does this make sense? Yes. 300M population * 20% = 60M children in school / 16 = 3.75M teachers. 40% of 5% of GDP = $0.28T, divided by 3.75M = $75k compensation per teacher. If you estimate about 50% overhead for benefits and employer taxes, you get an average salary of about $50k. (This seems a bit high, by about 5%-10%).
So on the one hand, you could double teacher pay, and keep the student-teacher ratio the same. Cost $280 billion/year (or 2% of GDP) (Of course, this is not going to happen suddenly, since the number of households with an income of $100-$150k was 11 million in 2005. Imagine pushing another 4 million teachers into that bracket.)
Or, conversely, you could keep teacher pay the same (or even less), and drop the student-teacher ratio to 8:1. Cost $280 billion/year. (This is not quite correct, as the capital and maintenance costs of providing physical teaching space for twice as many teachers will be considerable)
Getting your hands on that sort of money is, of course, unimaginable. In Washington State, about 75% of the non-capital, non-debt portion of K-12 education cost is borne by the state, amounting to 40% of sales, B&O, and property taxes that the state collects. Right now the state is forecasting about $14B in annual revenues. And from what we saw earlier, it costs $8B-$10B to school 1 million children. So increasing the education budget by double-digit percentages is not going to happen.
Incidentally, out of the almost $800 billion that Obama has at his disposal to spend on the stimulus package over the next 10 years, over $100 billion is ostensibly for public education.
Okay, so we are not going to raise teacher salaries by much, or decrease class sizes by much.
What we ought to do then should raise some interesting discussions from Friedman. He would have us believe that all the 'low-wage' jobs are going overseas, and the only way that Americans can hang on to their cushy lifestyles and fat paychecks is to move up the economic food chain. This would imply that in order to continue deserving a $50k salary, 4 million US teachers would have to think up an entire bag of tricks that add value between the ages of 5-18 in a way that China and India cannot hope to.
And if we can't?
Then just like happened for textiles and manufacturing and automobiles, the jobs will go overseas. And teachers won't be that different from the pizza delivery guy - take the ingredients out of the box, assemble, heat, and deliver in 30 minutes. I think that is what Friedman is saying.
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