March 11, 2010

Education: I Fixed It

We spend about $528.7 billion a year on public education.  That number doesn't really mean anything to you?  OK, try this: the base defense budget for the United States is $533.8 billion.

Still nothing?  How about this: what if we funded public education with corporate donations?  Sounds like a good idea, right?  It would be pretty cool, after all, to attend Google High or Exxon Elementary.  Well, it would take the entire annual profits of the following companies to come close to covering the annual bill for our children's public education: Exxon/Mobil, Total, Shell, WalMart, BP, Chevron, Sinopec, Japan Post Holdings, GE, China National Petroleum, Volkswagen, ENI, HSBC Holdings, Gazprom, Daimler, BNP Paribas, AT&T, Hewlett Packard, Bank of America, Samsung, Nestle, JP Morgan Chase, Honda, Verizon, BASF, Proctor & Gamble, UnitedHealth, Nokia, Home Depot, Target, Johnson & Johnson, Mitsubishi, Dell, Boeing, Microsoft, MetLife, Goldman Sachs, Wells Fargo, UPS, Caterpillar, Pfizer, Lowe's, PepsiCo, Kraft, Lockheed Martin, Canon, Cisco Systems, POSCO, FedEx, Disney, Intel, Sysco, Royal Bank of Canada, GMAC, Comcast, News Corp, Apple, Zurich Financial, Coca Cola, Amex, DuPont, Aetna, BAE Systems, Liberty Mutual, Phillip Morris, L'Oreal, 3M, Occidental, Merck, US Steel, McDonalds, Oracle, Telstra, British American Tobacco, and Google.  Oh, and it would still come up about $4 billion short (we could just borrow the remainder from China).

I didn't get to the scary part, yet.  This may not be the total cost of education.  According to some (like this guy), the actual cost per student may be significantly higher due to expenses and funding not counted in the total $528.7 billion.  One of the main reasons for this is that the total figure doesn't include local bond measures, among other things, which can add up to some significance.

Now that I have your attention, let's get a little nitty and really gritty.  Let's talk about teachers.

I'm not going to hem and haw over the whole tenure aspect of unionised teachers, though a bit could be said about that.  I will briefly touch on quality of education, but my main focus will be cost (quality does relate to cost, which is why I'll light on it).  Unless, of course, all of those Fortune 500 companies would like to forego their profits in the name of American public education.

So far as quality of education is concerned, there are no hard and fast rules as to what constitutes proper learning.  Ask ten different people, and chances are you'll get at least twelve different answers.  One thing is clear, though; children are not ill-serviced by attending private, charter, Catholic, or home schools in lieu of public schools (not exactly a news flash, here).  In fact, some studies show that the average home schooled child performs one grade level above their public schooled counterpart.  But, for purposes of this treatise, we'll assume equal levels of scholastic achievement may be obtained from private, public, home, Catholic, Lutheran, or otherwise schools.

On to teachers; specifically, teachers' pay.  I know this is a touchy subject for a lot of people.  We've been told for decades that teachers are overworked and underpaid.  The question is: are they?  I believe the best measure of a teacher's pay is their realised hourly compensation rather than their annual salary.  Why would I do such a thing?  I'm glad you asked.

The average worker has 52 weekends off a year, 11 holidays, and 3 weeks vacation (though many, myself included, fall well below this amount of time off).  That leaves 235 days per year being actually worked.  The average teacher, by contrast, works a paltry 185 days per year; basically, 2 1/2 months less.  Now, if I compare a teacher making $40k a year to an architect making $45k, it looks like the teacher gets compensated far less for their time.  But, when you consider that the architect works 64% of the year and the teacher only 51%, it's not so clear (if the teacher worked comparable hours at the same hourly pay, they would make $50k a year).  Therefore, I use hourly wages as it adequately reflects compensation for actual time worked.

So, how much is the average public school teacher paid per hour?  The average workweek for a teacher is 36.5 hours, with about 37 weeks in the year being worked.  That equates to 1,350.5 hours worked.  The average teacher's salary is $49,140 (though some make up to $80,970).  This equates to about $36.39 per hour.  By contrast, the average pay for a chemist is about $46,590.  If that chemist works the typical 40 hour work week, 235 work days per year (if they're lucky enough to get 11 holidays and 3 weeks vacation), they make $24.78 per hour.  That figure goes down by about a dollar an hour if the chemist only gets 2 weeks vacation and closer to 6 holidays, like the rest of us schleps.

OK, here's the kicker.  Remember how I said earlier that there's no improvement in the quality of education for public schooled kids over private?  Private school teachers make, on average, 61% of the wage of their public counterparts.  That's $22.20 per hour, closer to the chemist's pay (about $30k a year, for those interested; but they still get all the days off).  Think about that for a minute: 61% less pay, equal results.  Arguably better results, but we'll let that slide for now.

But wait, there's more!  If you act now, you can not only spend taxpayer dollars on excessive teacher pay, but you get a classically bloated government bureaucracy free!  Just kidding.  It's not free.

The cost to educate a student in the K-12 public schools is, per student per year, about $10,889.  Now remember, this figure doesn't include local bond measures or the like, so the number may very well be a bit north of $10,889, but this is what we'll use as our baseline for public education.  By contrast, the average private school costs $6,600 per student per year, the average charter school $6,585, the average Catholic school $4,254, and the average home school somewhere between $100-1,000 (generally on the lower side).  Amazing what a little government bloat can do for you, eh?

These averages don't tell the whole story, though.  There are a great many private schools that cater to the affluent, skewing the average cost a bit higher than a valid comparison might merit.  Some of the more prestigious prep schools (you know, the ones our politicians send their children to) can cost upwards of $30,000 per student per year.  That being said, there are a great many private schools out there that offer comparable or better education than public schools for a paltry $4,000 per student per year (many are actually at or under $3,000).

Now, if I had my druthers I would pull a C3PO and have all public school tax funding shut down.
Shut them all down!

But this isn't currently feasible as it would have to come along with a huge tax reform to the current, Draconian system (basically, parents would net a greater gain from their tax money now kept in their pockets than the loss from having to pay for schooling out of pocket).  Since that's a long way off, we need to do the next best thing: vouchers.  Shut down public education entirely and instead issue vouchers to the school of the parent's choice.

Let's do some basic math.  If our current expenditure per student is $10,889, and a comparable private education can be had for $4,000; then we could reduce the cost per student by 63%.  Flowing from this, that means we could reduce the cost of education from $528.7 billion to $194.2 billion.

Hey, look at me!  I just saved the taxpayer $334.5 billion while maintaining or improving our children's education!  Someone hand me a Nobel prize.


  1. Skipper,

    Thanks for sharing your number-crunching on this topic.

    I feel especially qualified to comment on this issue for the following reasons: I attended public high school with you back in the People's Republic of California, I am a conservative/libertarian (heck, I'm the one who recommended Atlas Shrugged to you), and I am now a public school teacher in a non-union state (South Carolina).

    My view is that public education itself is not the problem. There is a long conservative tradition in favor of public education. In fact, many American localities offered public education prior to and after 1776. The real issue is with centralized public education, whether that be federal or state. If every local community had control over their own schools, we would immediately have competition in schools. In a sense, this is what has been happening in recent years with charter schools. While still considered public schools, these charter schools are freed from many of the federal and (mostly) state mandates that bog down other public schools. It should come as no surprise that charter school generally out-perform other public schools.

    The second killers of public schools are the unions. As a student and then as a student teacher in California public schools, I can attest to the overall poor quality of teachers in unionist states. Teachers in California cannot be fired for being incompetent (technically they can, but it never happens).

    My own experiences support the argument that non-union teachers (like here in S. Carolina) spend more time working, collaborate better with other teachers and administrators, and provide a better education for students. Even though I could make 50% more money in California, I don't think I'd want to teach there... especially as individual teacher excellence is rarely recognized and rewarded.

    Regarding teacher pay: While it is true that most teachers have a 185-190 contract, it isn't quite accurate to simply multiply this number by eight to figure out an hourly wage. All the teachers I know -- and especially the good ones -- work well more than 36.5 hours a week. Yes, their contract might stipulate 36.5 as the hours in a school week, but I've yet to meet a teacher who arrives and leaves with the students each day and never takes work home. Most teachers get to school early and leave well after the students. On average, I work from 7:30-5:00 each day. At 190 contract days, that's 1805 hours a year. A starting teacher in South Carolina makes around $32,000 a year, which would equal $17.72 an hour if they worked as many hours as I do. However when you consider the benefits -- decent health insurance, summers and holidays off, and the guaranteed yearly raise (which I disagree with, as it is not merit-based) -- there is little room to complain.

    So while I agree that many teachers are overpaid (most notably in union states), there are many of us who are compensated at a level that is appropriate for the region of the country in which we reside.


  2. Good points all, JT.

    Mainly, I'm concerned with choice and, thus, competition. Whether that's through the proliferation of charter schools or abolishing public education altogether other than voucher funding, it comes to the same, basic end (though I obviously favour the latter approach). Unions, by nature, stifle competition and, thus, results; so I'm in full agreement with you there.

    As to the hours worked, that's a really mixed bag. There are a lot of jobs where people have to bring work home, work over their expected hours, and so forth; teachers assuredly do not have a corner on that market. Due to that fact, I didn't take it into consideration. Now, that's not to say there aren't a lot of dedicated, hard working teachers out there willing to put in the hours; there are. But their base pay is still inclusive of having the majority of the summer off and a good amount of other breaks throughout the year, regardless of whether or not they go over their contractual 36.5 hours. If we take the extra hours into consideration with teachers, we'd have to do it with every job in which people being paid salary work over the expected hours or take work home; which is infeasible.

    All that being said, yes there are areas (such as yours) where teacher pay is more in-line with market rates for the area. Even a switch away from the union system most states abide by would go leagues towards saving taxpayer money and helping to possibly improve educational standards. I think it's not far enough, though, as I prefer a more market-based approach with even greater benefit (though, of course, this is all relative as we're essentially talking about redistribution of wealth).