The Economics of Schools

We live in strange times. People are getting hit with serious inflation; they are feeling the pain at the diner and the supermarket. But, at the same time, people are resigning from their jobs in droves. Yet, you would think that if people needed more money to buy milk and gas for their cars, they would hold on to their jobs. My guess is that those jobs were so terrible that they really had no impact on their family’s bottom line, so losing that income doesn’t matter.

Right now, schools are getting slammed by both forces at the same time. Any school board member will tell you that there is very, very little fat on a school budget. Three-quarters of the budget goes towards teachers’ salaries and benefits. The rest has to cover everything from heating bills to band uniforms. So, this double hit of resignation and inflation could bust public education permanently.

The Great Resignation impacts schools in an unexpected way. Teachers aren’t resigning, but substitute teachers, lunch aides, special education aides, and bus drivers are. Those jobs have traditionally been done by mothers, who have been forced to take those jobs, because they need flexible jobs that conform to the school year. What other job can you get if you need to be home over the summer and be back by 3:00? None. Schools have taken advantage of women for years to do this grunt work. They paid them minimum wage and as part time employees, so they didn’t have to provide benefits.

Schools are also saving on labor costs by hiring therapists and special ed professionals from outside agencies, so they don’t have to pay them benefits and deal with a tenured bad-egg. This is the adjunctification of public education, but that’s a topic for another day.

For years, moms, who put themselves on the substitute list, have sat around waiting for a call from the school district at 6am. If they get a call, they have to dash out, take abuse from teenagers, and get a $100 paycheck. If they don’t get a call, they put away their work clothes and don’t get paid. Surprisingly, women aren’t willing to do that anymore. They stopped doing it during the pandemic, and are finding that they don’t miss the money or the grief. So, schools have to hire permanent staff with higher salaries and benefits.

And then inflation is hitting schools, too. Heating bills are going to go up. School books are going to cost more. Everything from printer paper to toilet paper are going to cost more. Taxpayers, who are feeling a crunch, will vote down any tax increases.

Government just gave schools fat checks to deal with the problems with remote education. How are schools spending that money? Are they spending on tutoring and summer school to help kids struggling with learning lag? Or are they using that money to deal with the coming budget crisis. Is the money going to be used to keep the lights on in the buildings? And what’s going to happen when the money dries up in two years?

Of course, I want the federal COVID money to go to the kids. They’ve been through hell and need help. Kids first. But the school budget crisis can’t be avoided and will involve some seriously unpopular cuts.

33 thoughts on “The Economics of Schools

  1. The people I am aware of who are quitting are deciding to live cooperatively with others – not because the money didn’t make a difference. They pick up gig work (e.g., walking dogs, selling on etsy) and accept a lower standard of living (maybe sharing rooms with other adults) because the job was much more stressful than just living destitute is.


  2. Remembering that I’m commenting from the other side of the world, and in a really different education funding environment.

    The Government here has just mandated at all teachers (and actually all adults on school premises – apart from a brief pick-up/drop-off) have to be vaccinated.
    This kicked into force yesterday (after 2 months of notice for those who weren’t vaccinated to do so).

    [NB: the govt left it up to schools to decide how to open – which is nuts. There’s everything from day-on-day-off; morning/afternoon; half the alphabet at school/half at home – switch after 2 days; through to fully open. And schools are supposed to teach the kids whose parents choose to keep them home as well….]

    We are hearing reports of schools who are down 1-2 teachers – which isn’t hugely significant in a large school, but that might be 75% of the staff in a small rural school.
    Most teachers (apart from the fervently anti-vaccination minority) have given into the pressure and reluctantly got vaccinated (often at the last minute)
    They know that they’ll never get another gig on the same salary and benefits. (govt pays teachers here, and at a good middle-class salary level – they also get paid over school holidays (that’s about 12 weeks in NZ) – unlike the support staff.

    But the minimum-wage teacher aides are another story. Those who don’t believe in vaccination (and there are a range of reasons out there) have other options. The salary has never been enough to live on, so it’s been a part-time-work contribution to the family income. And there are other options out there which pay as well (and are likely to be flexible about hours, etc – in our current employment shortage).
    I’m hearing of a large number of TA staff who are not returning – which will put a lot of pressure on disabled kids, in particular. Anecdotally, I know of one mum who’s been ‘told’ her disabled kid can’t return to school this year, since the teacher aide isn’t vaccinated and the school can’t get a replacement)


    1. There are few schools that mandate vaccinations for their employees, so that’s not a factor here so far. The spec ed aides are leaving for economic reasons.


      1. Interesting. Our state requires vaccines for K-12 employees (including private schools). The school district gets to decide the handling of the religious and medical exemptions and it could be that differing levels of vaccination result


      2. My kiddo says he was told that two teachers retired over vaccination. I think they may have been given exemptions and offered non-student facing jobs, but chose to retire instead. Haven’t heard about the paras/special needs assistants.


      3. A grad school friend (who went again later to get an MA in education policy from GW) quit teaching after last year because of the level of abuse in exurban Virginia.

        She’s picked up a bookstore job. Misses teaching, but the amount of nonsense she was asked to just put up with was too much.


  3. Covid is just burning though here. Cases are up but hospitalization peaked a couple of weeks ago. The largest health system in the area is facing a one day strike tomorrow. They underpay by quite a bit and I think the $500 bonus from last month was taken as kind of a “let them eat cake” by people who were expecting raises.


    1. MH said, “Covid is just burning though here.”

      Nationally, it looks like the winter surge is starting.

      I’ve been surprised before, but I’m really surprised to see Minnesota (!) at 80 new cases per 100k per day and probably still headed up. Michigan is also somehow taking off again (72 cases per 100k per day).

      There are a lot of high vaxx states in the top 10 for cases right now (Minnesota, New Mexico, New Hampshire, Vermont and Colorado). Mortality should be lower, though.


  4. Personally, I think (mostly upper) management and owners as a class have had it too easy to for too long and are about to get culled.


    1. MH said, “Personally, I think (mostly upper) management and owners as a class have had it too easy to for too long and are about to get culled.”

      Could somebody in India do your job?

      More importantly, does upper management believe that somebody in India could do your job?


  5. With regard to subs and paras, people aren’t necessarily where they were at the beginning of the pandemic.

    If the family relocated to further out during the pandemic, mom isn’t available to work for their old school district.

    This may also be related to the issue of missing kids.

    This is a dynamic situation, so I’m sure these numbers are not currently accurate, but that articles from Aug. 31 of this year says that 2.6 million kids were switched to homeschooling during the pandemic. As of the writing of that article, there were 5 million kids being homeschooled in the US, with 11% overall and 9.7% of white families with kids, 12.1% of Hispanic families, 8.8% of Asian families, and 16.1% of Black families choosing homeschooling.

    So those moms may be busy homeschooling and/or may be living in a completely different community than at the beginning of the pandemic.


  6. Surely if my job could be sent to India my employer would not be insisting that I must be present in the office rather than continue to work remotely.


    1. I’d say the desire to have people working in person would be a chief reason why a job isn’t outsourced out of the country and that anyone who isn’t working in person needs to think about why their job can’t be sent even more remotely.

      Possibilities: 1) occasional in person work, like team meetings 2) very high value work, for example, you are the CEO 3) language, communication, legal regulations, ethics, 4) training/skills that might mean your replacement will be even more remote, but that you are worth it

      NY Times had an interesting article titled “The Worst of Both Worlds: Zooming From the Office” that talked about a variety of companies and what they are planning going forward. The survey of Manhattan office workers, 8% back full time, 54% fully remote, 40% hybrid was interesting, with the percent fully remote kind of higher than I thought it would be. The rest of the article talks about the issues of hybrid, like remote workers not being able to participate in the meeting, or Zillows Zoom priority which requires everyone to zoom when anyone is remote at the meeting.

      The Worst of Both Worlds: Zooming From the Office


  7. Steve said that Wall Street tried to outsource his job (legal documentation stuff) to Eastern Europe. It didn’t work – time differences, language differences, work ethic issues. But computers might replace him at some point in the near future.


  8. Our school district closed last Friday (after Veteran’s day), citing staffing issues. They said it would be counted as a snow day and made up as necessary. Kiddo said there was a cheer through the hallways and he made good use of the time. So personally no big deal. But, it is a sign of the current times that there would be an unscheduled school closure because of staffing issues.

    Kiddo also says that the school has taken to announcing “can anyone cover Mr. X’s 3rd period class?” over the loud speakers. I’ve joked that he should show up at the office and offer to cover the class.


  9. Apologies for not being up to date with the thread, but I just saw a story on the Detroit 4-day school week story that Laura has in her twitter.

    Oh my gosh.

    “Superintendent Nikolai Vitti said in that statement that he and the school board made the decision “after listening and reflecting on the concerns of school-based leaders, teachers, support staff, students, and families regarding the need for mental health relief, rising COVID cases, and time to more thoroughly clean schools.””

    @#$%^& surface cleaning!

    It’s the zombie COVID migitation policy that just won’t die!

    ““We must all work hard to ensure that we meet or exceed 75% district wide student attendance on these three days or districtwide online learning days will not be a viable option for us the rest of the school year.”
    Districts lose a portion of their state aid if they don’t hit the 75% attendance target.”

    States need to pull the plug on school districts that expect to be paid for school days that they aren’t actually offering.


  10. “But the school budget crisis can’t be avoided and will involve some seriously unpopular cuts.”

    Or some very popular taxes on the rich.


    1. Wendy said, “Or some very popular taxes on the rich.”

      If raising taxes is popular and easy, how do you explain the SALT thing?

      The Trump administration literally did soak the rich on SALT–and now the Democrats have been fighting like Spartans at Thermopylae to get the deductions back…for extremely well-off people.

      “TPC [Tax Policy Center] estimates that in 2021, only about 1.6 percent of middle-income households (those making between about $54,000 and $96,000) would receive any benefit from the increased cap. The average tax cut for all middle-income households: $20.”

      “By contrast, more than half of those in the 90th to 95th percentile (those making between about $254,000 and $366,000) would get a tax cut. Three-quarters of those making between $366,000 and $867,000 (the 95th to 99th percentile) would see their taxes reduced. On average, raising the cap to $72,500 would cut taxes of that latter group by an average of 1.2 percent or about $4,600. They’d receive about 40 percent of the total benefit of the boost in the SALT cap.”


      1. I don’t really know enough about the SALT thing, so I don’t really want to comment on specifics (and I don’t currently have the brain power to self-educate right now). But the optics on SALT is that it was directed at blue states, which is pretty offensive. A more direct approach of higher taxes on very high income brackets has the optics of being pretty non-partisan.


    2. I’m not going to support the SALT deduction (or the carried interest deduction) both of which are wildly regressive at the Federal level. But, SALT is one of the ways that decreases the effect of the higher income/property taxes on the local communities that control them. I don’t know if I’ve seen this analysis, but the money it takes away from the Federal government goes to local governments (not to the individual paying the taxes).

      That is, if I paid 100K in local taxes in a year (I don’t, but, might happen to some, since my city just passed a 7% capital gains tax) and I’m in the 35% tax bracket, I deduct that and pay 35K less in fed taxes. I still paid 100K in local taxes, but now that costs me 65K instead of 135K (I think that’s approximately right, but I haven’t done the math perfectly, and not exactly because of the AMT, phasing out of deductions at high levels, and other complications in the tax code).

      So, SALT actually helps school districts raise taxes because it reduces Federal taxes on the taxes paid to local government

      The Republicans repealed it because repeal increased taxes mostly for the NE/CA rich.


  11. It’s possible your theories about subs and moms are right for your area, though I wonder how many moms really do sub – I’d be curious to see those numbers. (Seems more likely they would be paraprofessionals.) In my rural community, the only subs I know are retirees, mostly women, and two men, a faculty spouse and a part-time census worker. We have a 45% county vax rate and in most of the surrounding communities, the little rural schools, there have been very few Covid safety measures and all sorts of skepticism. They avoided subbing last year like the plague and though things are better this year, it’s still not appealing for that $100 a day.


    1. Agree that it isn’t moms who were subbing here — mostly it seemed like newly minted teachers who had not yet been hired and retired teachers. The retired teachers are especially likely to stop and the newly minted teachers are more likely to get hired.

      Our private schools seem to rely on retired teachers and permanent subs. The K-8 my children went to has always had a permanent sub on staff. Only 1 for staff of about 25 or so, including specialists. Now, the younger classrooms all have assistant teachers who I presume can cover as subs for occasional absences.

      Yes, having permanent subs on staff is a budget hit, but unless the sub labor is plentiful, probably necessary.


  12. Whether the subs are moms, or retirees, or teachers who haven’t found real jobs yet, it’s not the main point that I’m making here. All those subs, aides, bus drivers have been unpaid and exploited by school districts for years. And they aren’t willing to do that anymore.


    1. Yes, and that is a very good thing. But, school districts are taxpayers and parents. So, it’s taxpayers & parents who have been exploiting all those people (I’m just not a believer in the waste argument unless it is very specific — that is, show me how to revise the budget to get rid of what is being called waste).

      The details are relevant because, I think, as with adjuncts and uber drivers, people have a vision of the underpaid labor they are depending on that justifies, when they think about it, the underpaid labor they are depending on. So the retired teacher who enjoys the work, has a pension, and uses subbing to pick up funny money, or the lawyer who is well paid by their firm who teaches a class as an adjunct or the uber driver who has another job and picks up some extra bucks for his cool shoes all make it feel OK. But we’re coming to recognize that’s not the people we are relying on.

      I think the underpaid, unsupported labor that the system has been depending on, in education, but also health care, nursing homes, support for people with disabilities is going to continue to be harder to find. Will it last long enough that we look for real solutions and what will they be?

      Those who don’t see the solution as higher labor costs for the institution funded from somewhere, taxpayers, tuition, . . . (college, school, hospital, . . . ) usually cite administrative costs as where the money will come from. One of your posts, for example, having one principal for the 1500 elementary school students spread over 5 schools. I personally don’t think that would work, at least in the schools I pay attention to most frequently. In NJ, though, maybe experiments with bigger school districts and bigger schools are necessary — when I’ve looked at the public records in NJ, I’m usually surprised by the number of superintendents getting superintendent salaries for much smaller districts. But, are parents going to give up their personal districts? Others might argue for tech solutions, lower paid labor, or less labor. I just don’t see any of those solutions working for high touch work (K-12, health care, elderly/disability support, . . .).


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