A Little Education Math

With the on-going controversy in Wisconsin about teacher compensation and collective bargaining issues, the sides seemed to have hardened. One side sports the green eye shades claiming there is no more money and teacher compensation needs to be limited. The opposite side claims compassion for teachers and concern for the students. We submit here that the entire structure of public education with a state monopoly teamed with public service unions is inefficient and results in lower compensation for teachers than would otherwise be the case.

I live in Prince George’s County, Maryland, a suburb of Washington DC with a median household income of nearly $72,000, substantially higher than the $52,000 median household income of the entire US. By any reasonable definition, the county can be considered affluent. Perhaps, it is not as affluent as other counties in the Washington, DC area, but it is certainly affluent by national standards.

With the weak economy, the county like others is struggling to maintain spending. Part of the problem is decreased local revenues and part of it is reduced revenues from the similarly pinched state of Maryland. However, a closer look a the numbers is revealing.

The restricted school system budget of Prince Georges County this year is $1.6 billion dollars, which represents a $155 million shortfall. The school system has an enrollment of about 128,000 students for a per student expenditure of about $12,500. In the county, the average class size (although there is variation at different grade levels) is 27 students. Hence, each class room represents an expenditure of $350,000. An average teacher earns about $55,000. Let us make the extremely generous assumption, that total compensation including medical care and retirement is about $100,000 per teacher. It still means that a classroom costs at least three and half times the cost of the primary education provider, the teacher.

These numbers are very approximate. There are legitimate costs outside the classroom including school buses and bus drivers, school nurses, and counselors. In addition, some students have special needs that require greater-than-average spending. Nonetheless, it seems that a disproportionate amount of spending is not going directly into the class room.

If we offered as a choice a voucher to parents, even a smaller amount per student of $10,000 to spend at any school, public or private, my guess is that parents would find options for which teacher compensation would be greater both relative to total expenditure and in absolute terms. This system would offer better education at a ower cost and probably with higher teacher compensation.

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