Schansberg: K-12 Options

November 20, 2021

by ERIC SCHANSBERG, Ph.D.

The recent statewide elections in Virginia have brought K-12 education back to the front burner. A former Democrat governor lost — in a state handily won by President Biden a year ago. The chief causes: declining popularity of Democrats on the national stage (compared with 2020) and trouble with K-12 on the campaign trail in Virginia. 

But, really, outside of a war on our soil, what public policy topic is more important than K-12? It’s important at a Macro level. An economy cannot prosper if its people are not educated. It’s important at a Micro level. What’s worse than a young adult with an 8th-grade education going into a global economy? Beyond economics and personal finance, it’s difficult to estimate the impact of a poor education on personal choices, citizenship, democracy, crime, etc. Or from another popular angle, if one is concerned about “systemic racism,” what other topic is bigger? 

We largely trust K-12 to government — with its “market share” of 85 percent in public schools. For most parents, there is one public school option — the school closest to your house. So, for many people — in particular, those with fewer financial resources — the only significant choice is a single government-run entity with tremendous monopoly power over them. 

As an economist, it’s surprising that so many people have so much faith in a system like this. Imagine a “public restaurant” system that operates the same way. Food is really important and we’re unimpressed by food stamps as a policy to get food to the indigent. So, the government decides to run a restaurant in every neighborhood with free meals for all, financed by taxpayers.

To make the analogy more apt, you probably can’t cook at home. (That’d be too difficult for most people — like homeschooling.) And you probably can’t afford private restaurants — on top of the taxes you pay. So, most people will go to the government-run restaurant in their neighborhood. What are the incentives in such a system for the restaurant managers? What concerns would we have? What problems should we anticipate? 

First, we’d expect trouble with quality. In the restaurant analogy, the food could be fair or poor. The service could be good or lousy. There might be some extra hair in your food. If you’re not satisfied, what are you going to do about it? Not much. In the case of K-12, quality is the greatest concern for inner-city schools. Family structure-stability is surely a significant problem here. But a government-run entity with monopoly power can hardly be expected to be the ideal approach.

Second, you’d expect trouble with bureaucracy and cost (to taxpayers). Government entities are famous for inefficiency. With education, we see a high proportion of non-teaching personnel (compared with private schools). And taxpayers spend about $15,000 per student in K-12 — $300,000 per classroom of 20. In Indiana, it’s about $12,000. 

Third, you’d expect “menu troubles.” Maybe every night is “Burrito Night,” but you don’t like burritos. Too bad. In the case of education, it’s the “social menu” that often annoys: mask mandates and vaccine requirements, sex education and what to do with “gender,” new math and how much standardized testing. Independent of your positions on such topics, the larger issue is the one-size-fits-all approach of a government monopoly. Somebody is bound to get bent. 

And this is what happened in Virginia. Concerns about one school system’s approach to a sexual assault. Concerns about “Critical Race Theory” in the curriculum. Concerns about schools being closed (or not) and students being masked (or not) during Covid. Concerns about school boards that seen as unresponsive. And one of the candidates (a former governor) who said “I don’t think parents should be telling schools what they should teach” in the final debate. 

Why have we settled for this system and these results in K-12? Unfortunately, few people really care about the poor. (Democrats generally prefer lip service, bureaucracy, and powerful interest groups. GOP’ers generally just don’t care.) The folks who are excited about “systemic racism” strangely apply their concern to a few policy issues, ignoring larger topics such as K-12. But now in Virginia — and probably beyond — the middle class has been awakened, since the powers-that-be are seen as messing with their children. 

If one is pro-choice on K-12, how could we increase competition in the market and choice for parents? First, you could allow people to attend the government-run restaurant of their choice. Second, you could allow certain government-run restaurants to operate with lower budgets and much more discretion. (This is akin to “charter schools.” Indiana has had these for years; Kentucky recently allowed them, but hasn’t funded them yet.) Third, you could do “backpack funding” — where the monies follow consumers to private or public providers. (This is what we do with housing vouchers, food stamps, Medicaid/Medicare, and the G.I. Bill for higher education.) 

Producers never want competition; monopolists want to preserve their power. But the stakes are too high — for the poor and the middle-class, for the individual and the country. Let’s promote choice and competition in K-12. 

D. Eric Schansberg, Ph.D., an adjunct scholar of the Indiana Policy Review Foundation, is Professor of Economics at Indiana University Southeast and the author of Poor Policy: How Government Harms the Poor. 



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