Last week Connecticut’s travel and tourism proponents made the case that a dollar of spending to market our state can yield nine times that amount in revenues. Facing cuts in state spending, it’s a good argument for the industry to make: Don’t make cuts that will only make the revenue picture worse down the road. To see a similar argument applied to public education spending as part of a fiscal stimulus package, read on.
We have all heard many times, and most of us believe, that an investment in education is an investment in the future well being of the state and its citizens. But we tend to see this benefit as being paid out years down the road when our children grow into productive adults making their own contributions to the economies and social fabric of their communities. Of course some move on to make those contributions elsewhere, but in general, we recognize a long term payback.
But, what about the near term? Can a case be made that education spending in the present also yields an immediate economic benefit that should be considered before cutting aid to our schools? The answer is yes, according to Richard Sims, Ph.D., Chief Economist at the National Education Association. Using an econometric model of Connecticut, Dr. Sims has concluded that an education dollar creates more jobs in communities than any other industry. In part, his conclusion is based on the fact that education spending is 80-85% labor driven, as opposed to the 50% or less typical of corporate, manufacturing and other sectors.
In a time of rising unemployment, it follows that including education aid in a comprehensive economic stimulus package would help sustain and improve employment to a greater extents than other types of investments. The model goes on to show the employment impact of education spending comes in three relatively equal parts—one third teachers and other certified staff, one third support staff and other school related employment, and one third non education related employment in the community. The first two components are clear enough. An education stimulus package will save education jobs that otherwise seem certain to be lost if school spending is cut or even level funded.
But the remaining third, the impact on non-education employment in a community, requires a little explanation. Dr. Sims’ analysis indicates that education is heavily concentrated within the community being served. Pretty much all education employees live in or near the towns in which they work. The income they earn therefore is largely expended in the area, supporting all other facets of the local economy—housing, services, retail, entertainment. Consequently, these non-education community industries also benefit if education employment stays intact—and conversely, stand to lose if significant numbers of education workers become unemployed.
Comparatively, stimulus spending in the private sector does not produce the same degree of local economic benefit, because much of the income generated goes to distant corporate venues—even labor outsourced overseas in many cases.
For more on education funding, visit the NEA website at: http://www.nea.org/home/1019.htm
I think his model makes an interesting, and not often heard, case for sustaining education spending in tough economic times. Setting aside the usual arguments emphasizing the many values and virtues of education, it offers a practical basis. Education spending can do more for local economies than other types of incentive spending alternatives.
I’ll admit I’m a Republican, but seems that giving business federal dollars is the way to go. The new administration’s integrity is on the line here. They should not put their stock in education largely because the public perceives there is too much waste.
Despite some public perception that there is waste in all public service agencies, at all levels of government–education included–I think that in this case the integrity of the administration would be well served to follow through on the education funding commitments made by the Federal government long ago when it first put these mandates in place. My mother always warned me that every promise is a debt, and she also like to add better late than never. I just see this as an opportunity at a very critical time for the Feds to relieve some of the burden carried these many years under directives from Congress by state and local governments. I don’t see it as a call to increase spending–rather a call to spread the cost burden more evenly, and I realize it’s still tax dollars we’re talking about. But right now state and local tax bases are less able to sustain funding for critical public services–not just education–than the Federal government. Thanks for your comments.
I think your comments make some good logical sense. Being involved on the BOE in my town as well as the local government I can agree that a large portion of the local budget is made of of:
1) educational cost
2) of the educational cost about 80% is labor related costs.
Unfortunately, the short sightedness of the argument is that using stimulus money to hire additional staff is only a stop gap measure. When the stimulus funding ends, who is going to pay for the additional staff ? The burden then falls on the community who will see taxes increase 7 -15% or more in one year. Most communities in Connecticut cannot handle such an increase and will defeat budgets until they fall into a more reasonable range. Such actions will force the school system to lay those teachers off again, totally defeating the purpose of the stimulus. The hiring must occur in areas where the hiring will be self sustaining or else the stimulus money is wasted.
Although the argument is a good one, its long term effectiveness is self defeating.