Schools Are Obsolete II

Not long ago, New York City Comptroller Scott Stringer, as part of a campaign to obtain the support of the United Federation of Teachers, released a report critical of the financial practices of the charter school network Success Academy. A page 21, the report noted:

“Success Academy invoices to DOE bi-monthly for per pupil funding for general and special education services that it provides to students who reside in New York City. For Fiscal Year 2015, Success Academy was entitled to receive $13,777 per year for each of its students who reside in New York City. Further, Success Academy was entitled to receive an additional $10,390 per year for each student that was mandated to receive and was provided special education services for between 20 to 60 percent of the school instructional week, and an additional $19,049 per year for each student that was mandated to receive and was provided special education services for more than 60 percent of the school instructional week.”

My first impression is that’s a whole lotta money. For non-special education children, that is $275,540 per 20 students and $165,324 per 12 students. On the other hand, I know that this is less than the amount NYC district schools receive. Does that make me think that charter schools are a better deal? In part. But what it mostly does is further convinces me that education needs to be rethought and reorganized from the ground up. For that amount of money, or even less money, a new system, unencumbered by the deals, favors, practices and privileges of the past, could provide far better values for students, younger and future teachers and taxpayers alike. For the existing system, school reform has been defeated and its time to face it. Only by making a clean break will anything get better, or even avoid getting worse.

Based on Census Bureau data, I know that total spending per student in the NYC district schools was $24,000 in FY 2014, so it would have been higher in FY 2015 – the year of Stinger’s data.

At the time, NYC was spending $14,655 per student just for instructional wages and benefits (mostly teachers), not including the cost of administrators, support staff, administration, building maintenance and operation, school transportation, school lunches, etc. The real cost was actually higher still, because Mayor DeBlasio has signed a back-loaded contract with the United Federation of Teachers that will drastically increase teacher pay, but only after he is re-elected (or defeated) this year. And the full cost of the 1995, 2000 and 2008 retroactive pension increases, which primarily benefitted already retired or soon to retire teachers, is not being fully paid for yet. The cost of these increases, described as “costing nothing” at the time, keeps getting hidden, deferred and thus increased years or decades after the fact.

While I knew what the district schools were getting, based on publicly-available data that has been compiled and released for decades, I had no idea how much charter schools were getting. Only what had been announced to and reported by the press – that they received the same amount as district schools per child. And that according to some media reports based on some press releases by organizations affiliated with existing interests, that charter schools were in fact getting MORE money per child than district schools. That’s what the general public was told. That is what no one contradicted.

The per student spending figures in Stringer’s report for the Success Academy are $13,777 for most children, $24,167 for those requiring partial special education services, and either $32,826 or $43,216 for those requiring more special education services, depending on what is meant by the second “additional.”   The charter figures include everything with the exception of a modest one-time grant that charters get when starting up ($51,000, plus an additional ~$400 per kid for the first year), and two ongoing grant/tuition assistance programs, subject to annual appropriations, that add up to about $400 per student. The latest DOE figures I can find that are broken down similarly are from the 2014-2015 school year. Since these figures are lower than the per-student figures reported to the Census Bureau I assume these are operating expenses and do not include debt service and capital spending.

Here is the latest city reporting of the costs at one district school and the NYC system as a whole.

School Year 2014 – 2015
This School
Total Dollars Spent at this School $16,476,310
Total Per Student Cost in this School $24,053
Total Per Student Spending for General Ed Students $19,305
Total Per Student Spending for Special Ed Students $80,672
Per Student Spending on Classroom Teacher Salaries $10,132
Per Student Spending on Summer and After School Programs $430
Per Student Spending on Professional Development $790
Entire System
Total Per Student Cost For Entire System $21,667
Total Per Student Spending for General Ed Students $17,199
Total Per Student Spending for Special Ed Students $54,188
Per Student Spending on Classroom Teacher Salaries $8,123
Per Student Spending on Summer and After School Programs $631
Per Student Spending on Professional Development $380


For the entire system, that is $17,199 per student for district general education students, compared with $13,777 for the Success Academy. And $54,188 per student for District special education students, far higher than the $24,167 and $32,186 or $43,216 the Success Academy was paid. It appears the public has been misled about funding for charter schools as compared with district schools. Perhaps they got the same money at first, but then this changed, and the change was never reported on.

Are the higher NYC district costs the cost of bureaucracy? No, because I know for a fact that NYC district schools spend far less on General Administration, School Administration, Instructional Staff Support, and Pupil Support than school districts in the rest of the state, and far less than the U.S. average when adjusted for the local cost of living. The district costs are high because of the cost of the richest retirement benefits anywhere made richer, deferring some of those costs to the future, causing them to explode. And, to a lesser extent, the cost of teacher salaries. The $8,123 per student spent on teachers by NYC District schools is $162,460 per 20 students or $97,476 per 12 students. And going up, a hell of a lot, in the next two years.

Meanwhile, an Astroturf group sponsored by the UFT is demanding $billions more for NY State public schools over the next two years. And thus less funding for other services, such as mass transit, social services for the poor, affordable housing, anything. The demanded increase in school funding is not in exchange for any improvements to education. The extra money is demanded in exchange for at best nothing, at worst less of a cutback in what is received.

Based on NYC school enrollment data,

Just for the 921,927 students without disabilities, just replacing district schools with charter schools could have saved NYC $3.16 billion in FY 2015, and would do so once all the pension costs of the District schools were paid off.

That is an underestimate. There is constant pressure on Charter Schools, from people such as Comptroller Stringer, to charge less, accept more challenging children, and do a better job or be replaced. For district schools that fight is essentially over and has become counterproductive. And whatever you pay charter schools for education this year is all they will get for providing education this year. Five or ten or 20 years from now, NYC will not have to raise taxes or cut services to pay for charter school education in 2017. Whereas district school employees can have what they were paid for work done this year hugely increased tomorrow, or a decade from now, or 20 years from now via retroactive pension increases that are never publicly debated and simply take place at 3 am. In that sense, the data on what NYC district schools are spending is minimum, not a fact.

What is $3.16 billion? You learn in Economics 101 that the actual “cost” of an expenditure is not pieces of paper with pictures and number on them. It is the lost opportunity to use the same resources for something else. Whatever taxpayers might have chosen if taxes were thus lower. Or, in two just years, the entire cost of Phase II of the Second Avenue Subway, even at the massively inflated cost NYC Transit is charged in its capital program. Or 10,000 new subsidized housing units per year at $300,000 each. Etc.

The huge cost construction contractors charge the MTA, NYC’s extremely expensive school bus contracts, and New York State’s high cost Medicaid program, show that “privatization” is not a silver bullet in public policy. There is nothing to prevent the charter schools, a decade or two from now, from organizing and using political power to provide less in exchange for demands for more and more and more, just like the public teachers’ unions here in New York. Rather than the private sector vs. unions, the problem is the sense of entitlement that builds up in any powerful organization over the decades. Which is why so few business organizations survive the loss of their founders by more than a generation – customers and workers are eventually offered a better deal by a new organization that is not plagued with that sense of self-serving entitlement. The real question is whether given advances in information technology, should we get rid of schools altogether?

Consider the alternative I discussed previously in this post: teachers working out of their homes, the way music teachers and tutors often do, and supervising just 12 students each who are mostly working at their own pace using laptop computers.

Computers that have instruction, exercises, assignments and tests prepared by the best teachers in the country in association with computer game media and game design experts. In a variety of teaching styles the local teacher can select from, and allowing each child to learn at their own pace with as much individual attention as required. Changing education from the factory system to a cottage industry, supported by a social network.

One economic development idea that has been around for a while is that developing countries may be able to “leapfrog” developed countries such as the U.S. by moving directly to the latest, decentralized technologies and avoiding the extremely high cost of the centralized technologies they have not yet been able to achieve. Rural villages getting electricity from solar panels and avoiding the massive cost of building an electric grid connected to each individual house, for example, or going directly to cellphones and never building a wired telecommunications system to every person.

Most of the developing world lacks schools, or has schools that people living near the subsistence level are somehow required to pay for. Recently I read about a new business venture in China that allow parents there to have access to teachers in the United States, not physically present at all, via the internet.

In China, there are hundreds of millions of kids whose parents are willing to pay up if they can get high-quality education. In the U.S. and Canada, teachers are often underpaid—and many have quit the profession because they couldn’t make a decent living. Growth has been explosive. The three-year-old company started this year with 200 teachers and has grown to 5,000, now working with 50,000 children. Next year, Mi anticipates she’ll expand to 25,000 teachers and 200,000 children.

Over the years, education experts and traditional teachers have criticized online learning, arguing that nothing can duplicate the face-to-face interaction of a physical classroom. In China, parents are so bent on getting their kids the best education possible they’re sometimes willing to try untested methods that may or may not provide high-quality education.

For the Chinese, and perhaps many in the developed world, online learning is perhaps better than nothing.

The software works a bit like corporate video-conferencing. The student and teacher appear in boxes on the right-hand side of the screen; images and words appear on the left. A typical 25-minute lesson has about 30 slides and the curriculum builds from session to session so a child can develop their vocabulary and fluency. Parents buy a package of lessons and their children can then select which teachers they want. A block of 72 classes is about $1500, or about $21 each.

My idea was for the federal government or state governments to pay the best teachers and internet/social media workers a big fee up front to develop lessons and assignments, and to then make them available for free online. Many lesson plans and assignments are now being sold directly by teachers on social media for a modest cost each – this would expand on something that is already happening. After that upfront investment, the cost of education would then be in-person tutoring and evaluation. The “middle man” company making a profit on the connection between those teachers and the students would be eliminated.

The article asserts the Chinese pay teachers more than Americans. And how much are the Chinese paying U.S. teachers to teach online?

April Baker, a 42-year-old single mother in Pennsylvania, started teaching with VIPKid in August, in part because of financial pressures from her divorce last year. She teaches most days between 7 a.m. and 9 a.m. and often again from 8 p.m. until midnight. The $20 to $22 an hour she makes helps supplement her income as a fitness instructor for seniors, and the flexible hours allow her to look after her kids.

“It feels so freeing,” says Baker, who has undergrad and graduate degrees in education and worked in the field for about 10 years. “The only issue is the time zone is a challenge.”

Kristie Kellis, a 41-year-old from Minnesota, started teaching with VIPKid a few months ago. She now works 40 to 45 hours a week, usually from 3 a.m. to 8 a.m., in addition to her day job teaching at a local university. She’s paid about $21 an hour as long as she works at least 20 hours a week, and then gets bonuses for teaching more hours or during holidays. She says it works out to about $4,000 a month plus bonuses.


THAT’S ALL?  If $21 per hour looks like a good deal to any teacher this shows just how much flexibility is valued. And how little rich retirement benefits (especially those you don’t get, only prior hires get) are valued, at least in the short run.

However, let us get back to a possible DEVELOPED COUNTRY alternative using Success Academy per-student spending figures, with a teacher that is actually physically present right in the neighborhood, one that provides child-care as well as schooling from pre-K to Grade 8.

The teacher would work at home with 12 students and 12 laptops, with some support provided by one of the parents, a different one each day. Say the 12 kids had 18 parents. Each would have to be available on a weekday once every 3 ½ weeks for their child to take part in this alternative form of schooling. About the number of half days NYC schools had back when we were trying to figure out where our kids would go to school.

For general education students, the Success Academy was paid $13,777 each. Two years ago – presumably (though perhaps not) more today.

NYC District schools paid $8,123 per student in teacher wages and salaries. Let’s match that. That is an average of $97,500 per 12 students, more for more experienced teachers, less for those just starting out.   Add something reasonable for benefits – something more like, but better than, most other workers get. How about 33 percent of pay on average? That’s $7,315 for the employer’s share of FICA taxes, on average, perhaps $10,000 for the employer cost of health insurance (less for individual coverage, more for family coverage), leaving $14,860, on average, for the employer contribution to the 401K.

That’s about $10,800 per student or $129,600 in total wages and benefits for each at home teacher in the network, on average. Plus any additional money parents pay them to watch the kids in after school hours or in the summer, if they choose to work those hours.

According to American Community Survey data, the median work earnings of workers age 25-plus in 2015 in metro New York was $60,355 for those with bachelor’s degrees and $80,514 for those with graduate or professional degrees. In cash. Generally with benefits that cost their employers far less than 33 percent of payroll. Some of those workers are part time, but teachers generally get summers off.

I’ve proposed an average teacher cash pay of $97,500 with summers off. Perhaps starting at $60,000, about what the average college graduate was paid in metro New York over their whole career, and running up to $130,000, far more than the average person with a graduate degree. Teachers would thus be paid far more than those who would be paying for their services, even without providing after-school or summer school child-care, if they taught 12 students. But if they taught fewer than 12 general education students they would be paid less. Like everyone else, teachers would have to convince parents and students to use their services, with help from the network they were in.

That kind of average pay with a class size of 12? How is this possible? By not having one year or more in retirement for each year worked, and not having as many out-of-classroom assignments for teachers. The current ratio of students per instructional workers (including administrators) is around 10 in the U.S., slightly more than 8 in the NYC district schools, and even lower in the district schools in the rest of the state, were jobs are being preserved in places where enrollment is falling.

For the imagined cottage industry education network there would be one principal-equivalent supervisor per 20 teachers, who would also cover the days when a teacher was sick. Taking that opportunity to see how that teacher and their students were doing.  If one assumes that the supervisor would cost $181,500 in wages and benefits, with a salary somewhat higher than the highest paid teacher, the cost of the supervisor would be about $750 per student. Subtracting the $10,800 per student for teacher wages and benefits and $750 for the supervisor would leave about $2,230 per child for other things.

Lunch? At $3 per student, that would be $540 for the year – the actual cost would probably be lower. The meal could be prepared by the teacher with help from the students, who would thus learn to cook, and parent.   Clean-up? The teacher would do it with help from the students, who would thus learn how to clean. School transportation? The teacher would live in the neighborhood, and the children would walk. They would also walk and take mass transit to parks and playgrounds, libraries and museums. Learning how to navigate their community. Perhaps in 7th or 8th grade they’d start riding bicycles, after having been taught how to do so safely.

That would leave $1,690 per child per year for teaching supplies. You can get a good laptop for about $500, and a teacher wouldn’t have to buy a new one for each child every year. The cost could be $200 per year, depending on how fast the children broke them. High speed internet and router? Perhaps $100 per month, with a group plan arranged by the network. In this model the lessons and assignments would be available for little or nothing, with the government having paid teachers and IT workers up front to produce them. So the teacher would have to come up with some other way to spend the additional $1,500 per student or so.

What about special education? Using the Success Academy payment levels, a teacher that gained certification to teach partially disabled students in a mainstreamed setting could get paid an extra $19,000 in cash. Or the same amount in cash, with two fewer students. This would be something like Park Slope’s popular Children’s School, except that the disabled student would generally be a neighbor.

For the more severely disabled, if a home setting were possible, the same pay could be had with a class size of just three or four. A friend whose child has autism fought with the state of New Jersey for years to get the state to pay for education in just such a setting, rather than in a factory school setting.

And what would a teacher’s career be like in this sort of cottage industry network? Their first five years might be spent teaching, and being trained, in a “mothership” regular school that acted as a central node for the network. That school would make a school building experience available to those that wanted it.

Then the teacher would start working from home, perhaps conveniently when they had become a parent themselves. Rather than teaching the same grade every year, with the children passed on to other area teachers, he or she could have the option to keep the same children for a decade, right from pre-K to grade 8. Learning a new grade, or math vs. English, wouldn’t be as hard if most of the instructing was done by other teachers, via programs and videos on the laptop.

A teacher could teach four sets of children in 40 years, or two or three sets in 20 or 30 years with some time off or from work or in a different occupation, or three sets in 30 years and then more years as a supervisor/substitute.  The more years a teacher worked as such, the more would be contributed to their future retirement. “Collaboration” could happen in the evening online, or in meetings with other teachers at parks, playgrounds and libraries, or back at the “mothership.”

This is the kind of ground-up thinking that the Campaign for Fiscal Equity chose not to do when they sought to quantify what a “sound basic education” costs, during the lawsuit in the 1990s. Instead, they used actual spending figures from the most expensive school districts in the highest school spending state in the country (New York) as the benchmark of what education ought to cost. Now, a couple of decades later, NYC is spending that much or more (adjusted for inflation) in its district schools. But the most wasteful and gold-plated schools are spending even more, leading to demands for even more money.

But this kind of ground up thinking that shows what could be possible given the money already paid to charter schools. Let alone the much higher amount spent in district schools, or the even higher amount groups funded by the teachers’ unions are demanding.

In the wake of Generation Greed, younger generations are being paid less, taxed more, and yet faced with reduced money available for actual public services and benefits, now and the future. Public AND private sector investment has been inadequate for decade. And in the future more and more money earned from work done in the United States will be paid to foreign creditors, as a result of 35 years (and counting) of consuming more than we produce, spending more than we earn, importing more than we export, and not saving for retirement, in he recent past.

Completely new ways of doing things, as good but less expensive, will be required to ensure a good life across the board, not just in education.   And the tool that is available is the one sector of our economy that has had a high level of investment over the past 35 years – information technology and social media. It’s what we have. It’s the one thing that’s getting cheaper and better. It may or may not be the best possible future, but regardless, it is the only way forward.


2 thoughts on “Schools Are Obsolete II

    1. larrylittlefield Post author

      No I hadn’t seen it, but it’s interesting.

      In theory if each child being supervised by a teacher were spending most of the time working on their own on a laptop, they could be in different grades. That might be a huge benefit in rural areas, where the current practice is to spend big bucks busing kids long distances to school. Instead, kids from a small area could share a teacher, with the long distance busing limited to certain get togethers in town.

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