The Public-School Swindle

I have a relative by marriage who’s a retired public-school teacher. She loved to moan about her “low” pay. She wasn’t alone, of course. Her refrain has been heard throughout the land for decade. Truth be told, however, she and her ilk were and are overpaid, as several commentators have explained (e.g., here, here, and here). The following diagram illustrates the machinations that yield above-market compensation for public-school teachers (and other) “public servants”.

Here’s a step-step-explanation:

1. The diagonal, solid-black lines represent the demand for teachers in the absence of tax-funded (public) schools (D-no pu) and the supply of teachers in the absence of tax-funded schools (S-no pu). The intersection of the S and D curves yields the level of teacher compensation (C-no pu) and employment (E-no pu) that would result were there nothing but private schools. (I am, for now, putting aside the question whether government should require school attendance through a certain age or grade, or dictate what is taught in schools.)

2. The picture changes dramatically with the introduction of tax-funded schools (indicated by the red lines). The supply of teachers for public schools (Spu) is to the left of S-no pu because (a) not all teachers are willing to work in public schools and (b) not all teachers are “qualified” to teach in public schools. The second condition arises when potential teachers have learned too much about the subjects they would teach, at the expense of taking too few (or none) of the “education” courses that enable fairly dim education majors to compile inflated grade-point averages.

3. The horizontal, solid red line indicates the inflated compensation (Cpu) that is offered by tax-funded school systems. This above-market rate of compensation is the product of an inter-scholastic “arms race”, in which school systems — goaded by administrators, teachers, parents, and (often) local businesspersons — seek to outdo the lavishness of other school systems, not only in the compensation of teachers and administrators but also in the number and kinds of non-essential courses and activities, and the lavishness and modernity of facilities and equipment. All of which is paid for (in the main) by taxpayers and consumers who have no say in the matter, but whose income and property can be seized for failure to pay the requisite taxes.

5. Not surprisingly, there are more teachers who are willing to work at public-school rates of compensation than public schools can hire (Epu), even with their inflated budgets. That is why some teachers turn to private schools, others accept substitute-teaching jobs, and some end up doing things like selling used cars. The green lines represent the supply of (Spr) and demand for (Dpr) private-school teachers. and the corresponding compensation of (Cpr) and number of teachers employed by (Epr) private schools.

6. The supply of teachers to private schools consists of (a) those teachers who cannot get jobs with public schools but are willing to teach in private schools and (b) those teachers who abhor the thought of teaching in public schools and are therefore willing to accept lower compensation for the privilege of teaching in private schools. The compensation of private-school teachers is lower than that of public-school teachers because

the compensation of public-school teachers is artificially inflated by the vast amounts of tax money extracted from persons who would not otherwise be in the market for education, let alone public-school education, and

the vastness of the tax burden limits the ability of persons who are in the market for education to pay for private schooling, that it, it artificially reduces the demand for private schooling.

Because the subsidization of public schools, there are far more teachers than would be the case in an entirely private system. Advocates of tax-funded education would count that as a plus, as they would the above-market wages of public-school teachers. In fact, it is a minus, because it means that resources are being diverted to less productive uses than they would be were education an entirely private matter. Moreover, mediocre teachers and administrators — often outfitted with lavish facilities and equipment — are being paid more than necessary to “educate” children in useless subjects, at the expense of taxpayers who could put that money to work providing better homes, relevant training, and more jobs for those same children.

This analysis undoubtedly applies to higher education as well as K-12 education. The presence of tax-funded colleges and universities unnecessarily drives up the cost of higher education and burdens many persons who derive no benefit from it.

In summary, public “education” — at all levels — is not just a rip-off of taxpayers, it is also an employment scheme for incompetents (especially at the K-12 level) and a paternalistic redirection of resources to second- and third-best uses. And, to top it off, public education has led to the creation of an army of left-wing zealots who, for many decades, have inculcated America’s children and young adults in the advantages of collective, non-market, anti-libertarian institutions, where paternalistic “empathy” supplants personal responsibility.

Related reading:
Mark J. Perry, “The Public-Sector Premium for School Teachers“, Carpe Diem, March 3, 2011
Ironman, “How Much Do Public-School Teachers Really Make Compared to Private-School Teachers?“, Political Calculations, March 30, 2017
Andrew J. Biggs, “No, Teachers Are Not Underpaid“, City Journal, April 26, 2018

Politics and Prosperity

“Government is a disease masquerading as its own cure.”

The Public-School Swindle

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