Chicago Should Spin Off Its Failing Public Schools

As measured by student test scores and adjusted for budget ($13,000 per student (source)), Chicago has some of the world’s least effective schools. The teachers earn an average of $76,000 per year, but with health care, retirement, and other benefits, the true cost is probably closer to $150,000 per year (more than $200,000 per year for a teacher working a standard full-year schedule rather than just for nine months).

A Teach for America graduate can be hired for as little as $25,500 per year (source) and will do at least as good a job (seeĀ this Stanford study). It would appear that Chicago thus has a golden opportunity to shed crushing pension and health care obligations by spinning off and decentralizing its public school system.

Chicago could simply create a non-profit organisation for each school, give the administrative jobs within that school to existing administrators (presumably they are not on strike), fund those new non-profit organisations with $13,000 per student, and let the administrators hire whatever teachers they can find (including hiring from among the currently striking teachers) at market-clearing salaries and with a standard defined contribution retirement plan (rather than the defined benefit plan that has led to the Chicago Public School’s billion-dollar deficit).

Now that Obamacare is available, give employees higher salaries and let them purchase health insurance from the Obamarkets.

For students in the Chicago schools, obviously the biggest problem is that they aren’t learning much. For childless taxpayers, however, the biggest problem is that an ageing workforce is owed health care and pension benefits that could only be affordable in an economy with real per-capita GDP growth of 5 per cent annually (instead of the 0-1 per cent that we have).

It would seem as though there is no better time to declare the experiment of a centralized school system run by the Chicago city government to be a failed one and, in doing so, spare the taxpayers from future ruin. A decentralized system of publicly-funded non-profit schools would provide at least as good an education, in the very same buildings, at a fraction of the current cost. After that it would be possible to try to do something for the kids, i.e., attempt to ensure that they are receiving an actual education.

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