June 05, 2018
The NYT had a piece documenting the drop in inflation-adjusted spending per student nationally and in many of the states that have been seeing strikes and protests by teachers. The analysis is very useful, but a figure at the top of the piece may have given readers a misleading impression.
The figure shows nationwide inflation-adjusted spending per pupil since 1970. It shows a steady rise until the Great Recession, then a fall with the downturn and a partial recovery in the last few years. It notes that we are not yet back to the pre-recession level of spending.
This may lead people to believe that a proper baseline is a constant real level of spending. This is not the case.
Suppose that we have one teacher for every twenty students. If we keep this ratio, and the teacher’s inflation-adjusted pay rises in step with overall productivity growth, then spending per student would rise in step with overall productivity growth. In that case, we would expect to see inflation-adjusted spending per student rise in step with the economy’s productivity growth, not just inflation.
The full story on spending is somewhat more complicated. Growing productivity can lead to savings in some areas of education, but insofar as a major expense is for teachers, and we don’t have rising student to teacher ratios, the baseline should be that inflation-adjusted per pupil spending rises roughly in step with productivity growth, not that it stays flat.
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