Tag Archives: Childcare

Parents and the Two Income Trap

One of the dimensions of force in the education reform debate is child-care, with both parents and large employers viewing schools primarily as a way to turn children into adults with specifics skills, attitudes, and knowledge. Of the three dimensions of force (money, power, and childcare), childcare is the one with the least complex. While teachers and publishers battle each other for the chance to divert money away from children and to themselves, and while States and Districts squabble over political power, parents and large employers do not disagree about much. Both desire children to become productive members of society.

Importantly, both also suffer from a collective action problem. That is, the cost for making America’s education system world-class is high, and any individual parent or employer can opt-out by simply renting better childcare on their own. For employers this means paying slightly more for one of the competent workers, and for parents this means paying slightly more for one of the competent schools. The consequences for employers and employees of the first part of this is clear: a greater labor cost means a higher standard of living (and least in the short run) for competent workers, and greater automation and outsourcing to compensating for it, leading to a lower standard of living (at least in the short run) for those automated or outsourced out of a job.

The consequences for parents are more profound.

The K-12 education market in the United States is profoundly warped. Parents typically buy access to good schools through pay rent or mortgages in good school districts. Because the teaching profession has been lobotomized through low wages, sending children to many schools would be morally tantimount to child abuse. Bidding wars thus erupt to gain access to these good schools, in the forms of expensive mortgages and high rents. People who actually own this property (apartment managers, real estate developers, and mortgage holders) become rentiers who profit at the expense of parents trying to provide a better life for their children. (Thus, landowners are an important rentier class in the education debate, along with teachers and publishers).

This leads many parents to face what Elizabeth Warren called “the two income trap.” The bidding war for good schools, along with the breakdown of widespread sexual discrimination, encourages both men and women to work, and use the excess income to buy housing near a good school. This means that if the husband loses work for whatever reason, the wife cannot temporarily increase the family’s income by taking additional part-time work. Further, in the event of a medical emergency in the family, the wife cannot act as a “free” caregiver. In both cases, America’s two-earner encouraged by our bad schools increases the financial risks of families, and thus increases domestic violence, divorce, and economic ruin.

While the low quality of America’s teacher workforce is certainly one reason for this, others exist as well. America’s education management force is low quality as well. Further, peers matter — who a child goes to school with matters quite a lot. Parents (meaning parents who are actually engaged with and concerned for their child’s future) can reasonable expect a school to be better if fewer students from low-income households attend it. Thus, a brutal but effectve way to increase the quality of schools for many parents would be to exclude students from communities that historically are not focused on education. Brown v. Board of Education and other cases have made this policy untenable, however, leading to more low-income parents to be priced out of good schools because they now have economic competition from communities of comparative earning ability but with a broken pipeline to class mobility.

But in either case, the problems remain. And the economic stress bad schools place on parents mean that solutions that require paying teachers more — such as turning teaching into a profession — may be impractical.

They Want Money

Different forces in the education reform debate are fighting over different resources. States and school boards are fighting over power. Parents and Large-Scale Consumers of Educated Workers are fighting over childcare. And teachers and publishers are fighting over money.

States and School Boards both focus on power. Every organization wants to exist on its own terms, without having to bow or beg from others. Both States and school boards have the ability to raise taxes, hire and fire workers, and impact the lives of many citizens through decisions related to children. Both are naturally annoyed by the power of the other. From the perspective of states and school boards, education reform is just an opportunity for States to disempower school boards and aggrandize themselves. States have been largely successful in their struggle.

Parents and Large-Scale Consumers focus on childcare. From the perspective of parents, “childcare” means a place you that will take care of children without messing up their features while parents work. What this means depends on social class. For middle and high class parents, schools should not interfere with the natural progression of children to college or other advanced training. For low class parents, schools should not teach children to become socially awkward or talk back. Large-Scale Consumers of Educated Workers, by contrast, want future laborers who are highly productive (that is, can be hired with an expectation of a large return on capital)

While States v. School Boards fight over power is relatively straightforward, the fight over child-care is more complex. First, Parents are highly mobile, and can move out in and out of school boards, while Large-Scale Consumers of Educated Workers are immobile. (While there are often multiple local schools within driving of a job, for political reasons Large-Scale Consumers of Educated Workers prefer to hire in a country proportionally to its revenues from that country.) Further, Parent are risk-adverse, while Large-Scale Consumers are risk-tolerant, when it comes to individual students.

For instance, consider these two possible trade-offs

  • All students in a school become factory drones v. More students talk back to their parents
  • All students in a school go to college v. Some go to college, some start businesses, some fall behind

While the details of these trade-offs are different (low income parents see short-term costs as catastrophic, while high income parents have a future time orientation and so are risk-adverse about future events. Because of the very high rewards for education in the modern economy (as pointed out by the ‘Occupy’ movement), the difference in return-on-investment between a very highly educated worker and a college-educated worker is higher than between a college-educated worker and a high-school-educated worker, but because middle and high class parents fear that it will be their child who does not go to college, they are intolerant of policies that would allow some students to prosper and others to flail.

This fight appears to have been conceded before it began by Large-Scale Consumers of Educated Workers. Instead, Large-Scale Consumers and Parents seem to be working together to create a public education system that creates a floor in terms of proficiency, with Large-Scale Consumers content to allow risky decision to be made after high school graduation.

Teachers and Publishers fight over money. For both Teachers and Parents, education funding is a source of money that can be milked to support lifestyles that could not otherwise be afforded. Teacher and Publishers tend to be active in the political space in order to collect “rents” — to get States and School Boards to provide a greater return-on-investment to their efforts than could be achieved in a free market. Both Teachers and Publishers are rentiers, primarily concerned with improving their own bottom-lines at the expense of children put in their care.

States and School Boards are neutral to the outcomes of education — they simply want to control it. Parents and Large Scale Consumers of Educated Workers both want good education systems, but different in their risk tolerance. Both Teachers and Publishers are essentially parasitical to schools, seeking to divert resources obtained by States and School Boards, at the behest of Parents and Large-Scale Consumers, towards themselves away from children. (Though in the best tradition of marketing, where you take your greatest weakness and claim it is a feature, both Teachers and Publishers identify their own income as being ‘for’ children.)

Education Reform in America is largely a function of the alignment and intelligence of six forces along these three axes. The future of education reform could be predicted if we only knew who would get the power, who would define proper childcare, and who profits.