Fixing schools, creating jobs

We’re doing a snap quiz today. Question: How can we improve education and the safety of students and teachers while helping to solve the nation’s #1 economic problem? Answer: Read on…

More than 1.2 million construction workers were out of work in August, and their unemployment rate is about 50 percent higher than the national average. Those numbers look  a little better than they did six months ago, but it’s not because construction firms are hiring. It’s because construction workers are finding jobs outside their industry or giving up their job search. Total construction employment is no higher today than it was a year ago, when the unemployment rate for construction and extraction workers was 16.3 percent.  Millions of years of experience are going to waste as these skilled workers sit idle.

Meanwhile, most of the nation’s 100,000 public schools need repairs, upgrades, and maintenance that have been deferred, sometimes for many years. These repairs are just the kind of work unemployed construction workers have the skills and experience to do — replacing boilers or faulty air conditioning systems, repairing broken tiles, removing or encasing asbestos, making electrical repairs and upgrades, replacing roofs and windows, and making security improvements.

School districts and state education agencies have long lists of deferred maintenance and repair projects. Washington state, for example, has listed $2 billion of projects in hundreds of schools, many of which could be started even while the kids are in school. New York City has a project list with a price tag exceeding $1 billion, which is no surprise when you take into account that some of the city’s schools are more than 100 years old.

The maintenance and repair backlog means inefficient energy use and higher utility costs, roof leaks that damage books and equipment, exposure to mold, asbestos, and fire dangers, and a sense among many schoolchildren and teachers that education really isn’t a local or national priority. And the problem is getting worse. The states and local governments have been hammered by the financial crisis, the recession, high unemployment and falling tax revenues. They have laid off hundreds of thousands of employees and cut back spending however they can. California, for example, has imposed $18 billion of budget cuts on the schools since the Great Recession began three years ago, leaving even less money to address deferred maintenance and repairs.

The only solution to nationwide problems of this magnitude and importance is federal intervention. Congress should enact a jobs program targeted at the infrastructure of our public schools. That program is FAST!, Fix America’s Schools Today, a $50 billion grant program I have proposed with Mary Filardo of the 21st Century School Fund and Jared Bernstein of the Center on Budget and Policy Priorities.

Using existing school aid formulas, Congress could allocate money to the 100 biggest school districts and the state education agencies to put people to work within a matter of weeks. Before winter hits, old, thermally inefficient windows could be replaced, insulation could be added to roofs, old boilers could be swapped out, and tens of thousands of construction workers could be back on the job. By next summer, hundreds of thousands of workers could be employed making improvements to facilities in every school district.

The great thing about this is that this work has to be done eventually, it’s overdue, and there’s no better time than the present to do it. Borrowing costs for the federal government are historically low, material costs are low, and contractors are eager to do the work. Many people say (wrongly) that they and their families never  benefited from the previous stimulus, and most people have trouble identifying anything that was accomplished. But this work will be highly visible and highly appreciated by the 64 million public school students and their families.

The high school my daughter attended was just renovated, six years too late for her.  But it gives me a sense of pride and confidence in the community to see the vastly improved facility and to know that future students will be safer and better served. Legislation like FAST! should have been enacted 10 years ago, but it’s better late than never.

Rumors abound that President Obama will recommend a program like FAST! in his jobs speech at the joint session of Congress on Thursday. If House Speaker John Boehner and his colleagues care about jobs and education, they’ll take him up on this win-win proposition.

Schools confront poverty, why don’t education policies?

In a recent interview, Secretary of Education Arne Duncan reflected on his prior tenure as Chicago schools superintendent:

I come from Chicago where 85 percent of our students live below the poverty line. If children can’t see the blackboard, they’re going to have a hard time learning so we have to get them eyeglasses. We used to get literally tens of thousands of kids eyeglasses every year. If children aren’t fed and are hungry, they’re going to have a hard time concentrating, so we fed tens of thousands of kids three meals a day. We had a couple of thousand kids we were particularly worried about so very quietly we would send them home Friday afternoons with a backpack full of food because we worried about them not eating over the weekend.

Should schools have to do that? No, in a perfect world they wouldn’t have to do that. But we have to deal with reality and whether it’s eyeglasses, food, or physical and emotional safety, we have to address all of those things. And schools can’t do it alone. Non-profits, faith-based institutions — all of us have to work together.

Then asked “All else equal, should we expect more of schools?,” Duncan replied, “We should expect more of society.”

Urging schools to solve vision, nutrition or physical and emotional safety problems by working with “non-profits” and “faith-based institutions” is silly. Voluntary organizations can perform isolated acts of charity, but only government can narrow the vast social inequalities that bring many children to school unprepared to learn.

The Obama Administration’s education program expects nothing of society, and everything from schools. It proposed a “Blueprint” for re-authorizing the Elementary and Secondary Education Act that would hold schools accountable for getting all children “college and career ready” by 2020, whether they can see the blackboard, come to school hungry, or eat on the weekend. And while the “Race to the Top” competition (with funds from federal stimulus appropriations) awarded points to states for the administration’s favored school reforms, states got no points for providing eyeglasses or food, or for improving emotional and physical safety by, for example, adopting suburban zoning reforms that would permit family moves from ghettos to more stable neighborhoods.

The Broader, Bolder Approach to Education campaign convened by the Economic Policy Institute describes many practical programs that could ameliorate hardships that impede children’s ability to flourish in school. Duncan’s interview shows the administration is not oblivious to this need but simply chooses to ignore it.

Business economists differ from House orthodoxy on regulation, uncertainty, and tax hikes

The House Republican majority has spent much of the last year, and will likely spend much of the fall, criticizing what it considers job-killing, uncertainty-generating regulations, and holding fast to the belief that deficit reduction should not include increased taxes. In contrast, the nation’s business economists overwhelmingly think the current regulatory environment is good for the economy, dismiss the possibility that government-caused uncertainty is a major factor holding the economy back, and believe deficit-reduction should include tax hikes.

These findings emerge from a survey  released in August by the National Association for Business Economics. NABE’s survey of 250 of its members, who include both academic business economists and practicing business economists (“those who use economics in the workplace”), contains the following results:

— The vast majority (80%) of those surveyed believe the current regulatory environment is good for American businesses and the overall economy.

— The large majority of business economists believe concerns about economic uncertainty are a proxy for generalized concerns about the bad economy. (That is, the concerns do not reflect business worries about regulation.) Few believe economic uncertainty is a major concern that is holding back economic progress.

— Nearly nine in every 10 business economists believe that attempts to reduce the federal budget deficit should include at least some tax increases. Nearly half support deficit-reduction packages reflecting equal amounts of spending cuts and tax increases or mostly tax increases.

Here are the relevant survey questions, along with breakdown of the respondent answers which were tabulated by the NABE:

Q: In your view, is the current regulatory environment good or bad for American businesses and the overall economy?

— 80%: Good
— 17%: Bad
— 3%: Unsure

Q: When asked about their top economic concerns, many businesses cite “uncertainty” as a major worry, suggesting that continued anxiety is impacting their decision-making process. How concerned are you about “economic uncertainty,” and do you feel that it is a legitimate challenge to economic growth?

— 13%: Americans remain anxious about the economy, and as a result, they are not spending or investing in their businesses. It is a major concern.
— 75%: While Americans remain anxious, “economic uncertainty” is simply a proxy for other economic indicators. Once the economy starts to improve, such anxieties will go away. It is a concern, but not a major one.
— 12%: “Economic uncertainty” is not measurable, so it really has no bearing on the economy or growth. It is not a major concern.

Q: How should Congress attempt to reduce the federal budget deficit?

— 12%: Only with spending cuts.
— 44%: Mostly with spending cuts.
— 37%: Equally with spending cuts and tax increases.
— 6%: Mostly with tax increases.
— 1%: Only with tax increases.

Welcome to ‘Working Economics’

Colleagues, policymakers and working Americans,

Hello and welcome to Working Economics, the new blog of the Economic Policy Institute.  Since its founding in 1986, EPI has had a special focus on the living standards of working families and we have done so for a simple reason: We believe that the measure of a good economy is whether it is providing rising living standards to the vast majority. That is the bottom line and discussions about Gross Domestic Product, productivity, trade or even rising employment must be vitally linked to how they connect to improved economic well-being and quality of life for our nation’s working families. And, for the record, “working families” includes those who want to work but cannot find work as well as those in retirement, living off of the pensions, Social Security and savings generated during their working years.

EPI’s mission is to inform people and empower them to seek solutions that will ensure broadly shared prosperity and opportunity. Consequently, EPI offers a steady stream of policy solutions that will steer the economy toward robust and widely shared growth. We believe it is not enough to describe the world and the challenges we face. Rather, it is critically important to point the way toward how we can make the economy work for us all. As EPI and others have established, the economy has not worked well for most people over the last three decades, even before the crushing pain of the current persistent, high unemployment and all of the associated ills. None of this happened by accident and the unacceptable outcomes we have experienced should not and need not be accepted. That is the context for our establishment of this new blog.

Working Economics will provide EPI an additional tool for communicating about the economy and economic policy. It will provide an effective mechanism for engaging in the issues that people are thinking about every day. The blog will help EPI analyze and respond to breaking economic news quicker than ever before. It will also allow us to surface many of the analyses which we regularly undertake but do not showcase in the public sphere. The blog provides a forum for EPI researchers to present EPI’s work in a conversational and engaging manner. We recognize that EPI’s biggest asset is our hard-earned reputation for doing solid empirical and policy analysis. Therefore, our blog posts will maintain the same high quality readers have come to expect from EPI.

Our ultimate goal is to make Working Economics a resource for those trying to understand the economy and for those trying to find ways to make the economy work for everyone. Reading Working Economics will give you insights into how the economy works and for whom it is working. We hope you’ll enjoy our entry into the blogosphere and read us regularly.

Thank you,

Lawrence Mishel
EPI President