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Minimum Wage Advocates Should Support School Choice

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Minimum Wage Advocates Should Support School Choice

January 27, 2015

During National School Choice Week groups from all over the country are showcasing the many benefits of school choice.  But the vast coalition of politicians and organized labor who are pushing for an increase in the federal hourly minimum wage from $7.25 to $10.10 or $15.00 are silent.  That’s a pity, because improved education is the most reliable route to higher wages.

On Wednesday, supporters of school choice, led by civil rights leader Howard Fuller, are marching on Montgomery, Alabama.  They know that access to good education is the civil rights issue of our time. On Monday, residents of the Sunshine State celebrated Florida’s educational choice programs in Jacksonville, with a crowd of over 2,000. In 2015, over 10,000 events will celebrate National School Choice Week, up from 150 events in 2011.

It is a national tragedy that children are consigned to failing schools without the possibility of a better education. On average, 80 percent of high school students graduate in 4 years.  In some urban areas, four-year high school graduation rates are only 50 percent. In contrast, the graduation rate for private schools averages between 96 percent and 98 percent, with 99 percent for Catholic schools.

Those young people who fail to graduate are falling through the cracks in society. If they cannot graduate, they likely do not have the skills for an employer to train them, much less pay them, whether it is an hourly wage of $7.25, $10.10, or $15.00.

University of Chicago professor Gary Becker, a Nobel laureate, was one of the first to focus on the earnings effects of education with the publication of Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education in 1964. 

An American Economic Review paper by Harvard University professors Raj Chetty and John Friedman and Columbia University professor John Rockoff found that young people stand to gain about $14,500 in discounted lifetime earnings from having a poor teacher replaced with one of average quality. Young people who receive a better education are also more likely to go to college.

A Brookings Institution-Harvard University study by Brookings fellow Matthew Chingos and Havard professor Paul Peterson concluded that vouchers encouraged African Americans to attend college. They found that “using a voucher to attend private school increased the overall college enrollment rate among African Americans by 24 percent.” 

Parents who wish to take their children out of poorly-performing schools should have the right to do so.  As in Louisiana, which has a robust school choice system, the tax dollars should be able to follow the children to a government-approved school of their choice.

Every other benefit conferred by the government allows some possibility of choice.  People on food stamps can go to whatever grocery store they prefer. They are not limited to their neighborhood store. Individuals on Medicaid can go to any doctor that accepts Medicaid patients.  Unfortunately, that number is declining, but patients are not required to go to the clinic or physician that is closest to their residence.

Although education is an investment in human capital, state and local governments often limit education choices to local schools. Being consigned to failing schools has disastrous effects on the potential for upward mobility.  But those politicians who bemoan inequality rarely focus on school choice as a means of erasing the income gap.  

Former Democratic New York State Senator and Secretary of State Hillary Clinton also opposes educational vouchers because she does not “think we can afford to siphon dollars away from our underfunded public schools.” The Clintons sent their daughter Chelsea to the private—and pricey—Sidwell Friends School in Washington, D.C. Mrs. Clinton supports a higher minimum wage and expanded government funding for higher education. 

Similarly, President Obama, a proponent of higher minimum wages, has repeatedly tried to end funding for D.C.’s Opportunity Scholarships. He must be aware of the value of better education, because his daughters also attend Sidwell Friends.

Opposition to school choice is driven by teachers’ unions, who do not want parents to be able to opt out of the low-performing schools.  Teachers’ unions, led by the National Education Association and American Federation of Teachers, gave $4.5 million to Democratic candidates in the 2014 midterm elections. 

However, despite teacher union opposition, it is immoral to sacrifice our children on the altar of political coercion. Because of advances in technology and a shift to a service economy, upward economic mobility is now more strongly tied to the quality of Americans' education than at any time in history. While there have been large increases in spending for public education (an inflation-adjusted 239 percent over the last 50 years), many segments of American society still have low academic achievement and fail to graduate high school. 

The key to economic mobility is to improve students' academic performance, both in elementary and secondary school, so that they can embark upon and complete rigorous high-return college programs, or vocationally-oriented community college credentials.

In contrast, raising the minimum wage deprives low-achieving individuals of jobs, preventing them from getting that first position which would be the initial step on the career ladder.

This School Choice Week, politicians should look at themselves in the mirror.  If they favor raising the minimum wage, they should adamantly support school choice—the most effective policy to raise earnings and combat inequality.


Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, directs Economics21 at the Manhattan Institute. You can follow her on Twitter here.

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