Tuesday, June 09, 2009

The Equity Project

A recent post of mine over on the Blog at Mises.org:









The Equity Project

Jim Fedako



The Equity Project is a new public charter school that has adopted a unique pay scale - the school will pay all teachers a base salary of $125,000 per year. On top of that, teachers can earn up to a $25,000 bonus their first year, plus they qualify for a comprehensive benefits package. In return, teachers agree to take on more hours, certain administrative responsibilities, and classes of 30 students.

While TEP is an interesting experiment, the results will be wanting of any real meaning.

First off, since state and federal dollars fund the school, it is free to the families of the students. Application to the school does not reflect the preferences of parents ranked against alternate choices. The only knowledge one can ascertained is that parents applying to this school desire it more than they desire their local, failing public school.

Then there is the question of performance. Without a profit line, how will we know if the school is successful? Government and the media will judge the school's performance based solely on student scores on government-mandated tests -- not on dollar votes cast by parents.

Finally, there is the use of scarce resources. The school hired a phys-ed teacher who was once the personal trainer of Kobe Bryant (not knowing any more information, I assume the teacher was a trainer in high demand). Other teachers have similar pedigrees (again, I cannot speak to the market value of these folks). For the sake of argument, and accepting the premise that the school only hires the best that $125,000 can buy, I will assume that all of the teachers are highly qualified and in-demand.

Bryant makes like a bazillion dollars because of his skill and fitness on the basketball court. Basketball - like all professional sports - is a sport where the differences (in absolute terms) between the most valuable player and a bench warmer are miniscule. Especially when viewed against the spectrum of everyone who plays basketball. Therefore, anyone who has the knowledge to increase Bryant's performance by (say) even 1% is worth real money.

Who would bid against the market for such a personal trainer, only to have him work in a fifth-grade gym class? If this was a private school, then the answer is someone who wants to satisfy the preferences of certain parents. As this is a government-funded school, the answer is someone who adheres to the Trotskyite belief in the new soviet man.

Putting someone so qualified in a gym class in not an efficient use of scarce resources - it is similar to suggesting that Mises should have spent his years teaching fifth grade social studies instead of writing Human Action, etc.

In the end, since this school is not subject to the market, we will learn nothing from this latest grand experiment in government schools.

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