Privatization: A Solution for School Inequities?
August 6, 2001
The least experienced teachers tend to teach in the schools with the highest concentrations of disadvantaged students.

Economically disadvantaged students suffer a number of financial inequities in public education. The school districts in which poor children live often have fewer tax dollars to spend on education than do districts in which middle-class children live. Poorer districts also tend to pay lower teacher salaries than richer districts and have difficulty attracting and retaining teachers. These inequities have recently been challenged in the courts, and states are finding ways to mitigate some of these imbalances.

But other inequities continue. One is the tendency for disadvantaged students to be served by the largest and most bureaucratized school systems. School systems serving more than 100,000 students have disproportionate numbers of poor and minority students. These same systems are plagued by the inefficiencies of public bureaucracy, meaning that not only disadvantaged students have less spent on their education than their more advantaged neighbors but that the money tends to be spent less efficiently.

Another inequity occurs within school systems. The least experienced teachers tend to teach in the schools with the highest concentrations of disadvantaged students. Most public school systems honor seniority when deciding which teachers to hire. Teachers prefer to teach in schools where student behavior is good, student turnover is low, and parental involvement is high. Thus, problem schools tend to have the most teaching vacancies, which are filled by inexperienced teachers. Because new teachers are paid less than veteran teachers, inequities in staffing bring inequities in funding: schools with disadvantaged students receive less of every district dollar than schools with advantaged students because teachers in schools serving poor kids cost less.

Privatization could go a long way toward correcting these inequities. First, if private school management firms contract with the largest and most bureaucratized school systems, disadvantaged students will benefit disproportionately from more efficient uses of their education dollars. Second, if private management firms work in the poorest areas and are paid for their services what the district spends per pupil, privatization will increase the funding available to disadvantaged students.

Evidence suggests that private firms are working as equalizers. Most of the private management firms now operating public schools have focused on charter schools, which in general serve disproportionately poor and minority populations in urban areas and by law receive per pupil funding equal to local district averages.

As for traditional public schools, only Edison Schools, among private firms, is doing substantial contracting with school districts. But this is changing. Fourteen firms submitted proposals to New York City in August 2000 to manage the lowest performing schools in the school system. Several companies have responded to requests for proposals from Kansas City, Missouri, to the state of Maryland for school management of large school systems and highly disadvantaged schools and students. Edison's 110 schools, for example, include contracts with Dallas, San Francisco, Minneapolis, Miami, and Wichita. The students in Edison schools are disproportionately needy: 65 percent are eligible for reduced price lunches; 55 percent are African American, and 17 percent are Hispanic or Latino. If Edison's experience is an indicator, privatization could be an important equalizer in public education.