Wanted In California: Education Reforms And Better Schools

Monday, November 5, 2018
Hoover Institution, Stanford University
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What can California schools do to improve their national rankings?

Rewarding teachers based on performance and not seniority would be a big first step toward educational progress in California, a Hoover scholar says.

Lee Ohanian, an economist at the Hoover Institution studying economic growth and the impact of public policy on the economy, says California’s seniority-based teacher compensation is a relic of union contracts from the 1950s.

With California’s schools ranked among the worst in the country and even world, students here would be better off in an educational system that featured merit-based teacher compensation and more taxpayer-demanded accountability of schools.

Ohanian was recently interviewed on the subject:

What reforms in California’s teacher compensation practices would lead to a better performing K­–12 education system? 

Ohanian: There are very simple and sensible changes in teacher compensation policy that would have an enormous positive impact on California's K–12 learning outcomes and that would also align human resource practices in the education sector more closely with the rest of our economy. Currently, salaries are determined in most California school districts by seniority and not by teaching performance. This practice is very problematic because it doesn’t allow us to pay the best teachers what they are worth, and because seniority is not highly correlated with teacher effectiveness. In particular, teachers with roughly five years of experience are, on average, just as effective as teachers who have twenty or more years of experience. Studies show that introducing merit-based pay, rather than seniority-based pay, leads to higher student learning outcomes and higher teacher salaries. 

Seniority-based compensation is a relic of union contracts from the 1950s, in which all individual worker attributes were ignored in determining compensation. It is very hard to implement merit-based teacher compensation today because teachers’ unions do everything they can to block this reform, despite the fact that most teachers would benefit from tying performance to compensation. So why do unions fight this reform? Simply because maintaining union control is much easier for union leaders when union members are treated uniformly. Unions tend to unravel once union members are treated like individuals. The current compensation policy essentially benefits no one other than union executives and very poorly performing teachers. 

How does California rank on US educational statistics?

Ohanian: Not very well. At one time, California had the best schools in the country, and the United States had the best schools in the world. Sadly, this is no longer true. US schools have slipped substantially in international education comparisons, and California schools are among the worst. There are various rankings, all of which place California between forty-second to forty-sixth in the country. This is simply unacceptable.

Current learning outcomes are so bad that they are tantamount to sending a baseball player up to bat with two strikes. Our kids just are not getting the training they deserve to be able to go out and succeed in an increasingly competitive marketplace. Educational investments are perhaps the most important investment that we can make, and we must do a much better job. 

What reasons do teachers’ unions give for these rankings?

Ohanian: Most research shows that teachers’ union rules regarding compensation, teacher tenure, and layoff policies are important determinants of poor educational outcomes. Not surprisingly, teachers’ unions do not acknowledge that union rules are impeding learning outcomes. Instead, they argue that school budgets are too small.

In terms of spending more on education, the evidence shows that simply spending more does not lead to better learning outcomes. Hoover Fellow Rick Hanushek shows that there is in fact a slight negative relationship between learning outcomes and spending across the fifty states.

Moreover, California school spending has risen enormously in the last six years, but student achievement has not increased. This indicates that higher spending, in the absence of other reforms, will not raise student achievement. 

California schooling is so poor in some districts that several school children from the Los Angeles Unified School District brought a lawsuit against the state a few years ago, Vergara v. State of California, arguing that their education was so bad that it violated the state constitution’s equal protection clause. The trial judge’s ruling stated that the impact of the most poorly performing teachers “shocks the conscience.” The school children prevailed in the original lawsuit.

Unfortunately, Governor Jerry Brown and the state attorney general at that time, Kamala Harris, sided with the teachers’ unions on this issue, and the trial verdict was reversed by an appellate court. Interestingly, the appellate court did not take issue in any way with the substance that many children were receiving poor education, but rather narrowly ruled that the lawsuit did not involve the equal protection clause of the Constitution.

Even though the Vergara lawsuit verdict was turned down on appeal, I had hoped that the evidence presented in the case would lead California teachers’ unions to pursue meaningful reforms. The California Teacher Association recently adopted a new strategic plan that you can read and decide for yourself if there are any concrete suggestions for reforms that will improve learning outcomes. I certainly don't see any. 

Are high-performing individuals are entering the teaching profession today? Why or why not?

Ohanian: There are far fewer highly performing individuals entering teaching today, and this really goes back to the issue of a lack of merit-based pay. The best teachers are incredibly valuable. A number of researchers have concluded that a top-performing teacher in an average-sized classroom raises future student earnings by more than $250,000.

But we do not compensate these extraordinary teachers for this productivity, and this is the reason why fewer high-performing individuals are entering teaching. Research is also showing that those entering teaching today are particularly attracted by the job security that teacher tenure offers, rather than by the possibility of career growth and satisfaction. We need more high-performing teachers and fewer who primarily care about job security. 

Any other issues in California education that taxpayers should be concerned about?

Ohanian: Unacceptable learning outcomes will continue until taxpayers become informed and demand accountability from our K–12 education system. The cost of living in California is the second-highest in the country. Our children are not being prepared to be able to afford to live in this state when they are adults, much less prosper. In addition, we should be concerned about school curricula. Courses such as Western civilization, history, and economics would benefit our children enormously, but these courses are no longer routinely taught in our schools. Consequently, young people do not understand the benefits of a free market nor the costs of socialism.

Surveys show that half of the “millenial” demographic prefers socialism to a market economy. The book, The Road to Serfdom by Friedrich Hayek—a wonderful treatise on why markets and freedom go hand in hand and how socialism is inconsistent with freedom—should be required reading for all high school students. Hungry Ghosts by Jasper Becker, detailing how 30 million Chinese died under the disastrous mistakes of Mao’s socialist economy in the late 1950s and 1960s, is another. 

The Hoover Institution’s Eric Hanushek recently wrote a chapter on education reforms in a Hoover white paper on economics policies in California.


Clifton B. Parker, Hoover Institution: 650-498-5204, cbparker [at] stanford.edu