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To End the Jobs Recession, Invest an Extra $20 Billion in Public Education

Research & Commentary
August 22, 2012

by Salvatore Babones

The late-2000s economic recession officially ended in 2009 when a barrage of federal stimulus spending overwhelmed the slowing economy and pushed it back into growth. Over the past three years, the economy has grown at an average rate of 2.2 percent per year. The economic recession is economic history.

But the jobs recession is reality. The US economy may have gained 2.7 million jobs over the past three years, but it still employs 4.8 million fewer people than it used to.

Many of those lost jobs were in public education. Education employment fell by 306,000 in the three school years following the end of the recession in June 2009. It’s set to fall even further this year.

If the economy is expanding and job creation is our top priority, why are local school districts laying people off? Governments at all levels are cutting back their investments in public education.

The problem isn’t a lack of money. The problem is where the money is going.

[pullquote]The problem isn’t a lack of money. The problem is where the money is going.[/pullquote]

For example, Congress is busy ring-fencing the military budget from planned cuts this school year, as Truthout’s Dina Rasor reported. One argument for maintaining our historically high levels of military spending is that defense cuts would result in job losses.

Yet research consistently shows that education spending creates more jobs per dollar than any other kind of government spending. A University of Massachusetts studyranked military spending worst of five major fiscal levers for job creation.

The UMass study ranked education spending the best. A dollar spent on education creates more than twice as many jobs than a dollar spent on defense. Education spending also outperforms health care, clean energy and tax cuts as a mechanism for job creation.

Study authors Robert Pollin and Heidi Garrett-Peltier estimated that each $1 billion in education spending creates 15,300 direct jobs. When indirect supply-chain jobs and spending multipliers are taken into account, $1 billion in education spending supports 26,700 total jobs.

One military spending program Congress has maintained in the interest of preserving jobs is the M1 tank, despite the fact that the Army reportedly doesn’t want any more of the tanks and has over half its existing stockpile mothballed in the Nevada desert.

Given the $8 million price of a single M-1 tank, Congress could create 122 direct education jobs per tank, or 213 total jobs including multiplier effects.

Congress has ordered 42 tanks for next year that the Army doesn’t want, according to Defense News. That’s nearly 9,000 potential education jobs wasted on tanks destined for the Army’s desert depot.

The Lima, Ohio, tank plant where the tanks are made employs just 920 people, according to Reuters. And next year’s Army order will account for less than half of the plant’s output.

[pullquote]Congress could put 300,000 people back to work this month if it acted immediately to provide direct support for local school districts.[/pullquote]

Even the local Lima, Shawnee Township Ohio public schools employ more people (949 on a full-time equivalent basis) than the M-1 tank factory. They maintain these 949 jobs on an annual budget of $73 million. That’s just over 9 tanks to fund the entire public school system.

And the Lima, Shawnee public schools don’t just build tanks to mothball in the desert. They educate over 6,700 children a year. Schools are an investment; tanks are an expense.

Congress could put 300,000 people back to work this month if it acted immediately to provide direct support for local school districts. For $20 billion – a drop in the $3.6 trillion dollar federal budget – Congress could immediately restore all 306,000 education jobs lost since the beginning of the recession.

This investment in public education would also create a further 200,000 jobs through supply-chain and multiplier effects, for a total of over half a million jobs.

These jobs are better than shovel-ready. Everything needed to productively employ these people is already in place: the administrative systems, the facilities, the books, the students, everything. We could have teachers in classrooms next month.

The legislative action campaign of the American Federation of Teachers and the education funding program of the National Education Association are both pushing for more funding for public education

A half-million jobs won’t end the jobs recession, but they would make a huge difference. For a $20 billion investment, public education is the closest thing going to a sure bet.

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