Growth & Justice Blog

Westover is in the dark about our education project

In a column paired with Angela Eilers' op/ed piece, St. Paul Pioneer Press editorialist Craig Westover writes: "when think tanks use research the way a drunk uses a lamppost, for support rather than illumination, the public is ill served, misinformation becomes widely distributed, policymakers are misled and bad policy follows."

Westover himself careens around a single research lamppost, apparently without noticing it is only one point in a constellation of lights that can lead policymakers in many directions.

He criticizes how Minnesota 2020 distilled a few bullets from hundreds of pages of findings by researchers contributing to the "Smart Investments in Minnesota's Students" summit — and then proceeds to explain implications "that Growth & Justice and Minnesota 20/20 [sic] miss and policy-makers ought to consider."

In fact, the presentation of research findings earlier this month was only one step in a more than year-long process of engaging economists, educators, citizens and policymakers in evaluating the cost-effectiveness and inter-relationship of interventions that can improve educational attainment. There's still more work to be done — including seeking broad community response — before Growth & Justice makes any recommendations to policymakers.

We do not cherrypick research findings to support a political agenda. Instead, our approach is to identify an issue of strategic importance to the state and examine it comprehensively, taking into account the implications for the economy as a whole as well as for individual Minnesotans. Then we present the complex and sometimes ideology-challenging insights in a series of discussions with community leaders.

The policymakers we know on both sides of the aisle are hardly misled by this process.

Columnists, of course, are free to jump to conclusions.

— Charlie Quimby

Turning the "Dropout Deficit" into a "Graduation Gain"

In November, the fate of school levy proposals often came down to what voters believed about one question: Does more money equal better results?

Levy supporters would say districts needed more money to maintain or produce better outcomes. Opponents of increased funding responded that schools aren’t doing the job and more money hasn’t made them any better.

It’s understandable in a time of limited resources that some voters would oppose more public school spending. But most would probably also be appalled at what school failures cost Minnesota in human and economic terms.

Assessing the costs

Currently, about 10,000 students a year do not graduate from high school on time. There's a wide achievement gap between white students and students of color. By 2020 few in Minnesota will be making a living wage with less than a one-, two- or four-year post-secondary degree. For those who fail to go on to college, it means greater stress on families, inability to afford health care and more demand for government services.

Over the lifetime of every new class of non-grads, this "Dropout Deficit" will cost the Minnesota economy $10.6 billion in reduced wages and taxes, plus increased costs for social and corrections programs.

Without improvement, that's a nearly $140-billion drag dropped on the state economy between now and 2020.

On the positive side, Minnesota taxpayers enjoy a "Graduation Gain" equivalent to more than a quarter million dollars over the lifetime of each person who graduates — through increased tax revenues and lower expenditures for health, crime and welfare. The individual graduate will enjoy almost half a million dollars in increased earnings potential.

Meanwhile, Minnesota’s population growth is lagging. If our education system can’t supply the productive workforce that’s been the foundation of our competitiveness and economic growth, the whole state’s prosperity is at risk.

Getting better returns on the education dollar

That brings us back to resources. Taxpayers want schools to produce results. It’s not politically acceptable to simply spend more money — or to spend it differently — without knowing the impact. But getting reliable answers about educational payback is complex. It involves bringing together educators to evaluate effectiveness; economists to analyze costs; and employers, parents and policymakers to judge value.

At our recent “Smart Investments in Minnesota’s Students” summit, we heard a number of findings to inform a policy discussion about cost-effective investment.

We know from a growing body of evidence that early childhood programs help kids make great academic progress, with high rates of return on the investment. And, as G&J policy director Angie Eilers points out in this op/ed piece, early childhood programs are especially attractive to those who favor market solutions, since parents can choose from a variety of options. But research also tells us that investment in early learning alone is not enough.

Key Gates on the Education Pathway 

Other important gates along the education pathway also deserve attention. What types of interventions at these other key gates will be most cost-effective in keeping kids on track and moving them toward graduation?

You can download a summary of the conference reports here.

I'm no education authority and am not familiar with most of the programs cited by the experts, so I'll just mention a couple general findings.

Evaluating payback

We often hear the claim we should pay teachers better. Sure enough, analysis  showed that paying more for quality teachers resulted in a 4/1 payback in terms of more graduates produced.

Reduced class sizes is another popular solution. Making classes smaller for all students delivered a nearly 2/1 payback, while payback on reducing class sizes for students who have greater academic challenges was better than 3/1. Other programs demonstrated even higher rates of return.

Targeting funds to certain groups may be far more cost-effective than spending a little on every student. But that can be controversial in a climate where taxpayers view their tax dollars like an individual investment account they should be able to direct for their greatest personal benefit.

For example, we know teens who avoid substance abuse, pregnancy and involvement in the juvenile justice system are more likely to graduate. Relatively low-cost after-school programs aimed at all youth may make parents feel better, but they don’t appear to be a good investment in terms of improving graduation rates. However, some more expensive out-of-school programs focusing on at-risk youth do show good results.

We know education drives individual and community prosperity. We know our state will decline unless we educate all our kids, so that more of them achieve some level of post-secondary degree. And we know that, without adequate budgets, policymakers still face tough choices that amount to picking winners and losers.

Instead of slugging it out in battles over spending and ideology, perhaps some divided communities can start a different conversation, drawing on our ongoing Smart Investments work.

— Charlie Quimby

Listen to Dr. Stinson on underperformance and investment

Our State Economist is one of Minnesota's most respected government officials. Dr. Tom Stinson's bedside manner — a steady voice and straightforward diagnoses of our economic state of health — has provided continuity and a rational  perspective in his 20 years on the job under Republican, DFL and Independence Party governors. Although Stinson lacks the powers at the state level of a Federal Reserve Board chairman, his commentary tends to be accepted with the same kind of respect and between-the-lines speculation that has been afforded to Alan Greenspan and other fed chairs.

So citizens who care about the state's economy should pay close heed to Stinson's Q&A-style interview by Britt Robson on MinnPost today. The topic: Minnesota's economy in the last few years, for the first time in decades, has been chronically underperforming the national average. It's also timely because everybody in Minnesota's policy world is trying to guess what the numbers will be in the annual state budget forecast, scheduled for Nov. 30, at which Stinson always presides.

Some of the language he uses in this interview is very close to our own framework here at Growth & Justice. Most significant, Stinson suggests that our historic investment in public education and human capital was THE crucial ingredient in  our success. Stinson does not say, as we do, that the anti-tax, government-cutting policies of  recent years are wrong-headed. And he suggests that the recent underachievement might be due in part to Minnesota's relatively small defense industry in a wartime economy.

But here's what he had to say about the reasons for Minnesota's success, until recently, and the choices  in front of us. Notice that the options he lays out all have something to do with the idea of investment and there is not a hint, at least in this interview, of further cutting taxes or downsizing government.

Minnesota's economic record over the last half-century is one most states envy. The reason that occurred was because far-sighted public and private sector leaders figured out they were going to invest in the education of the baby boom generation...

We have got to be focused on the productivity out of our workforce. Because that is really the only way we get growth in incomes and it is what makes Minnesota attractive to managers of firms looking to locate here. The question is, how do we best achieve that productivity? Do we get it by investing in fancy new, faster machines? Do we get it by investing in education and health care for our workforce? Do we get it by investing in infrastructure? Do we get it by investing in more research and development?

Whether we make those decisions by making explicit changes in what we are doing, or implicitly by leaving things as they are, those decisions are going to have a major impact on our future economic output. Everybody has their own opinion as to what is important and what the balance should be. But there needs to be a public discussion, not on the question of taxes versus government spending, but rather on how we distribute the resources we have in a way that best enhances the future as well as the present.

Stinson reviews our past success, noting the steady climb in general prosperity and income per capita, from average rankings in the 1960s to a peak ranking of about 6th in per capita income in 2003, and a rather sharp fall to 14th since then.

Growth & Justice notes that this steady ascent occurred during a time when Minnesota's ranking on taxes and spending also was lodged permanently in the top 10, despite arguments all those years that our larger public sector was somehow anti-business.

The anti-tax forces finally prevailed and had their way. Some of the largest permanent income tax rate cuts in our history occurred in 2000 and 2001, followed by a deep recession and some of the largest state government budget cuts in our history in 2003.   

We submit that our experiment with "no new (state) taxes'' and a diminished  public sector is simply not working. We need to invest more in public things for the common good, in the smartest, most cost-effective ways we can find, to restore a broadly shared prosperity. (See our website's main page for our Smart Investments in Minnesota's Students initiative.)

Finally, for those wondering whether the Nov. 30 budget forecast will be in black or red ink, note that Stinson toward the end of this interview uses the "R" word. Our sources at the capitol say the betting is running heavily toward  a projected deficit and an assumption of recession, even though the forecast regrettably will not provide for inflationary growth in state budgets.

— Dane Smith

Funding Pre-K: When 36th place is close to 50th.

A Star Tribune editorial about findings presented at our education summit focused — as did much of the media coverage — on early childhood programs as a worthy investment. Though it's critical to keep kids from running off the education pathway later, there's a compelling case for getting kids ready to succeed in school from the start. And Minnesota does not invest much in school readiness programs.

A key priority is improving support for kids from birth to age 5. Only 1.9 percent of Minnesota 4-year-olds had access to prekindergarten classes in 2005, placing the state 36th in the nation on that measure. During the same year, Minnesota spent an average of slightly more than $283 per child for school readiness and $270 per child for Early Childhood and Family Education (ECFE) programs. Those expenditures don't measure up to Wisconsin, Michigan and Illinois -- all states that spend an average of $2,980 or more per child for prekindergarten programs.

That's from the research by the U of M's Arthur J. Reynolds. Minnesota ranks even worse than it appears, because the editorial chose the year for which funding data was available. Reynolds also reported Minnesota's percentage of participation dropped in 2006, putting us in 37th place — out of the 38 states that fund any such programs.

Being in 37th place sounds bad enough. But in fact, we're a whisker from being last.

— Charlie Quimby

 

A Very Good Day for Growth & Justice

Just got an e-mail, one of dozens of repsonses along this same line, congratulating us for a "fantastic conference...Growth & Justice continues to exceed all expectations for quality work.''   Another typical response, this one from someone who was NOT at our education summit on Monday but only heard about it:  "It's a great idea to bring together legislators with academics.''

Star Tribune education reporter Jim Walsh, in a metro section news story (here) about our Smart Investments in Minnesota's Students summit conference, caught its distinctiveness this way:

"Monday's forum was notable in that it included legislative leaders from both parties'' and Walsh went on to note that  "cost-benefit data presented Monday can help the Legislature make good choices on education.''  Senate Minority Leader David Senjem, R-Rochester, was quoted as saying, "We as leaders...need to pick up that torch.''

We knew going in to the History Center on Monday morning that we had a first-rate product to deliver.   But all the staff and several board members present were taken aback by the turnout (more than 250, most of whom stayed all day and participated vigorously in break-out sessions), the quality and depth in the power-point presentations by our commissioned scholars, the strong attendance by dozens of legislators and their staff (many of whom were on an official state holiday) and the genuine outpouring of positive feedback.   The general theme is that we were providing honest, meaningful, useful facts to help shape a crucial debate over how to best invest in the future of Minnesota.   

This was a team effort and I'm very proud of the energy and initiative of every single member of this staff in putting on a nearly flawless demonstration of what Growth & Justice is all about.  But we have to single out Policy & Research Director Angie Eilers, for her tireless and intelligent leadership on this initiative, our top-notch steering committee and board of advisers,  and the direction given to this project more than a year ago by our board of directors and its chairman, Joel Kramer.  And and last but by no means last we owe thanks to our generous and far-sighted foundation supporters (The Saint Paul Foundation, the F.R. Bigelow Foundation, the Blandin Foundation, the Travelers Foundation, Cargill Foundation, ADC Foundation, and the Willis C. Helm Fund of The Minneapolis Foundation).

Dane Smith

Some government business incentives are intangible

A reader asked me what I thought of the Star Tribune's editorial, "What's slowing down the state economy?" 

The Strib enumerated several expert opinions on potential causes for the state's rising unemployment rate. The national housing slump; slower population growth; it's merely cyclical. It also questioned how much influence government has in the matter, but said state economic development policy and tax policies of Gov. Pawlenty clearly hadn't made a difference.

Since the state's best economists are puzzled by this, I won't presume to answer as an economist. My perspective is largely as someone who came to Minnesota for an education, stayed for the culture, worked for a global corporation, grew a business and raised a family.

The Minnesota I found had a proud history of innovation — in retailing, flour milling, progressive politics, computers, medical treatment and cultural institutions, to name a few examples.

Innovation drives job creation more than anything else, and innovation is a difficult animal to grow in captivity. It comes from a combination of talent, dissatisfaction and optimism. While money certainly helps once innovation has a start, it very rarely drives the people who create new jobs through their innovative effort.

Over the last decade, Minnesota has begun to starve its talent and lose some of its optimism. The no-new-taxes attitude doesn't just affect government services and hamstring education. It sets a tone in the culture that is anti-knowledge, anti-creativity and anti-risk.

It says, focus on the basics, look to the past, and take care of yourself first. Those aren't necessarily bad things, unless they make up an entire world view that determines how a society will deal with a very dynamic present and uncertain future.

My reader's comments express some of this notion:

I of course have an opinion. I think that all of the state government spending cuts severely hampered the state's economic growth. People working for  the state were laid off, and many, many projects were curtailed. I think it spiraled. The state disinvested in its citizens by cutting  positions and outlays for projects which would have employed many others. In addition the Governor kept a message of "we need to cut back" going, which is psychologically stifling.

The direct impact of government cutbacks may have been modest. Government policy probably has only moderate influence on economic growth through direct economic development, jobs programs and business incentives — and more indirectly through investment in research, education and infrastructure.

But in setting the terms for the discussion about how we prepare for the future, it has a great deal of power the economists won't find in their numbers.

— Charlie Quimby