Saturday, June 2, 2012

The Five Crucibles and Public Education Funding in Pennsylvania

Juxtapose The McKinsey & Company report on the Five Crucibles of Innovation against the condition of public education in Pennsylvania. What you get is a distressing picture of an unfortunate public-policy strategy.

As the McKinsey consultants state, “Although the demand for knowledge workers is sure to grow, the supply will not. Governments are not moving fast enough to educate workers with the skills needed to meet the productivity imperative, and businesses can’t afford to wait.”

This is a particularly acute problem in the United States, which must rely on productivity gains rather than high birth rates to fuel economic growth.

So you would think that state governments in the U.S. would be doing their utmost to strengthen education and churn out more and smarter knowledge workers.

Welcome to Pennsylvania, where the state is doing the exact opposite.

In 2011-12, the state slashed over $1 billion in K-12 funding, a cut of about 15 percent. Class sizes increased, some programs and classes were eliminated, and teachers were laid off in school districts across the commonwealth.

Governor Corbett’s proposed 2012-13 budget cuts another $100 million from K-12 education.

Higher education has also been hit hard, perhaps even harder.

One year after he cut higher-education funding by almost 20 percent, Gov. Corbett proposes to slash another 30 percent this year, or $1.4 billion.

Pitt, for instance, would lose $41 million in state funding this year.

This is particularly disappointing in light of another trend highlighted in the McKinsey report, namely the growing demand for energy resources.

Much of Pennsylvania is sitting on top of a massive deposit of natural gas in the Marcellus Shale, presenting the state with a tremendous revenue opportunity for the next two decades or more. However, when the state finally got around to imposing a tax on natural gas, it set the rate so low that the state continues to struggle to balance its budget.

These cuts in education funding are not a fiscal imperative. Rather, they reflect a misguided strategy and misguided priorities.

Gov. Corbett will never say this publicly, but privately, it appears he is trying to erode the quality of public education to accomplish two objectives:

1.    To weaken the state public teachers’ union.

2.    To strengthen the competitive position of Catholic schools, which have experienced declining enrollment.

Unfortunately, he’s also eroding the Pennsylvania’s competitive position in the global economy.

All this ties into the fifth of the McKinsey report’s Five Crucibles, the market state.

The McKinsey authors note that income inequality is rising, in large part because of the higher Gini coefficient associated with the service sector.

Cutting funds for public education will only exacerbate this problem, as the cuts will disproportionately affect lower-income students, who are more dependent on public education.

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