Education Labor Costs – Take Notice

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Mike Antonucci takes an eye-opening look at labor costs in education and why  you should pay attention to them in laschoolreport.com.

Any debate about public education finances invariably devolves to whether we are spending enough “in the classroom” and how much “administrative bloat” there is. Textbooks, maintenance, facilities, curriculum and student programs all come under scrutiny, either to find savings or to fight for additional funding.

Budget categories can be deceiving. Are school principals included in administrative expenditures? Is spending on custodial services really an outside-the-classroom cost? Are we mingling current spending with long-term obligations, such as bond debt?

Despite these complications, public school expenditures are easier to understand than those of private industry. More than 80 cents of every dollar spent on public education in the United States goes either into employees’ wallets or to benefits on their behalf. That ratio has remained relatively steady for decades, through recessions and economic booms.

Each year, the Census Bureau releases a report detailing all public school expenditures, called the Annual Survey of School System Finances. The statistics are so comprehensive that they take two years to compile and publish, so the edition released last week is for fiscal year 2017.

The United States spent $610 billion on K-12 public education and an additional $84 billion of debt and capital outlay, for a total of $694 billion. California spent $76.5 billion and had $70.5 billion in outstanding debt. Los Angeles Unified spent $8.7 billion and had $10.5 billion in outstanding debt.

On average, the U.S. spent $7,053 per pupil on employee salaries and $2,972 on benefits, for a total of $10,025 in compensation. That amounts to 82.2 percent of every dollar spent.

Californians spent $6,947 per pupil on salaries and $3,131 on benefits, for a total of $10,078. That’s 83 percent of all state education spending.

Los Angeles spent $7,261 on salaries and $3,740 on benefits, for a total of $11,001. That’s 81.2 percent of all the district’s spending.

These numbers do not account for cost-of-living differences from region to region, which are certainly a factor in how much is spent in which parts of the country. But there is a flip side that is often overlooked in those computations.

When such vast amounts of money are spent, they contribute to a region’s tax burden, which leads to price increases from the private entities that must pay those taxes and wage demands from the citizens who now must pay increased prices. Most cost-of-living indexes don’t include the costs of government, but they certainly are a major factor in assessing how much revenue a given area can produce.

So while we can argue until we are blue in the face about how much we should spend and where we should spend it, the lion’s share will always go to hire more employees, pay more compensation to the employees we already have, or both.

Makes you want to pay more attention to labor issues, doesn’t it?