The Cover Story of the Apr. 17 Business Week supplied the topic for the Apr. 9 conference on America Online. The guests were two of the story's authors, Economics Editor Michael J. Mandel and Chicago Bureau Manager Richard A. Melcher.
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OnlineHost: Good evening and welcome! Tonight Business Week Online presents, in its regular weekly conference, a discussion of the provocative Cover Story in the Apr. 17 issue, Will Schools Ever Get Better? There's still hope, according to two BW editors who were authors of the story, Economics Editor Michael J. Mandel and Chicago Bureau Manager Richard A. Melcher.
They're here to answer your questions. Mike Mandel (MandelBW) has been with BW since 1989. A Harvard PhD in economics, he was previously on the faculty of New York University's Stern School of Business. He has written noteworthy BW cover stories on such topics as the economics of crime and how government statistics are misleading us about the economy.
Rick Melcher (RMelch) joined BW in Chicago in 1978. Before returning to Chicago in 1993 as chief of the bureau there, he headed BW's London bureau. For this story, he reported on how Milwaukee has reinvented its schools. Tonight's moderator is Jack Dierdorff (JackBW), consulting editor of BW Online.
JackBW: Good evening to all of you on AOL, and to you, Mike and Rick. The first question echoes the BW cover: Will schools ever get better? Mike, can you answer that briefly?
MandelBW: Good evening. As most of you know, the country's schools are in a sad state. They're filled with violence--many of them. And despite pouring in billions of dollars, achievement is still stagnating. What's more, enrollments are zooming up, and budgets are getting increasingly tight. So the only way that the schools can get better is to take their cue from the private sector.
That means boosting productivity and quality without raising costs. Can they do it? The schools are pretty hidebound right now. So what they need is better information about where they are spending their money. They need more competition, to keep them on their toes. And they need to focus on putting their vast financial and teaching resources where they will do the most good.
We have a ton of examples in the story about how some schools are remaking themselves. I just want to focus on one now, and then I'll toss it over to Rick. Most school districts simply cannot answer the obvious question: How much money is actually getting to the classrooms? That's what parents and taxpayers really want to know. So really the first step is letting a little sunlight in, and getting the schools to simply keep better track of where their money is going. Then we have a hope of seeing which schools are using their money well, and which ones aren't. Rick, do you want to add to that?
JackBW: Rick, you explored what Milwaukee is doing. Do they have a solution?
Rmelch: Good evening. To add to what Mike noted, I'd say that dozens of cities all over the country are getting better, albeit slowly. What it takes, and this is what our example of Milwaukee illustrated, is the cooperation of groups normally at each other's throats--unions, principals, companies, and bureaucrats. The other point that Milwaukee makes is not to go in search of a single solution.
JackBW: Hap2530671 sent us a question ahead of time. Here it is. Mike?
Question: Are computers part of the solution? What effect will they have as teaching tools, and will they improve productivity?
MandelBW: That's a good question. The private sector went through about 10 years where they invested billions in computers before getting a payoff. The same thing is going to happen in the schools. They are going to have to invest billions, it's going to be costly, and eventually it will pay off--though perhaps not in the next five years.
JackBW: It's said that too little school money gets to classrooms.
Question: Where is the education money going instead of into the classroom?
MandelBW: It's going into administration. It's going into operations, such as transportation and food. It's going into a lot of extra layers of bureaucracy. Some schools do much better than others in getting money to the classroom. We have to emulate them.
JackBW: Mike, you cite the example of business methods.
Question: Should we just turn education over to the private sector?
MandelBW: I don't think so. The schools serve an essential function in making people part of society and transmitting values. I don't think we want to turn this over to the private sector.
JackBW: Rick wants to add.
Rmelch: Privatization, like other would-be reforms, may be a useful device to try, but its early efforts are decidedly mixed in cities such as Baltimore. When we think of privatization, we shouldn't just think of turning over teaching to private firms. There may be benefits in turning over such functions as accounting or building maintenance, which can be big-ticket items.
MandelBW: We can get many of the benefits of privatization in other ways. For example, we want competition to the current setup. One way is to allow parents, teachers, and other groups to set up charter schools. Which are funded by the state, but separate from the traditional bureaucracy.
JackBW: KUNSANCIT has a question that may relate more to society than to schools per se.
Question: I would like to know why there are so many kids with guns in school?
MandelBW: The latest polls show that the single biggest fear of parents is violence in the schools. I think that objectively, the problem is not as bad as people think. But it's still very real. We need to asssure every parent that their kids will be safe in schools. That's a priority.
Rmelch: One way to try to combat the guns issue may be to help with another major problem:«MDNM» how to involve parents in their kids' schools. There are legions of studies pointing to a correlation between school performance and learning activity in the homes. Schools that reach out to parents may also be those that end up with the fewest incidents of guns.
JackBW: Try this one next, BW Cover Story team, from JAdelNJ.
Question: Do you think charter schools--with their reduced levels of bureaucracy and more flexible union rules--are a model for how all public schools should operate?
MandelBW: Charter schools are one good model. But if there's one thing our reporting has shown us, there's not a "one-size-fits-all" solution. You want charter schools and other alternatives to exist in order to push the public schools to do better. But there may be many other models that work well in other situations.
Rmelch: Yes, I agree with Mike: There's no magic bullet, charter schools or otherwise. Yes, some of the objectives of charters--chiefly more flexibility from bureaucracy and rigid union work rules--are admirable. But charters have been plagued with their own, separate problems.
JackBW: NJBobF is the next questioner.
Question: On what basis do school administrators command such high salaries? Frankly, I don't see any business sense, education sense, or any other measure of value added coming from these people. How can they be held accountable for their actions/inactions and be paid on a performance basis. Any examples of performance-basis salaries?
MandelBW: Sure, there are. But what measures of performance are we using? Graduation rates, test scores, enrollment? The private sector pays high salaries, in part, because it can measure performance by profits, and ability to compete. If we set things up so there is more competition, and more information, then schools will realize that they shouldn't be wasting their money on outlandish salaries, unless the person is really good.
See, I'm not interested in adding new layers of regulation to the schools--such as prohibitions on how much they can pay. I'd like to see an open marketplace for students, more information on how schools spend their money, and I'm willing to let the forces of competition work their magic.
Rmelch: Performance pay is gaining increasing scrutiny in a number of districts. But, from conversations with principals and teachers--perhaps the wrong sources--it would require a major cultural change. Right now, each group says that more money would not have any bearing on how or what they taught, which raises, as Mike suggests, the question of what to measure.
JackBW: Jilleeno follows up on the discussion of charter schools.
Question: Won't charter schools open up state funding of religious institutions and violate separation of church and state?
MandelBW: No. A lot of people raise the same fears that you do. The way that most charter laws are written now, the money has to go to nonsectarian groups, and the schools have to be public and open to all. «MDNM»Which is why charter schools have proven to be so popular.
Rmelch: Vouchers, on the other hand, may raise a question of church/state separation. Milwuakee is the only city in the country using vouchers to send kids from low-income families to private schools with state money. The governor of Wisconsin is now proposing to expand the program to include religious schools. The plan, to get around church/state objections, is to give the money to parents, not the schools. Still, vouchers are among the most hotly debated reforms.
MandelBW: This raises another question: Will competition destroy the public schools? We tread a fine line here, between enough competition to force the public schools into making changes, and too much competition, which can splinter the educational system. We want to see more experiments, to see where the line is.
JackBW: Arborvill wonders about the relevance of school size.
Question: Could it be that private schools work so well because they are small? Are public schools getting so large that average students' needs get lost?
MandelBW: There's some evidence that smaller schools are more efficient than larger schools--no "economies of scale" in economist lingo. But once again, it may depend on circumstances. Right now schools don't have an incentive to choose the right size. We need to give them one.
Rmelch: There are some questions these days about how much more effective private schools are anyway. But a number of studies indicate that, public or private, there is something advantageous to small school size, not just small class size.
JackBW: Take this question next.
Question: Which school reforms look most promising?
MandelBW: The interesting thing is that pretty much every reform works, given enough money and attention. So the question is: What can we afford, and what can we sustain? For example, there is good evidence that spending more money in the earlier grades can keep kids from falling behind. But many school systems don't allocate their money that way. They put more resources into high schools, including athletics, which are very important to many people. You have to set priorities.
JackBW: Rick wants to follow up.
Rmelch: Although complicated in the extreme, one goal that most reform advocates suggest works is turning as much budget and curriculum-setting power as possible over to the local schools themselves, a means of decentralizing power as much as possible to the real decision makers.
JackBW: Here's another for you.
Question: They've been talking about school reform for decades. Why hasn't it worked--and what are the grounds for optimism now?
MandelBW: That's a good question. Sometimes the prospect of being hanged focuses the mind wonderfully. The schools were able to skate by over the last 20 years. Enrollments were falling, so the schools had plenty of money. Now with enrollments soaring, and less money, schools have to focus on getting their act together. They can't simply throw money at problems any more. Is this pollyannish? Maybe, but it seems to be happening, even in New York City.
Rmelch: I'll add two quick thoughts. As Mike says, there's a sense that out of desperation, a number of key players in the education debate have finally come together and decided that root-and-branch reforms are worth pursuing. Second, as to why now, we could suggest that the prospect that employers can't find the workforce of today, much less the future, has concentrated minds.
JackBW: Rick, BobA poses this for you. And we're just about out of time.
Question: Can the Milwaukee model be replicated in other parts of the country?
Rmelch: Good question, and one that I've discussed with many in Milwaukee and elsewhere. One point, not too encouraging, that the school superintendent in Milwaukee makes is that it's difficult getting the best practices moving from one school to the next, much less the entire district or country. Yet there are some general approaches in the Milwaukee example--decentralizing power, reaching out to many powerful groups, and trying a little of everything that can and should be replicated.
JackBW: Thanks, Mike Mandel and Rick Melcher of Business Week.
MandelBW: Thanks, and good night.
Rmelch: Thank you, and good night.
JackBW: And thanks to the audience for good questions. Sorry we couldn't answer all.
OnlineHost: Thanks to Mike Mandel, Rick Melcher, and the Business Week team for this conference on improving the nation's schools. If you'd like to continue the discussion, we invite you to move to the BW Online Chat Room or to post your comments and questions on the BW Online Message Boards.
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Tune in Monday, Apr. 10, for a special conference with BW Chief Economist William Wolman updating where to invest in 1995 (9 pm ET, Coliseum) and Thursday, Apr. 13, for a discussion with a successful executive on how small business can make it big in export markets (8 pm ET, Globe). Plus every Sunday at 9 pm here in the Globe. Thanks again and good night!
Copyright 1995 McGraw-Hill, Inc. All rights reserved.
