Originally published in The American Prospect on September 28, 2016.
The Census Bureau released new data earlier this month that showed the median household income in 2015 was $56,500, up 5.2 percent over 2014. This marked the largest single-year increase since at least 1967, the federal agency reported. Moreover, this income growth was concentrated among the poor and the middle class, and 2.7 million fewer Americans were living in poverty in 2015 than a year prior.
Despite these encouraging trends, they come nowhere close to reversing the dramatic rise in inequality we’ve seen since the late 1970s. As the Economic Policy Institute reported in June, in 2013, the top 1 percent of American families gained 25 times as much income during that time as the bottom 99 percent. And as The New York Times recently noted, the median household still earns 1.6 percent less in inflation-adjusted dollars now than it did prior to the housing market collapse.
With that in mind, a new report released today by In the Public Interest, a research and policy organization, makes the case that the increased privatization of public goods and services over the last few decades has contributed to, and exacerbated, the stark inequalities we see today. The report sifts through various sectors that have grown increasingly privatized—from foster care and transportation, to public schools and prisons—outlining commonalities between them, and recommending ways to undo some of the harms of private contracting.
One area the report focused on is charter schools, which are publicly funded but privately managed. While income inequality is a concern for these schools—charter teachers are generally non-union, work more hours, and earn less money on average than their traditional public school counterparts, In the Public Interest also delves into concerns of oversight and segregation, issues common among increasingly privatized sectors.
The heated debate over whether charters are “public” or “private” tends to grow quite muddied, particularly as most charter schools are structured as nonprofits. Charter supporters point out that these schools are open to all students, funded by taxpayers, and free to attend—ergo, public. Critics say that charters are happy to take advantage of public laws and benefits when it suits them, and claim private status otherwise. The dean of Harvard’s Graduate School of Education, Jim Ryan, remarked in an interview earlier this month that he “scratches his head” when he hears that charter schools are efforts to privatize public education, and that “it’s hard to see how [such claims] have a lot of merit.”
Donald Cohen, the executive director of In The Public Interest, hopes the group’s new report can help cut through some of this confusion, and provide progressives with a more useful way to conceptualize privatization in public education. “People tend to think privatization is about giving it to the private sector, or a private corporation,” he says. “But privatizing is more than that. It’s when there is less public control, fewer regulations, and more governance by market forces.”
And despite two recent National Labor Relations Board decisions that found charter school employees to be private-sector workers, Cohen says this shouldn’t deter progressives from viewing the teachers who work in charters as public employees.
“If you’re a subcontractor working as a janitor in City Hall, or a subcontractor picking up trash around a neighborhood, you’re still providing a public service,” he says. “There’s a falsehood that we can create through subcontracting that they’re not our employees, and our responsibility.” In The Public Interest’s report argues that when governments directly provide services, they generally offer living wages and decent benefits to workers. But when private companies take control, they tend to slash labor costs, hurting not only individual workers and their families, but also local economies and the stability of middle- and working-class communities.
For Cohen, the nonprofit/for-profit debates also tend to obfuscate some larger issues regarding regulation and public control. He notes that nonprofit charter schools still regularly contract out their operations to for-profit companies anyway. And while traditional public schools also engage in some level of subcontracting, the public’s ability to review the deals and financial contracts their school makes with private companies, paid for by tax dollars, is made far more difficult when those institutions are nonprofits and for-profits.
As a result, education advocates have started to push for laws that would require greater accountability and transparency in the charter sector—lifting up unacceptable instances of fraud, discrimination, and abuse. A report issued in 2014 by the Annenberg Institute for School Reform laid out some concrete policy recommendations, many of which have been since promoted by teacher unions across the country.
Lastly, In The Public Interest’s new report also discusses the ways in which charter schools accelerate the racial and economic segregation of public schooling—something they say is common for sectors that grow increasingly privatized. They cite research from the Civil Rights Project at UCLA showing that charter schools are more racially isolated than neighborhood public schools in almost every state and large metropolitan area in the country. Rapid charter growth, coupled with increased segregation, In The Public Interest says, helps to destabilize school finances, resulting in fewer resources, particularly for students of color, disabled students, and poor students.
I asked Cohen what he hopes to see come out of this new study. “Look, this is a big, deep, and dense report,” he answered. “We deal with privatization and outsourcing in a million pieces—the charter schools here, the prisons there. We wanted to say no, there’s something bigger going on here that’s a significant contributor to growing inequality. And that’s the slow and steady transfer we see from public responsibility to private responsibility.”