School District Related Housing Costs Key to Sinking Middle Class?

Interesting article by Elizabeth Warren and Amelia Warren Tyagi argues that the idea that the middle class is overspending itself into debt is a myth. Instead, they try to show that a key reason so many middle-class folks are over-leveraged is because of home costs linked to good schools:

Why such a staggering increase in the cost of housing? That is a long, separate discussion, but one point is worth underlining here: when a family buys a house, it buys much more than shelter from the rain. It also buys a public-school system. Everyone has heard news stories about kids who can’t read, classrooms without textbooks, and drug dealers and gang violence in school corridors. Failing schools impose an enormous cost on the children who are forced to attend them, but they also impose an enormous cost on those who don’t. . . .

A 2000 study conducted in Fresno, California, (population 400,000) found that, for similar homes, school quality was the single most important determinant of neighborhood prices —more important than racial composition, commute distance, crime rate, or proximity to a hazardous-waste site. A 1999 study conducted in suburban Boston showed that two homes less than half a mile apart and similar in nearly every aspect would command significantly different prices if they were in different elementary-school zones. Schools that scored just five percent higher than other local schools on fourth-grade math and reading tests added a premium of nearly $4,000 to nearby homes. . . .

Perhaps the strongest evidence that parents’ concern for their children’s welfare has driven their spending is the relative changes in housing prices for parents and non-parents. The federal government has not reported the data for the full 30-year period we have been examining, but looking at the period from 1984 to 2001 we see that housing prices for families with at least one minor child at home grew at a rate three times that of other families.

Achievement Gap and National GDP: Fantasy or Fact?

This recent NY Times article reports on a study that argues:

[If US] achievement gaps [of poor and minority students] were closed, the yearly gross domestic product of the United States would be trillions of dollars higher, or $3 billion to $5 billion more per day.

Looking at the actual study, however, it seems as if they are assuming a linear relationship between increase in education and increase in employment.

(See page 84 and 92 of their supporting documents. In their charts starting on page 88, they state that the outcomes they assume are "determined by assumptions about the ability to make use of higher skilled people and the quality of economic institutions.")

As I noted earlier, there is a great deal of evidence that education does not create jobs. In other words, these increases may happen on the margins, for the first few kids, but will fall off drastically after that.

I'd be interested in other perspectives. But it seems to me like this report simply feeds the fantasy of schooling, that if we just made schools better, all of our economic (and then social) problems would be solved.

States Slashing Social Programs for Vulnerable

Schools are going to be facing enormous pressures as poverty and suffering increases. As usual, those who are in the worst shape are facing the most dire circumstances. From the New York Times:

Battered by the recession and the deepest and most widespread budget deficits in several decades, a large majority of states are slicing into their social safety nets — often crippling preventive efforts that officials say would save money over time. . . .

[Federal stimulus] money will offset only 40 percent of the losses in state revenues, and programs for vulnerable groups have been cut in at least 34 states, according to the Center for Budget and Policy Priorities, a private research group in Washington. . . .

Ohio and other states face large cutbacks in child welfare investigations, which may mean more injured children and more taken into foster care [some counties losing 75 percent of their investigators]. . . .

[In Arizona,] the child protection agency stopped investigating every report of potential abuse or neglect, and sharply reduced counseling of families deemed at risk of violence. Some toddlers with disabilities like autism and Down syndrome are not getting therapies that can bring lifelong benefits.