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Event Transcript
December 13, 2000

New York City Conference on School Choice

Afternoon Remarks

    Professor Robert Reich, former U.S. Secretary of Labor

Panel Discussion: The Future of School Choice: Learning from Michigan and California and Considering New Models of Increasing Educational Opportunity

How will the outcome of school choice ballot initiatives in Michigan and California shape the future of the movement? What lessons should be learned at the local, state and federal levels? Panelists will also discuss different models of increasing educational opportunity and future strategies for increasing school choice.

    Matthew Miller, syndicated columnist
    Joe Overton, Mackinac Center for Public Policy
    John Coons, University of California at Berkeley Law School
    John Faso, New York State Assembly Minority Leader
    Moderator: Bruno Manno, Thomas B. Fordham Foundation

MR. OLSEN: Graduate School under his leadership as Secretary the family medical, family and medical leave act was implemented and the Department of Labor cracked down on unsafe work sites and on fraudulent purveyors of pensions and health insurance. Prior to his appointment as Secretary of Labor, Professor Reich was a lecturer at the Harvard University Kennedy School of Government, a graduate of Dartmouth College and Masters Degree with honors and a masters Degree from Oxford University as a Road Scholar and then received his JD from Yale 1973. He is a man who has clearly stood on his principles throughout his entire career both in and outside of formal public service. And as such his awards, school choice, are ones that receive great attention and merit great interest.

His next book, The Future of Success, will be published in January. So please join me in welcoming Secretary Robert Reich.

MR. REICH: Thank you.

MALE VOICE: You are welcome.

MR. REICH: Mr. Mayor, Manhattan Institutionalists, fellow right-wingers, thank you very much for inviting me.

First I want to extend my congratulations to the new president elect who I think is George W.? Is it not? We donít know yet. Do we not know? But I think itís also extremely important we are going to be; this was the most partisan period of time I remember since perhaps Watergate, perhaps before that, maybe even Vietnam. And it was the post election period that was partisan. It wasnít the election. Most Americans didnít get terribly passionate about this election, but they did get extraordinarily passionate about the last five weeks.

And I want to suggest to everyone in this audience who is interested in school choice or vouchers or however you describe it that there is a lesson to be learned here. Americans generally speaking are not partisan. They are very practical. They want to roll up their sleeves and get on with whatever the issue is that has to be solved. They donít particularly like partisanship. They donít like stridency. They donít like what they see in the evening on cable television and I sometimes contribute to that and I cop a plea. But I donít yell or I try not to yell. They donít like yelling. They donít like slogans. And I think that when it comes to education and when it comes to particularly education of our poor and near poor and working, we used to call them working class children, it is very important that we put aside partisan sounding language and that we try to talk in a way that can be heard by all of us. And that we listen very carefully to what everyone is saying.

I worry a bit that school choice and vouchers are drifting into one of those issues like abortion and communism and others where people have stopped thinking, where the sides are getting dug in, where there is very little or less and less listening and very little or less and less practical problem solving going on. And I want to tell you how I got intellectually to where I have got on this issue, not as an exemplar. I am certainly not tooting my horn. But I want to use perhaps my intellectual journey as a way of suggesting to you, those of you who are absolutely sold on vouchers and choice and the magic of the marketplace, but also those of you who are deeply concerned about the future of the public school that this may mean a major assault or represents a major assault on public education. I hope that both sides can listen to what I say openly and not immediately object to my word.

I tried incidentally floating some of these thoughts in an article in the Wall Street Journal earlier this fall. I think you have a copy in your materials. And I was amazed at the consequence or the results because so many people, republicans mostly, said Reich is for vouchers. And so many people who I normally associate with were angry with me. And I asked them if they had actually read the piece carefully and they said no. We get pigeonholed. We get stereotyped. We get labeled. And that is a substitute for thought, a substitute for thought. So I am going to explain to you my intellectual journey on this and I do invite your own comments and hopefully we can have a discussion about this.

Now by far the largest barrier to, I am standing so high here I feel like itís a violation to be thisÖ But I donít worry about those things any more. By far the biggest obstacle to upward mobility in this very prosperous nation of ours is the lousy schools that so many of our poor children attend. Now before I divulge my remedy for this I want to discuss the two main reasons why poor kids attend lousy schools. And this is based upon a lot of research. It is based upon a lot of interviews. Itís based upon my four years as Secretary of Labor when I traveled around to poor communities all over America. My colleagues in the cabinet very often went to conferences and went to meetings in the commercial capitals of the world, Paris and London and Hong Kong. And I went to different places. I went to Buffalo and Toledo and lovely cities all. I donít mean in any way to deprecate them. But I did have a view of America, a view of the poor and of working class America. And I spent a lot of time in schools really just walking around schools talking to teachers and also talking to students.

There are two big problems and I think we have to be very honest about these two problems. Neither alone is the problem, and I am not suggesting that either of them explain the entire universe of problems. But there are two problems at the core of the overall issue of poor kids in lousy schools. The first, and some of you in this audience may take objection to this, but listen please. The first is that there is often not enough money. Across America about half of school revenues come from local property taxes. Now the problem is that increasingly Americans are segregating by income in terms of where they live. We now have entire communities that are rich or upper middle class or middle class or working class, as we used to say, or poor. And so that relying on 40 or 50% of revenues per school on local property tax inevitably, inevitably given the segregation by income is going to mean very unequal revenue streams. Poor districts have lower tax basis, which translates into fewer dollars per pupil. Court ordered state equalization formulas seeking to redress this financial imbalance have not worked.

A new analysis from the center of the National Center for Educational Statistics shows that most poor children attend schools that spend less per student then their stateís average. Now it should not be surprising given this that poor schools are more run down then schools in richer communities. They have fewer new books. Their equipment is more outmoded. Their teachers do not earn as much as teachers in richer schools in richer communities even though the challenges they face are formidable.

Now a new study of New York State schools shows the same pattern. Starting salaries for teachers in New York City are about 25% lower then those for comparable teachers in the suburbs. New York States big urban districts are falling further and further behind in the quest to hire highly qualified teachers. Itís a small wonder that as the department of education of the United States recently reported much of the teaching in schools serving poor communities is now done by teacherís aids without college degrees instead of qualified teachers. The law of supply and demand is not repealed at the schoolhouse door. These are hard jobs.

These are difficult jobs teaching in inner city schools. And rather then pay teachers less to take on these jobs; if we want to get very talented people and committed people there we canít solely rely on their love and commitment. We have to, as any one who studies markets understands weíve got to pay them not less. Weíve got to pay them more.

The second reason poor kids attend lousy schools is that most other kids who are attending them are also poor. Now this goes back to this concentration of poverty, the fact that we are segregating more and more according to what we earn in this country. Poverty in America is becoming more geographically concentrated. So the poverty related problems of these children including drugs and violence and unduly behavior, low self-esteem and parents too overwhelmed to give their children the attention they need are compounded by the presence of many other children with the same problems or similar problems.

Peer influences among children are enormously significant, as the parent of any teenager will attest. I have two teenage boys. They are dear and wonderful boys. Their peers are, I wonít say more important to their daily lives then I or their mother is, but they are nonetheless very important. And there have been a number of studies charting this. High school students are less likely to go to college when fewer of their classmates are college bound. They are more likely to get into trouble with the law when more of their classmates get into trouble and are more likely to have babies out of wedlock when more of their peers are having babies out of wedlock.

New evidence from some of my former colleges at Harvard strongly suggests that peer effects extend beyond schools to the communities surrounding them. After a random sample of poor inner city families in Boston received housing vouchers that enabled them to move to higher income suburbs that childrenís behavior improved on many scales relative to children and families who wanted the vouchers, but lost out in the lottery. Now this is one of those studies that is a good blind control study because here you have two groups of parents and children all of whom wanted vouchers. All the parents wanted vouchers. It was a lottery. Only some of them got them. And they traced what happened to those children, used a baseline in terms of a lot of different indecent behavior before hand and saw that the children who moved out their behavior improved considerably.

Now any sane approach to giving poor kids a better education would have to respond to both of these reasons that Iíve outlined. And again, I am not suggesting that these are the only reasons. I just mean that these are very important reasons. Instead of giving poor kids less money per pupil then middle-income kids get we should give them more.

Per pupil public expenditures in the United States now average between 6 and $7,000.00 overall. Now there is tremendous variation. It ranges all the way from 4,000 up to around 11,000 and they are measurement difficulties. If you include special Ed in that it pushes it up. But generally speaking letís just for the sake of this particular discussion assume we are about 6 or $7,000.00 per pupil. So my suggestion would be that we back up every child from Americaís poorest 20% of families with 10 to $12,000.00 in educational expenditures per year. And children from families in the next quintile 8,000 to 10,000 and so on up the income ladder.

At the same time we should bust up the concentrations of poor and lower income children in the same schools. Now we tried to do this in various ways. Weíve used magnet schools. We tried busing. Busing doesnít work very well for a whole variety of reasons. But there are other ways that we could create incentives for them to disperse. For example, let any school that meets certain minimum standards compete to enroll these kids and receive the public money that follows the child. Now for the sake of this discussion letís put aside the very tricky and very important issue. And I donít mean that itís not important. It is very important. But right now for this discussion letís just put aside that tricky first amendment issue with regard to money going to parochial schools. I am happy to talk about that, but just put it aside for the sake of this argument. Go a step further. Give children from families in the top 20% of income only say $2,000.00 to $4,000.00 of public money each year. Now, of course, the families are free to supplement that with their own money and children from families in the next to highest quintile 4 to $6,000.00. I am giving you an example of what a progressive, a progressive system might look like with regard to funding those children. Now this way schools in nearby wealthy suburbs also will try to lure some of the poor kids their way to meet their budgets and perhaps even sending out vans to collect them and drop them off.

Now notice I have not used the term voucher. It has become so loaded as I said before like abortion or communism that you canít talk about vouchers without being torrid as either for or against. And again, that ends the conversation. Vouchers alone, if itís just vouchers, if you donít have the other aspects of the proposal that I am suggesting, specifically if you are not giving poor children more money relative to children of higher income parents, if you are not setting some standard with regard to what those schools that are eligible for the vouchers have to achieve, then you are just going to end up sorting American children even more further concentrating the kids who are more needy or more troublesome or whose parents are less able to cope in schools that are even worse then before. As every slightly better off child runs for the exits such schools would end up with even fewer resources per difficult child.

Now notice what I just said, fewer resources per difficult child, difficult either behaviorally or in terms of needing attention with regard to pedagogy. America would become more, not less, but I am afraid more socially stratified. So donít call my proposal a voucher plan. Call it something else. Call it liverwurst. Call it a liverwurst solution. My liverwurst plan is designed to get more money to poor kids and break up concentrations of poor kids in the same institutions. In other words, go directly after the core reasons why poor kids are locked in bad schools.

Now this will be a hard sell to say the least. Any hope for it requires a coalition of conservatives who want to give poor kids and their families more choice and who believe that market mechanisms are going to be a very powerful incentive on schools and liberals who want to give them more money. But I do believe that liverwurst is the only solution.

Thank you very much. And I am very, very happy if I donít fall off this to answer any of your questions or any comments you may have. I am notified we have five minutes. You run a tight ship here, a very tight ship. And maybe if you could just introduce [interposing]

MALE VOICE: [Inaudible]

MR. REICH: I see. Now if you can just introduce yourself Iíd be happy to answer your question.

MR. TURNER: Yes. I am Jason Turner, Commissioner for Welfare in New York City. From your Wall Street Journal article, and you made reference to this in your remarks, you say the biggest drawback to vouchers is the kids who are most troublesome or whose parents couldnít care less or are overwhelmed with other problems will almost certainly end up bunched together in the worst schools. This as an argument against allowing choice, which is not your argument per say, but is an argument that we often hear and itís referenced as a problem in your Wall Street Journal article troubles me.

Why is it even if itís true, why is it moral, morally acceptable to hold better behaved children hostage so that less well behaved children can sit next to them?

MR. REICH: I donít believe it is, Commissioner. But I donít by the same token consider it morally acceptable for society to encourage a sorting mechanism to an even greater extent then we already sort. It begins, the question really, the moral issue depends upon where you begin. I think given that very wealthy parents right now effectively exercise choice both in terms of where they live. They choose a wealthy community. The voucher, if thatís what you want to call it, is imbedded in the housing price and in the taxes they pay and they have a terrific school. It may be called a public school, but for all intents and purposes itís a private school. Or they may take their kid and send the kid to a private school. Why shouldnít all parents have that same right?

As I go around the country many poor parents say to me in poor communities, look, I care about my kidís education. Why shouldnít I have the same right? Why shouldnít I be able to take my child and separate my child from the kids who are real troublemakers who have tremendous learning problems whose parents really donít care? Let them all be bunched together in effect. And I am frankly very torn.

I think what we need to do as a society is not accept this as an either or proposition. I would much rather that we as a society say, look, we are going to try to bust up concentrations of kids who are very poor and very needy and we are going to give them more resources. So we are not going to put on the table and invite the option of simply warehousing the poorest and neediest kids with very little resources.

Thank you for your question. Yes sir.

MR. ROSEN: Yes, sir, I am Gary Rosen from Commentary Magazine. I have a two part question for you. In the first place your scheme as you describe it is ambitious and involves redistributing resources in a certain way. Would you accept as an intermediate step just giving these poor kids and the families the per capita funding that is already attached to them as they go to public schools? I mean we saw in the case of Cleveland the voucher is 2,500, 2,000 where the total funding for those kids is I guess in the neighborhood of 6 or 7,000.

Second, and appreciating that voucher is a real scare word in our politics, I wonder if it wouldnít be helpful though, since we canít really sell a program of liverwurst if public figures on the left or people who are thought of as liberals didnít embrace it if it might become less of a scare word. And if by saying you were for vouchers, in fact, you might make it a more acceptable thing for other people who share your politics to embrace.

MR. REICH: Well, let me take your second question first. I think that in the history of ideas, and I have spent a lot of time thinking about how ideas become policies, the power public ideas. In the history of ideas you get to a point where there is a fork in the road and either the idea becomes a litmus test, a kind of symbol at which point that idea is dead as a policy lever. It may be a sorting device in terms of ideology, but it is not really any longer capable of driving policy. Or you get a point where a kind of flexion point where an idea reaches a critical mass and it is a coalition driving idea. It solves problems that a lot of different people have. It may not solve exactly the same problem that people have in mind, but it brings people together around common cause.

I am afraid that the term voucher regardless of what a liberal might say is rapidly approaching the point of a litmus test type of term. It drives people apart rather then bringing them together. Obviously liverwurst is not the right term. Having money follow children might be a better way of putting it. But even there, and this gets to the first part of your question, unless you are talking seriously about more money following the poor children then you canít with a straight face assume that those children are going to have the kind of alternatives that they need to have. And nor can you expect to form the kind of coalition that you need in order to break through the logjam, the gridlock that is built up around this issue. Yes.

MALE VOICE: The liverwurst idea might have some support in Milwaukee. I would just point out if we make it. But I just wanted to check just to be sure I heard right. In your liverwurst plan it includes the use of vouchers, whether itís the V word, you could use grants, scholarships. All the states, almost all the states have tuition grant programs. The Pell grant [interposing]

MR. REICH: Yes, in fact [interposing]

MALE VOICE: You go to brand [interposing]

MR. REICH: If I can say parenthetically many states have voc Ed systems in which there is essentially a money following the child approach.

MALE VOICE: Without using the word voucher.

MR. REICH: And there are choices, yes.

MALE VOICE: So we have an alternative to liverwurst or the voucher word. But you would allow the money whether itís for a poor kid or a wealthy kid to not only be used in a publicly owned school, but to go to a private school that met whatever the standard were that were set.

MR. REICH: Yes. And part of the discussion here imbedded, again I use this proposal and I offer it only as a way to bust up the logjam and to get us all talking about some ideas. But, yes, the schools could be private schools, but that begs the question what the standards are. In other words, what do we define as a public school versus a private school? We have charter schools that meet public standards.

MALE VOICE: In Milwaukee the difference between charter and choice or charter and voucher has become less and less significant. In fact, going to the public school, in effect the money, the state aid amount goes to the public school or it could go to a publicly owned charter school or it could go to a privately owned charter school or it could go to a choice school.

One other question I wanted to [interposing]

MR. REICH: If I could just, Mr. Mayor, respond to that. Ideally we get to a point in this debate where we are not debating the future of the public school. We are debating about the future of education and we understand that as long as these institutions meet certain standards they are all public in that sense.

MALE VOICE: Yes. Thatís precisely what is happening in Milwaukee. The public schools themselves as entities actually, I believe are showing signs of thriving as well as public universities did with GI Bill, Pell Grants and tuition grant programs.

One final thing, if I can indulge this dialogue that we are having here. You mentioned that you didnít want to bring up the religion question, but letís bring it up anyway. Whatís the harm with religion? Or another way I always sort of put it as a Presbyterian, I believe there are greater threats to our kids in the inner city then say Catholicism. How do you feel about that?

MR. REICH: Am I in favor of religion? Yes. Do I think that the first amendment issue is causing us to have difficulty debating this issue or separating the pieces of this issue? Yes. What you see and what I hope you hear from me is a plea for a roll up the sleeves type civil discussion about education choice, liverwurst, however we want to talk about it. We can have a very important and should have a very important and useful discussion about the first amendment and public support of religious or parochial schools. Thatís a fine discussion to have. But my point is itís a slightly different discussion then a discussion about whether some degree of choice is appropriate or good and whether we want to alter the system of public financing in order to give and empower our children so they have genuine choices if they are poor kids.

Yes, letís throw parochial schools into the mix of our debate, absolutely. But I am afraid that they become sort of another lightening rod right now if we want to continue this debate and make sure this debate stays on track.

Thank you again.

[next section] [previous section]


Center for Civic Innovation.



This conference also available as MI CONFERENCE SERIES #4


Introduction and Opening Remarks

Welcome by Henry Olsen, The Manhattan Institute

The Honorable Rudolph W. Giuliani, Mayor of New York, with brief video presentation

The Honorable Gary Johnson, Governor of New Mexico

The Honorable Frank Keating, Governor of Oklahoma

Panel Discussion: Synthesizing the Evidence: What Research Tells Us about the Effect of School Choice on Student Achievement

Jay Greene, Manhattan Institute

Paul Peterson, Harvard University

Eugene Hickok, Pennsylvania Secretary of Education

Moderator: John Gardner, Milwaukee Public Schools

Panel Discussion: Report from the Grassroots: Responding to the Growing Demand for Alternatives

Mikel Holt, Milwaukee Community Journal

Teresa Treat, Children First CEO America

T. Willard Fair, Urban League of Greater Miami

Carol Reich, Beginning with Children Foundation

Moderator: Jeanne Allen, Center for Education Reform

Afternoon Remarks

The Honorable John Norquist, Mayor of Milwaukee

The Honorable Bret Schundler, Mayor of Jersey City

Panel Discussion: Choice and the Constitution: Debating New and Old Questions about the Constitutionality of Vouchers

Clint Bolick, Institute of Justice

Robert Chanin, National Education Association

Charles Fried, Harvard Law School

Elliot Mincberg, People for the American Way

Moderator: Joseph Viteritti, New York University

Afternoon Remarks

Professor Robert Reich, former U.S. Secretary of Labor

Panel Discussion: The Future of School Choice: Learning from Michigan and California and Considering New Models of Increasing Educational Opportunity

Matthew Miller, syndicated columnist

Joe Overton, Mackinac Center for Public Policy

John Coons, University of California at Berkeley Law School

John Faso, New York State Assembly Minority Leader

Moderator: Bruno Manno, Thomas B. Fordham Foundation


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