Profit has a role in public schools

A version of this commentary was published in the Midland Daily News on Dec. 31, 2006

Is it wrong for a private company to earn a profit when it does business with a public school? Is it ever appropriate for a public school to contract with a private, profit-making company at all?

These questions or variations of them come up every time that a school board considers any form of privatization or "contracting out" — in part because the unions that represent school employees use them to raise objections. Unions oppose privatization even when they employ it themselves at their own headquarters.

Critics of privatization often make an issue of the fact that charter schools sometimes hire private management firms. In opposing this, one former state representative told an audience, "I don’t believe it’s appropriate for somebody to make a profit off of public education."

But if we follow the anti-profit premise to its logical conclusion, we would have to pass laws requiring public schools to hire only government-owned construction companies to build or renovate new buildings (fortunately, the government usually doesn’t run construction companies). Desks, chalk and pencils would have to be purchased from government-owned desk, chalk and pencil factories (fortunately, the government usually doesn’t run those either, except in places like North Korea). At lunch time, students would have to eat food that was grown on state-run collective farms and sold in government grocery stores by government employees.

Or, alternatively, we could pass laws that tell public schools it’s all right to buy these things from private companies, but only from those that lose money instead of earn it in the form we call "profit." It’s hard to imagine that school districts could find suppliers who would provide a good or a service at a loss. Not even the Michigan Education Association does that. In addition to the tens of millions of dollars it extracts in compulsory dues from its union members every year, the MEA’s monstrously expensive health insurance operation, MESSA, rakes in hundreds of millions more from taxpayers.

In fact, the MEA is not so much against profit as it is simply against somebody other than the MEA making any. In the MEA’s flagship publication, MEA President Luigi Battaglieri stated: "Private companies don’t care about our students or our communities. They are in the business for the money. They aim to turn a profit and that’s not in the best interest of public education." But the headline for the cover story in the very same publication read, "Adrian food service staff fight privatization by turning big profits for district."

Perhaps Mr. Battaglieri was unaware that the profits that private companies earn allow them and their employees to pay the taxes that keep him and the MEA in business.

The fact is that public schools have always relied on profit-making firms for just about everything. Maybe what’s needed in the public schools is more profit, not less. Think about it: Where is the crisis in public education these days? Is it in the quality or availability of desks, food or computers, or in other areas provided by the for-profit private sector? Do we have a national crisis in paper and pencils?

The education crisis that concerns Americans from coast to coast is not in these things. It’s in what happens in the classroom, the part that is delivered by government, regulated by legislatures, certified by government university education departments and supervised by district bureaucracies — the part that could benefit from the same choice, accountability and dynamism that make our relatively free, profit-driven economy the envy of the world.

A good number of politicians and bureaucrats don’t like profit, and that’s nothing new. They’ve been bad-mouthing and taxing it since the sun first came up in the east. For some like the MEA, it’s self-serving rhetoric. On the part of others, it represents neither deep thought nor study, but simply knee-jerk bias.

School districts should consider all options fully and objectively — including provision of goods and services by their own employees, by volunteers, by nonprofits and by for-profit firms. Schools aren’t supposed to be a public works employment scheme. They exist primarily for the benefit of the families who send their children to them. If a school board finds that it makes sense to contract out operations like custodial or busing services and put the savings to work for the kids, doing so ought to be a no-brainer. To waste time and money spreading myths and misconceptions about profits and private firms serves no one but selfish interests.

Lawrence W. Reed is president of the Mackinac Center for Public Policy, a research and educational organization headquartered in Midland, Mich.

Reader Comments

The MEA seems to be best at looking out for what is best for them. The premise that no company should make a profit off of public education is ludicrous. Public schools need to be able to spend their money in the most economically, cost-effective manner that will send as much money into their classrooms as possible. If that means contracting out custodial and food services, then so be it.

No clear-thinking American can say that less money should be spent on classroom materials, books, technology, etc. For some school districts the only possible way to spend more money in the classroom is to contract out services. I agree with Mr. Reed. Public schools have, and will continue to rely on for-profit companies in the day to day operations of every public school district. To change that would be creating a paradigm shift in public education that the public should not have to deal with.

The MEA, any union for that matter, needs to be clear on what their objective as a union should be. Is it to whine, pitch a fit, and waste time when something doesn't go their way. Or should the MEA and all other public school unions equip their members with the knowledge and support needed to create the best education a school district can provide? I think the answer is very clear.
- Jamie Hawkins, 5th grade teacher, Kingsley Middle School, Kingsley, Mich.