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“From an investment perspective, the education crisis has created an enormous opportunity and powerful momentum for those companies with solutions to our educational problems—whether through better management . . . or the innovative application of technology” — The Emerging Investment Opportunity in Education, Montgomery Securities, 1997.
Privatization generally refers to a process where private efforts are used to supplant governmental programs. In schooling, however, the term addresses a variety of ways in which market ideology and corporate money affects public education. Examples include subcontracting traditional school services, using corporate-developed curriculum, and creating a new breed of business called Educational Maintenance Organizations that seek to profit by managing public schools. School vouchers also are a part of privatization efforts.
The quote above speaks to a new American mentality that believes public education can be a source of private profit. The mindset reflects a nationwide movement that promotes privatization of governmental programs and services.
Starting in the early 1980s, a neo-conservative movement swept the United States. At its heart, neo-conservatism maintains that private enterprise is a better catalyst for social change than governmental programs, including public education. Proponents of privatization maintain that private enterprise is a more efficient and better alternative for addressing social problems than governmental action.
Bolstered by well-financed, influential think tanks, the neo-conservative movement has led a two-pronged assault on governmental programs claiming (1) they are ineffective and cause many of the problems they were designed to remedy, and (2) private actions, both charitable and for-profit, are the best remedy for social ailments. The effect of neo-conservative ideology on mainstream political discourse cannot be underestimated.
Despite much evidence to the contrary, it is now often taken as a given that many governmental programs, including public schools, are failing, and that privatization is a more viable and more efficient alternative. From welfare reform to health care and municipal services, neo-conservative thinking now shapes debate about public policies at the national and local levels.
Over the last ten years, Wisconsin welfare programs, prison industries and administration, the park reservation system for the Department of Natural Resources, and schooling in Milwaukee, through charter schools and vouchers, were all privatized to varying degrees. Legislative efforts also were unsuccessfully introduced to allow for the expansion of subcontracting services within public schools.
If, following Wisconsin’s lead, more states impose revenue controls on public schools, budget pressure on districts will increasingly force them to seek private instead of public capital. As this trend continues, distinctions between public and private spheres will erode and corporate interests will increasingly permeate the realm of public schooling.
In short, political action that limits money to public schools helps fuel privatization efforts.
Examples of Privatization
Estimates vary, but the U.S. spends between $250 and $350 billion annually on K-12 education. Many view this as an economic opportunity.
The discussion that follows will look at six ways in which privatization efforts are affecting public schooling. In many cases, privatization results from unexamined claims about its alleged benefits, in addition to the need of districts to find alternative sources of funding.
Currently, about 30 percent of all school districts nationally report some type of subcontracting. Transportation is subcontracted the most frequently, with food service close behind. Custodial and maintenance services are the third most frequently subcontracted school service. Results vary by state, of course (NEA 1996).
About 30 percent of all districts nationwide contract for transportation services. Wisconsin ranks in the top ten nationally for contracting transportation services. Laidlaw, Inc. and Ryder Student Transportation Services, Inc. are the two largest transportation providers nationally. Other businesses, including Johnson Controls of Wisconsin, are seeking to expand their role in public education by managing school district programs, including transportation. Johnson Controls, however, ran into trouble in 1994 when unqualified personnel could not maintain the buses, leaving thousands of children stranded in Fairfax, Virginia. The district cancelled its contract shortly thereafter.
One problem with subcontracting is that firms often seek the least expensive instead of the most qualified personnel to run operations.
The nation’s $4.7 billion-a-year school lunch program is second in size only to McDonalds. Many districts are already familiar with the presence of fast food chains in the school cafeteria. This is a form of subcontracting where traditional food service roles performed by district employees are replaced by private enterprise. In many instances, workers are employed by the companies and do not enjoy the bargaining rights of other district personnel. Privatization of food service is a growing trend, increasing from about 1 percent to over 7 percent of the nation’s schools between 1980 and 1990.
In addition to well-known fast food chains, Marriott International and Aramark Nutrition Services of Philadelphia are the two largest private providers of school breakfasts and lunches nationally.
Under privatization, many schools report higher rates of staff turnover. Some research indicates that self-operated district food services were actually more efficient than food service operations that were contracted out (Cline 1995). Moreover, food served a la carte by private providers does not have to meet the same USDA nutrition requirements as food programs that use tax dollars.
PepsiCo, Inc. has been targeting school lunches since 1994, when it announced a new marketing program through its Pizza Hut franchise. Served a la carte, the food is not subject to USDA nutrition guidelines, a fact that should give parents pause as their children are increasingly exposed to a fast food diet. Joy Wallace, head of the marketing program, noted “It’s to our benefit to have young people exposed to Pizza Hut very early” (NEA 1996).
Subcontracting maintenance and custodial services presents many concerns. A lack of knowledge about buildings and their equipment, the inappropriate use and application of chemicals, and little sense of community with a building’s students and staff are all problems that caused districts to cancel privately run custodial and maintenance services. High rates of turnover, poor quality of work, and the use of employees with criminal backgrounds by private firms have caused districts to return to using their own personnel (NEA 1996).
Service Master of Illinois is a well-known company that handles custodial and maintenance in addition to food services. Public schools represent a growing part of this company’s business.
Subcontracted schools—the education industry
Districts have contracted with private companies such as Education Alternatives Inc. (EAI) of Minneapolis, to take over and run district schools. The Edison Project, founded by former head of Channel One, Chris Whittle, is another well-known company that seeks to profit from the “education industry.” Called Educational Maintenance Organizations, these companies promise to significantly improve student achievement as a marketing strategy. In a relationship that is similar to how charter schools are run, Educational Maintenance Organizations sign contracts to receive money from the school district for operating a school.
EAI’s success in the early 1990s has diminished of late. Because of continued problems, the city of Baltimore cancelled its contract with EAI in 1997, as did Hartford, Connecticut. The Edison Project markets new schools, often using promises of new technology, ample classroom supplies, and a special reading curriculum to entice districts. Research, however, shows them to be ordinary schools when it comes to results (Molnar 1997).
Based on the idea that competition will improve all schools, vouchers are at the heart of the school privatization effort. School vouchers take money from a public school and give it to a private or religious one. Although many claim vouchers are popular, the public has consistently rejected voucher schemes through popular referendums. Where voucher programs do exist in Milwaukee and Cleveland, they were created by legislative fiat. A handful of privately funded voucher systems also exist in various cities.
Proponents argue that voucher programs will help students and force public schools to improve as they compete with private ones. Milwaukee, however, lost over $25 million in1998 through vouchers, and could lose over $70 million if all eligible students participated in the program. It is difficult for public schools to improve with such losses in funding. Moreover, research to date has shown no difference in achievement between students in voucher schools and those in Milwaukee Public Schools.
[See the Great School Information Papers on vouchers and charters for more on this topic.]
Because students are a captive audience it is easier to reach them through direct advertising. For example, Channel One is currently shown to over 40 percent of secondary schools nationwide (Light 1998). Channel One is a company that gives televisions to schools for classroom use. In exchange, schools must promise to show news programs (which include advertising) produced by Channel One.
Schools are also beginning to use hallways for advertising and are even placing billboards on rooftops to generate needed funds.
Some corporate literature refers to students as “future consumers,” and research shows that placing products within a school setting, where children tend to trust information imparted to them, can have a strong impact.
Exclusive rights
Corporations also seek exclusive contracts for their products with school districts in exchange for money. PepsiCo, for instance, donated $2 million to help build an athletic stadium in Jefferson County, Colorado. In exchange, it retained exclusive rights to sell soft drinks in all 140 district schools, estimated to generate over $1 million annually (Light 1997).
In Madison, Wisconsin, the district entered an agreement with Coca Cola, granting exclusive rights to sell soft drinks in the district in exchange for monetary assistance. In addition to a $100,000 signing “bonus,” the district is guaranteed a minimum of $515,000 annually as a commission on sales.
An area of special concern is the use of corporate sponsored-curriculums that often presents information in a biased manner. Environmental curriculums, for instance, supplied by oil companies, understandably speak to the benefits of development and downplay environmental problems and disasters (Willers 1999). Although some of the information may be useful, it should be remembered that companies intend to market products and their image as well.
Such curriculums are designed to be “teacher proof” in that they have pre-established content and, in the case of Channel One, contractually require teachers to forfeit time to the corporate-determined content.
Although needs for district funding can be compelling, discussions need to consider the important role public education plays in our society. The use and influence of corporate money compromises the unique democratic nature of public education. In addition, privatization is often far from a cure or a more efficient alternative. Here are some points to consider:
Conclusion
Many of the promises of privatization fail to survive close examination, especially as it applies to public education. WEAC firmly believes that private sector providers should not displace the jobs of public employees.
— WEAC Division for Collective Bargaining/Research
Sources
Cline, Tami. “A Closer Look.” School Food Service and Nutrition. (January 1995): 28.
Light, Julie. “The Education Industry: The Corporate Takeover of Public Schools.” Corporate Watch, at www.igc.org, 1998.
Molnar, Alex. “Interview with Alex Molnar.” Corporate Watch, at www.igc.org, 1998.
National Education Association. “Contracting Out: Strategies for Fighting Back.” National Education Association, Washington D.C., 1996.
Willars, William. “Corporate fueled education gets passive OK.” Wisconsin State Journal, July 13, 1999.
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