There many casualties of the horrible housing market, from underwater families to weak car sales. But here's another one that might surprise you: Our public school system.
This month, the number of government workers the United States continued its long decline. But on the local level, something interesting has changed. For for the first few years of the recovery, public sector employees of all stripes -- teachers, EMS workers, police, etc. -- were getting pink slips. But in the last few months, that's no longer been the case. Local governments have started hiring again outside of schools. Meanwhile, teachers school staff are still getting laid off.
Here's employment in public education, dating back to 2009. It's still dipping.
Now here's the rest of local government hiring. It seems to be in the early stages of a modest recovery.
It's possible that school districts believe they're simply overstaffed. But I think a more reasonable explanation is taxes. Public schools are disproportionately funded through property taxes, while the other arms of local government survive on a combination of income taxes, sales taxes, state allocations, and a potpourri of other charges. During the recovery, total state and local taxes have grown by a few percentage points. But property taxes have actually fallen modestly.
Up through 2009, property taxes have been growing consistently for at least 20 years, and public school hiring had grown alongside them. Now they've stalled, and we're still firing educators, even as the rest of the economy seems to be gradually healing itself.
Some people might not interpret this as a bad thing -- there are a lot of conservative leaning thinkers out there who believe we've hired too many teachers at this point, and that our schools could probably use some slimming down. But the situation we're in does bring up a larger question. We've essentially tied our ability to invest in our children's educations to one particular sector of the economy -- the housing market -- that, for years, we tricked ourselves into believing would grow forever. We now know that's not true. Maybe it's time to re-evaluate if if we want to tie our investments in our kids' futures so tightly to our property values.
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