Privatizing Public Services | Prisons and Schools

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We often hear politicians say that the government should be run like a business. It’s one of those intuitive sayings that many Americans nod along in agreement with. Part of that business model is the push towards privatization of government services in order to save money and improve quality – and we’ve seen a lot of that in recent decades. But can public services with a relatively stable demand be run like a business – and more importantly, should they? The 60s and 70s were an interesting time in American history. The baby boomers were coming of age and demanding things like civil rights, women’s rights, the end to the war in Vietnam, and were generally causing trouble for the political establishment. So, Nixon began the War on Crime. Crime in this case being protests and riots and later the War on Drugs because you know… hippies. Drugs were already illegal but now they were hyper illegal. This escalated under Reagan, which is where the story of privatization begins for most industries, but for now, let’s just focus on prisons. The first modern private prison opened in Tennessee in 1984. In the years that followed, three major corporations turned private prisons into a multi-billion dollar industry. And at the same time, strangely, the prison population exploded. I can tell you right now that this doesn’t track with the overall population of the United States, the violent crime rate grew, but that peaked in the early 90s and has been falling ever since, so why is the prison population still growing? Because the definition of a jailable offense has expanded. And not only that, but the punishments for those crimes have also grown. Thanks in large part to the private prison lobby. In order to grow like a business, you have to increase demand for your product, but public services typically have a pretty stable demand. So private prisons pushed for harsher punishments and longer punishments. In the late 80s and early 90s, they passed mandatory minimum sentencing laws, first at the federal level and then almost every state followed suit. This took determining punishments out of the hands of judges. They couldn’t take context into account, it didn’t matter if this was your first offense, you were a model citizen, you didn’t mean to do it – didn’t matter, prison. Then they lobbied for Three Strikes laws. They vary by state, but in general, if you commit three misdemeanors, it’s a felony; and if you commit three felonies, you’re done – mandatory life sentence. This artificially inflated demand for prisons. Even though crime rates are down, the prison population continues to grow, there are currently 2.3 million prisoners in the United States and about 9% of them are in private facilities. Private prisons have the benefit of being built quickly, without taxpayer approval. They commonly refuse to take the most violent, and therefore the most expensive, prisoners, who then have to go to a government facility. But hey, as long as they’re saving the taxpayers money, right? It costs about 87 dollars a day per prisoner in a government run facility, while a private facility can do it for only 70 dollars a day, mostly by cutting staff and services… which as you might have guessed, leads to more violence… you get what you pay for. And those savings are negated by the fact that people in private prisons serve longer sentences. You know when you get sent- when someone else gets sentenced to 5-10 years for whatever crime? In a government prison, you’re up for parole in five years and will likely get out. In a private prison, you’re far more likely to serve the full ten. Not only because of the increased violence and increased infractions, but the fact that the contract with the government usually includes a 95% or more required occupancy clause. And the parole board remembers that when looking over your case. Now, we can debate over whether or not prisons are correctional and serve to rehabilitate prisoners – they don’t – but what isn’t up for debate is that private prisons are no better at it than government prisons. 76.6% of all federal private prison inmates are re-arrested within five years, which is virtually identical to government prisons. Because of that, the Department of Justice and Bureau of Prisons terminated their contracts with private prisons in 2016. Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own Bureau facilities. They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and they do not maintain the same level of safety and security. The contracts were immediately reinstated by Trump, but still. Private prisons are losing favor in the court of public opinion, and they know that, so they’re shifting focus away from corrections and towards immigration. You know those ICE detention centers you’ve been hearing about on the news? 75% of them are privately run. But prisons aren’t even close to being the only public service that has seen a shift towards privatization. Even some that you wouldn’t think could be privatized, like the military, are mostly private. There are currently three private defense contractors for every one uniformed servicemember serving overseas. And just over half of them are “combat-oriented”… so mercenaries. They cost an order of magnitude more than a regular soldier, at taxpayer expense, but the political benefit of having defense contractors far outweighs the monetary cost. Whenever a politician says we only have so many troops remaining in whatever country, mentally multiply that number by four. Defense contractors also don’t count towards the official American casualty numbers, so those look better too. Private contractors don’t have to follow the same rules, but they also don’t get the same legal protections. There hasn’t been a real push to privatize police forces in the United States, but we have been privatizing emergency medical services and even firefighting. Private firefighters aren’t exactly a new concept. The first fire brigade in Ancient Rome was owned by Marcus Licinius Crassus, who would haggle over prices with the property owner as their home was burning to the ground. I sure am glad we moved passed that and that would never happen in America. Wexford County, Michigan contracted out its ambulance services in the mid 90s, saving taxpayers $300,000 in the first year. Lowering taxes is one of the main claims and a primary driver of privatization. I very much doubt that Wexford County residents saw a reduction in their taxes, but even if they did, that averages to about $10 per person per year, or just 83 cents a month. I probably accidentally threw away 83 cents last month. You might be thinking that any reduction is a good reduction, right up until you need an ambulance and they hand you your bill. Private EMS charges the county less in taxes but charges the individual users significantly more on the back end. Privatizing infrastructure, like toll roads and bridges, comes with the same problem. It reduces local taxes but increases individual costs. In 2005, the operational rights to the Chicago Skyway were sold for the next 99 years for 1.8 billion dollars to a Spanish transportation company and Australian investment bank. Because you know, buy American. Cities and states have been doing this for a short-term cash influx, while offloading the cost of future maintenance, at the expense of long-term revenue. Had Chicago maintained control, they would have made almost 8 billion dollars over that 99 years, not accounting for inflation or toll increases. Which is exactly what happened anyway, a few years ago the bridge was re-sold to a collection of Canadian retirement funds, who then doubled the tolls. They will profit from the bridge until the year 2104. Perhaps the only case where privatization has saved taxpayers money both in taxes and on the back end is trash collection. And even then, they fail miserably when it comes to efficiency. Residential trash collection is fine, it’s pretty straightforward, but commercial trash collection is an absolute nightmare. In New York City, there are over 250 trash collection companies. All of that competition in such a small space just makes them get in the way of each other, a five block stretch of 87 businesses will have 27 different dump truck companies driving through each night. So that’s how mafia works… So privatization doesn’t really drive down costs or improve efficiency, but all of that competition must improve quality, right? Yeah, ask British Rail how that went. The story of what happened to British Rail is so astonishingly stupid that it’s a video in itself… that someone else already made. Seriously, check it out after this, it’s amazing. I just got back from Vidcon London and the public transportation there is just so... you have no idea how good you have it. I’m so jealous that I kept my Oyster Card, just so that I can put it under my pillow and dream about that ever happening in America. Seriously, if they ever try to privatize Transport for London and you guys don’t riot, or at least form an orderly queue to register a formal complaint, I would be very disappointed. Same goes for the NHS, while we’re at it. I didn’t have to use it while I was there, but I know someone who did, and their experience, even as a foreigner, was both quick and fantastic. But healthcare is another video in itself, don’t worry it’s coming. Competition, at least in the free market, is supposed to lower costs, improve efficiency, and hopefully improve quality. But governmental public services are by design, meant to lose money. We all pay into them through taxes, because we all benefit from the service, either directly or indirectly. We as a society pay for it, because we as a society benefit from it. Competition didn’t improve quality or lower costs for private prisons and certainly didn’t for public transportation. But for some reason, we all seem to think it will work for schools. What if schools had to compete for students in the same way that businesses have to compete for customers? Schools can’t grow like a business. If you have a burger joint in your town and a second burger joint opens up, overall demand for burgers increases. Both businesses will benefit from competition. But when it comes to schools, if you open a second one, you’re just cutting the student population and thus the demand, in half. Unless your business plan includes encouraging parents to have more kids, in which case you’re playing the long game. The demand for schools is relatively stable over time, you can cut costs and improve quality all you want, the student population is basically the same. The National Center for Education Statistics reports that since 1970, public school attendance in the U.S. has gone up by just five percent, while public school employment has gone up 95 percent! PragerU is correct when they say the student population has only grown by 5% in the last 50 years, because people just aren’t having that many kids anymore, the population is pretty stable. But that 95% employment increase is rather deceptive. Two-thirds of that growth was in administrative staff, so secretaries, librarians, counselors, and principals. Apparently every school needs four vice principals now for some reason. The teacher population only accounts for 37% of that growth, on average over the last 50 years, we went from 22 students per teacher to just 16. Which if you ask me, that sounds like a good trend. But ask almost anyone, and they will tell you that the public school system is broken. The system, especially for economically disadvantaged kids, is broken. I even asked you on twitter and an alarming amount of you agreed. Saying that the public school system is broken is like… supporting the troops. Every time a politician says it, everyone claps and nods along in agreement, even if their personal experience was great. But nobody seems to be able to agree on how to fix it. PragerU’s solution is privatization and introducing free market competition. In almost every state and city where there is competition today, educational outcomes improve – often dramatically. We don’t need any more money, we need more choice. Forcing more competition and faster improvement among existing public and private schools. Private schools have existed basically forever, certainly longer than any public school. And it shouldn’t surprise you, but a large number of private schools are religious in nature. Public schools in America didn’t really come about until after Reconstruction and by World War 2, just about every kid had access to public education. Because as a society, we all agreed that we all need this. And that’s essentially how it was for a decades, everyone had access to public schools, and if you had the means and you wanted to, you could send your kids to a private school. But in the mid 90s, a third option opened up: charter schools. Depending on state law, these schools can be started by parents, teachers, non-profit groups, corporations, or even government organizations. Remember this one, I have a feeling it’ll be important later. Charter schools are privately run and publicly funded, they typically use a different teaching style like Montessori or have some sort of curriculum focus like college prep, fine arts, or STEM. They didn’t really take off until No Child Left Behind was signed in 2001. Among other things, No Child Left Behind established standards that every school had to meet, and if they don’t meet those standards, bad things happen… If a school is unsuccessful in hitting its annual targets for a sixth consecutive year, a restructure plan is implemented. Common options include: Turning over district control to the state, turning the school into a charter school, or closing the school. There weren’t enough charter schools to statistically compare them to public schools until a few years after that law was signed, so all of the data I will be showing you starts in 2005. Which was still fourteen years ago… why am I so old!? Then a few other laws were passed like Race to the Top and Every Student Succeeds, and most recently the bane of all educators was introduced: Common Core… which just seems like a way to make public schools compete with one hand tied behind their back. Since depending on the state, charter schools don’t necessarily have to follow that curriculum. Charter schools are a rather contentious issue and supporters like PragerU and the Cato Institute know that, so they’ve changed the language to School Choice. According to researchers at the University of Arkansas – in the most comprehensive study done to date -- students in school choice programs saw their reading and math scores improve by 27 percent and 15 percent, respectively. Sounds like something we should get behind, doesn’t it? PragerU is rather infamous for not citing their sources, so it took some digging, but I did find it. It’s from the University of Arkansas School Choice Demonstration Project and it comes to a rather interesting conclusion. Generally, the impacts are larger for reading than for math, for programs outside the US relative to those within the US, and for publicly-funded programs relative to privately-funded programs. Wait, what?! Okay so, the data is rather difficult to sift through, but we’ll get through it together. Here it is, TOT Reading, 27% increase for areas that have school choice programs. But here we can see that they broke it down by International and United States. Internationally, school choice improves reading scores by 48%, while it only improves the United States by 2%. It’s the same story for math – yes, that says negative zero for the United States. PragerU presents this data as if school choice programs increase scores in the US, when in reality, it increases scores by this much Internationally, and only this much in the United States. Sounds like something we should get behind, doesn’t it? This study, the one that PragerU cites as proof that school choice is better, actually shows that in the United States it has basically no effect. You can check it yourself, unlike PragerU, I cite my sources. And while you’re checking, you might find out that their source wasn’t peer-reviewed or published anywhere. It’s a working paper, there’s even a disclaimer on the first page saying not to use these results without clearly stating that it is a working paper. This was fun, let’s do another one! According to a 2015 Stanford study, not only do charter schools provide significantly higher levels of growth in math and reading for all students, but minority and low income students benefit disproportionately more. The minority angle is part of PragerU’s overall school choice narrative. If you don’t support school choice, then you’re the real racist. They actually sprinkle this into every video they possibly can about politics and race. It’s no coincidence that Progressivism is the common thread that binds predominately black cities where single parent homes, failing schools, rampant poverty, and crime predominate. Opposition to school choice has kept them trapped in failing schools. However, it's unfair to hold minority parents and students hostage in underperforming public schools. It’s conservatives who push for school vouchers, which would allow all parents, not just wealthy ones, to choose their children’s school. It’s the other side that doesn’t trust minority parents to select and appropriate school for their children. This is obviously true for wealthy parents who can afford to send their children to any school they want, but it’s equally true for middle class and poor parents when they have a choice. Okay wow, this is a poor family… and this is a wealthy family? While it is technically possible, and props to PragerU for trying to look progressive, but in the reality that most of us live in, there’s a 70% chance that the family that sends their kids to a private school is white. In fact, 43% of all private schools in the country are what they call “virtually all white.” PragerU is rather famous for coloring everyone this rather neutral blue. So coloring them like this was a conscious decision. But we’re not talking about private schools right now, we’re talking about charter schools… and this claim that minority students do disproportionately better… thankfully PragerU actually cited this one. This study measures success a little differently, they tested students in charter and public schools at the beginning of the year and then at the end of the year and calculated how many days of learning they gained or lost compared to each other. They only did this in 41 urban areas, like Las Vegas and New Orleans. According to this study, yes, some minority students in charter schools did perform better on the year-end tests. Just for funsies, let’s take a look at the break down. Black students gained 36 days of learning in math, meaning that after a full school year, students in charter schools scored as if they had 36 extra days of instruction, but still within a standard school year – they’re getting more bang for their buck. They had a similar 26 days of extra learning in reading. Hispanic students had similar gains of 22 days and 6 days, while Asian students gained 9 days of math and 0 days of reading. Which is great, I’m all for extra learning, even if it doesn’t necessarily benefit everyone. White students on the other hand, lost 36 days of math and 14 days of reading, meaning that white students in charter schools do significantly worse than their public school counterparts. Just to put that into perspective, 36 days is seven weeks of lost instruction. I wonder what PragerU’s predominately white, Republican viewership would think if after this sentence… … minority and low income students benefit disproportionally more… They added that white students perform disproportionately worse. This was PragerU’s source, I didn’t have to go looking for this, they deliberately only talked about minority students in order to show that school choice works. So enough of this, no more cherry picking racial groups or comparing schools globally, let’s look at the data ourselves. The National Assessment of Educational Progress, or NAEP, is a standardized test given to 4th, 8th, and 12th graders around the country every other year. They have a handy data explorer where you can look at the results yourself. I realize that many of you may have problems with standardized tests, but we need some reliable measuring stick to compare schools and this is the best one we have. It’s also what the PragerU studies use, so it’s what I’m going to use. Here’s how you can look up the data yourself, by selecting the subject, the grade, and then searching for the charter school variable. It creates a report which you can then use to make charts. So, simple question, on average, nationwide, are charter schools outperforming public schools? PragerU would have you believe that they are. But here are the 4th, 8th, and 12th grade math scores for every year available. Here are the 4th, 8th, and 12th grade reading scores for every year available. Not once have charter schools done better than public schools, but in 2017 they finally tied in 4th grade reading. Is it reasonable to assume that eventually charter schools will surpass public schools? Probably. But when PragerU tells you that they already are – they’re lying. Not all charter schools are bad, in fact, statistically, 17% of them do better than public schools and 46% of them perform about the same. While the remaining 37% of them perform significantly worse. Just to put that into perspective, if you have a child in public school and you’re thinking of moving them to a charter, roll a die and try to predict the number. The odds of you guessing correctly are the odds of that school being better, about 1 in 6. Overall, nationwide, charter schools just aren’t performing as well as public schools. Can you focus in on certain groups or states to make the data say whatever you want? Sure, in fact let’s do that. Here’s 8th grade math in DC and Michigan… and here are the reading scores. What the heck is going on in Michigan? Well, remember when I told you to remember this? Depending on state law, these schools can be started by parents, teachers, non-profit groups, corporations, or even government organizations. DC does not allow for-profit charter schools. Michigan on the other hand does, in fact 80% of them are corporately-owned and run for-profit. Michigan is also the state Betsy DeVos is from. So when our current Secretary of Education pushes for school choice she’s pushing for the country to emulate the system she spearheaded in Michigan. She even wants to take it a step further. Currently, nationwide, we spend about $10,000 per student per year in public schools, charter schools get about $7000, and private schools have to charge tuition. Betsy DeVos wants to change that with School Choice Vouchers, or SCVs…SCV Ready! No one actually abbreviates it I just wanted to force that joke in. A school choice voucher would take that $10,000 of taxpayer money and attach it to the student, to go wherever they want. The money follows the student. Every child receives funding that their parents can direct to the school of their choice – public, private, charter or even homeschool. Okay, we’re so not going to talk about homeschool. But private schools have been getting along just fine with their tuition for centuries, they don’t need taxpayer money. This just seems to be a way to make rich schools richer and poor schools poorer. Poorer? Is that a word? I dunno, I went to public school. There are also huge first amendment issues with taxpayer funds going towards a religious private school… but let’s not get into that. Teachers unions and other public school activists argue that charter schools take money away from traditional public schools. Because they do. Since charter schools can’t grow the demand for schools, this just means that both schools get less funding. And when you add profit into the mix, things get even messier. A for-profit charter school will get $7000 per student, they might only spend $6000 of that and then pocket the rest. As you might have guessed, this system is ripe for abuse. In fact, John Oliver did a segment a few years ago talking about several of these abuse cases, where charter schools lied about attendance or even their physical location to scam taxpayers. There are about 90,000 public schools in the United States and only 7000 charter schools, for every three charter schools that open in a year, two close. Whether for financial mismanagement, or low enrollment, or low test scores. You might think this is just the free market at work, but this isn’t a burger joint, if you have a bad burger, oh well, you’ll have another meal in a few hours, you’ll get over it. But if you have a bad year in school, you’re behind… maybe forever. Now, it’s not fair to only focus on the failures of school choice. Even though they outnumber the successes two to one. So if you’d like to see the other side of this argument, head on over to curiositystream.com/knowingbetter. CuriosityStream is a subscription streaming service that offers over 2000 documentaries and nonfiction titles from some of the world’s best filmmakers that you can access across multiple platforms. I specifically recommend the series School Inc, which presents the pro school choice argument in perhaps the most honest way I’ve seen yet. Networks of charter schools in Louisiana are actually performing slightly worse than independent charters. He even cites a study that you are now quite familiar with and can look up yourself. According to the researchers at Stanford, charter schools in Louisiana are outperforming traditional public schools, and that’s particularly noticeable in New Orleans. The difference isn’t enormous, but it’s good news. You can get access to their entire library for as little as 2.99 a month, but if you head over to curiositystream.com/knowingbetter and use the promo code knowingbetter, you get your first month completely free, you’ll also be supporting the channel when you do. Privatizing public services has rarely ever worked out for the taxpayer, we’ve looked at prisons, infrastructure, emergency services, and now schools, and the story is the same every time. But every time, we seem to think this will be the one where it works. You can only benefit from competition when you’re able to increase demand, which you’re not able to do for schools and I would hope you wouldn’t want to do for prisons. Though they seemed to find a way. So the next time a politician tells you that this time it’ll work, I promise, hopefully now, you’ll know better. I’d like to give a shout out to my newest legendary patron, Daniel. If you’d like to add your name to this list of for-profit entrepreneurs, head on over to patreon.com/knowingbetter. Don’t forget to privatize that subscribe button, follow me on Twitter and Facebook, and join us on the subreddit
Info
Channel: Knowing Better
Views: 447,689
Rating: 4.7837887 out of 5
Keywords: knowing better, politics, government, united states, america, privatization, public services, corrections, prison, private prison, immigration, toll road, toll bridge, emergency services, private defense contractors, public school, charter school, private school, school choice, voucher, prageru, mandatory minimum, three strikes laws, test scores, teachers, students, prisoners, efficiency, quality, innovation, betsy devos, run like a business, competition, education, prison reform, free market
Id: 3HF8iR_GB8A
Channel Id: undefined
Length: 25min 4sec (1504 seconds)
Published: Sun Mar 03 2019
Reddit Comments

Guys, Knowing Better shouting out Shaun and dunking on PragerU is huge. Don't cancel him, I'm pumped that he can be a gateway into breadtube topics and channels.

👍︎︎ 34 👤︎︎ u/crispy_lol 📅︎︎ Mar 04 2019 🗫︎ replies

What's strange about American Charter Schools is that, if you look at the academic analysis around the world every form of selective education outperforms the public standard. It doesn't matter if the selection is based on religion, language, academics, or anything, the selective school performs better.

Except these Charter Schools.

That's not to say these are a good thing. They appear to do better by making the system *overall worse (primarily from diverting funding), if you google the data for English counties that still run the Grammar School system you can see how bad the overall picture gets.

The sad part is we have empirical examples of how to make education perform well. Just do what the Northern European countries do, make universal public education the norm (and even if that means banning private schools like Sweden and Finland do) to the extent that almost everyone is attending regular public school.

Its galling that when we have the evidence, its very, very clear, there's still this debate. Because its not a good faith debate. Its dishonest to make these claims and its entirely driven by taking money corruptly.

👍︎︎ 18 👤︎︎ u/LowlanDair 📅︎︎ Mar 03 2019 🗫︎ replies
👍︎︎ 7 👤︎︎ u/FalseAgent 📅︎︎ Mar 03 2019 🗫︎ replies

is 'Knowing Better' really a bread tuber, he seems too centrist

👍︎︎ 58 👤︎︎ u/RGBeta 📅︎︎ Mar 03 2019 🗫︎ replies
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