When one of the largest public school systems in the country is considering privatizing the schools, this is big. Concerns about privatizing schools run the gamut — some worry that corporate profit will take precedence over student needs and quality curricula; some teachers worry that their salaries will be threatened and seniority will become a liability; some parents worry that they will not have the input (however limited it might seem at times) that they have now in electing committees and boards to oversee our educational systems.

One question I have after reading the article is how the private companies would get teachers. Would they be required to use the city’s current teachers, or would they be free to hire other teachers? The President of the city’s teacher’s union sounds like she is being largely kept out of the loop. From the article:

Randi Weingarten, the teachers’ union president, urged the administration to make its discussions more public. “I have been concerned about the sub rosa debate on whether to privatize the management of the school system for quite a while,� she said. “On an issue that is this transcendent there has to be a real public debate.�

One of the most hotly debated questions is whether the city would hire profit-making companies like Edison Schools Inc., which manages more than 20 schools in Philadelphia and has expressed interest in bidding on a city contract.

In 2001, an effort by Chancellor Harold O. Levy to hire Edison to run five failing schools collapsed after educators complained and furious parents voted it down.

Such opposition, to even the nonprofit groups, is likely to rise again. “Can you imagine these people picking what they want to do in instruction?� said a veteran education official who asked not to be identified, fearing retribution for not supporting the chancellor’s agenda. “They don’t know what they are doing.�

The educator added: “This is a way to crush public education. This is not a way to improve a school system.�

Within the department, one question is how big a role private groups should have in running public schools. “We are not abdicating any of our responsibility, but what we are doing is sharing some of that management responsibility,� said Garth Harries, the chief executive of the department’s Office of New Schools. “What we are trying to accomplish is greater accountability for partners that are involved in the schools over time and an alignment of management.� [full text]

There appears to be little evidence that for-profit corporations such as Edison Schools, Inc., are able to do better than public schools. An article by Barbara Miner details why, as does this Question and Answer page at PBS’s Frontline. Barbara Miner’s article makes some excellent points:

THE PRIVATIZATION CALCULUS

Edison faces its biggest test in Philadelphia, where it hopes to get a multimillion-dollar contract to run as many as 45 schools. In the short term, such a contract would keep enough cash flowing in to satisfy investors and keep stock prices from plummeting. (Edison went public in November 1999 at a starting price of about $18 a share. At the beginning of 2002, its stock was basically flat, selling between $17 and $19 a share.)

Even if it gets what it wants out of Philadelphia, in the long run the problems facing Edison are the same that forced Tesseract/EAI into bankruptcy. Despite perceptions, there is little “fat” in urban public school budgets. Nor are there any “silver bullets” that will magically improve schools.

Because education is a labor-intensive industry, there are only two ways to make money: cut wages or cut services. (A variation on “cut wages” is hiring younger, lower-paid staff. A variation on “cut services” is controlling student admissions so that more-difficult-to-educate students are discouraged from applying. ) Like Tesseract, Edison has been plagued by charges that it saves money by hiring less-experienced teachers and that it does not adequately serve special education students.

And when Edison announced this fall that its plan for Philadelphia included cutting the costs of support staff, it was following a pattern established by EAI. When EAI went into its first multi-school contract in Baltimore in 1992, one of the first things it did was replace $10-an-hour, unionized paraprofessional workers with $7-an-hour “interns” who did not receive benefits.

That doesn’t mean, however, that some people didn’t make a lot of money off of EAI. Likewise, some people are in line to make millions off of Edison.

EAI founder and CEO Golle, ever the shrewd business operator, knew when to make his move. In the fall of 1993, over a two-month period when EAI’s stock was riding high, Golle took advantage of stock options to make a net gain of approximately $1.75 million on sales of 50,000 shares of EAI common stock.

Edison founder Chris Whittle may also have been smart enough to get some of his money out while the getting was good. On one day last March, some 650,000 shares held indirectly by Whittle were sold for more than $15 million. According to a proxy statement filed this fall, Whittle still owns 3.7 million shares of Edison’s publicly-traded stock, and he and his associates have options on an additional 4.4 million shares.

More important than Golle and Whittle are investors who continue to be optimistic about their ability to extract enormous profits from the under-funded public schools. The for-profit education privatization movement is not likely to go away just because the companies are not yet making profits. A lot of people with a lot of money are in this for the long run.

As the New York Times article indicates, some private education companies are turning down the idea of bidding on this contract. At least they are not blithely taking the money. They apparently have enough experience to recognize that the prospect of coming in and improving New York City’s education system is a dubious and frightening one.