Opinion - Politics

Chicago teachers strike highlights America's top 3 economic threats

Key Points
  • The Chicago teachers strike that began earlier this week comes pretty darn close to encapsulating all of America's most daunting economic challenges.
  • Two of those economic challenges connected to the strike are easy to point out.
  • But the third threat is a bit harder to see. It has to do with the cost of childcare and how that misdirects our educational priorities.
Chicago Teachers Union President Jesse Sharkey cheers during a rally on the first day of a teacher strike in Chicago, Illinois, October 17, 2019.
John Gress | Reuters

The Chicago teachers strike that began earlier this week comes pretty darn close to encapsulating all of America's most daunting economic challenges.

Two of those economic challenges connected to the strike are easy to point out. First, the nationwide financial crisis facing city after city because of unsustainable public employee costs is nothing short of an economic ticking time bomb. Cities like Chicago are already facing massive budget crises and a pension bill they simply will not be able to pay.

New Chicago Mayor Lori Lightfoot is vowing to stand firm against the costly demands from the teachers union. But if history serves as any guide Lightfoot will cave eventually. In so doing, Lightfoot will join an endless list of elected leaders who give away taxpayer money in a way no private citizen would with their own cash or corporate boss would do with company funds.

Even the father of the New Deal knew the economic dangers of allowing public workers to unionize. President Franklin Roosevelt blocked federal workers from unionizing in the 1930s and his guidance kept that ban in place until President John F. Kennedy greenlit the move in 1962.

The second obvious national problem the Chicago teachers strike shines a light on is the fact that the cost of higher education is becoming less justified for more and more liberal arts graduates. Teachers' salaries aren't even close to keeping up with the inflation in tuition costs for the bachelor's and/or master's degrees needed to get public school teaching certifications. The average college graduate is now burdened with a higher-than-ever student loan debt of $29,200. It's likely that many of those striking Chicago teachers simply need to make more money to pay off those debts.

But the third threat is a bit harder to see. It has to do with the cost of childcare and how that misdirects our educational priorities.

Microsoft founder Bill Gates is among business leaders calling out the poor overall quality of U.S. public education.

So what are we getting for that $694.1 billion in public school spending, ($12,201 per student), every year in America?

Education's ugly secret

The ugly secret in many cases is that we're just getting a very expensive and glorified system of childcare. It may not do much more than keep our kids relatively safe and occupied, but it's the closest thing we have to the national childcare or daycare program we need to keep much of the economy afloat.

Even with all that public school spending, the average cost of childcare for each child in the U.S. is nearing $10,000 per year. The lack of sufficient and affordable options leaves millions of American parents with the tough choice of either having to pay for expensive childcare or risk losing out to the steep financial and opportunity cost of leaving the workforce.

It's impossible to accurately measure how many more millions of Americans would be working and how many more billions of dollars we could pump into the GDP if the childcare conundrum could be solved. Perhaps, because the problem is typically categorized as a "women's issue," and not more accurately as a universal economic threat, it doesn't get the attention it deserves on Wall Street.

There has been some help on this front from Washington, as the Trump administration policy of doubling the childcare tax credit went into effect last year. But most experts agree the private sector will need to step up much more to make a dent in this problem. That likely means more special work arrangements for parents and/or providing childcare facilities right at the workplace itself.

For now, the unions and the city of Chicago have agreed to keep school buildings open for kids who have no other place to go. But the crucial school bus services to get kids to and from those buildings is suspended, and keeping the schools physically open also contributes to the overall cost of the walkout.

The simple fact is the economic pressure for having somewhere to send kids so their parents can work is so high that the quality of the care and education at those places is obviously a much lower priority. It's understandable that the short run concern in Chicago is finding a place for kids to go. But the long term economic threat is greater because of the fact that the education is inadequate.

Many of us would like to say that Chicago's teachers and all of our teachers deserve more pay and benefits. But America's top employers continue to tell us that whatever is being taught is far from sufficient. We need to get something more than glorified daycare for that $694 billion we spend on education every year. Perhaps this strike in Chicago will get more of us thinking of a better alternative.

Jake Novak is a political and economic analyst at Jake Novak News and former CNBC TV producer. You can follow him on Twitter @jakejakeny.