In this episode, Susan Pendergrass is joined by Steven F. Wilson, senior fellow at the Pioneer Institute for Public Policy Research and author of The Lost Decade: Returning to the Fight for Better Schools in America, to discuss the rise and decline of the “no excuses” charter school movement.

They examine how once high-performing urban charter networks lost their focus on academic achievement, why ideological shifts around DEI and anti-racism took root, and what it will take to re-center public education around effective instruction. Wilson also explains the importance of urgency in school leadership, the evidence behind student outcomes, and more.

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Transcript: The Lost Decade – Steven F. Wilson with Susan Pendergrass

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(00:00) Introduction and background

Susan Pendergrass: Well, Steven Wilson, thank you so much for coming onto the podcast. We were just speaking before we started recording about how long you and I have been kind of working in the—you completely in the charter space and me somewhat adjacently in the charter school space—and have just seen things change and evolve over time in ways that… some are great and some are less great.

You have a new book out, The Lost Decade: Return to the Fight for Better Schools in America, which is fantastic. You know, 20 years ago, I thought charter schools were going to be part of the answer—to competitively spur non-charter schools to do better and to give parents options and lifeboats in some of our worst urban districts. There were so many high-flying charter school networks emerging, like KIPP—the Knowledge is Power Program—that were like, “Look, it’s not the kids.”

These kids can do as much as any kids—even if they’re poor, even if they are in an urban district, even if their mom is single and has two jobs. We’re not going to give them excuses. We’re going to have high expectations and we’re going to instill discipline. And they started this whole “no excuses” thing. And I thought that was such a great thing for kids. Then… I don’t know. Please, you tell me. I’m sure you know more than I do.

(01:10) The shift away from academic excellence

Steven F. Wilson: Well, first of all, Susan, I’m delighted to be with you—and I’m even more delighted that you’ve read the book. That’s thrilling.

Yes, I think your introduction really nails it. We had found a once-in-a-century educational intervention that had extraordinary effects: the so-called “no excuses” school. (Terrible name, by the way—maybe we should clarify that for listeners.) Around 2000, or in the few years leading up to that, urban charter networks were posting extraordinary effects. They were beginning to show a way out of educational inequality in this country—and then they lost the thread.

They turned away from the North Star of achievement—of great instruction—which is what drove them and their success. And they began to embrace another ideology, another purpose, that I think has been quite destructive. That’s the theme of the book. I refer to it as anti-racist education or social justice education.

Look, we all thought we were doing social justice, right? We thought we were doing anti-racism. We thought that by providing an instructionally effective path—where children could enter the middle class and not be consigned to a life of the minimum wage—we were addressing inequality in America. But we’ve unfortunately turned away from that.

I called the book The Lost Decade because we are now exactly halfway through it. We need to make a sharp pivot back to what was working. My book is really a call to action—a call to return to what works, and pick up where we left off.

(03:47) Mislabeling structure as racism

Susan Pendergrass: So when you say the anti-racist movement, I think what I remember hearing is… making kids stand in line is racist?

Steven F. Wilson: Yeah, that’s right. So a whole lot of things were labeled racist when, in fact, they were just creating the conditions under which children could be safe, respected, and have an opportunity to learn—conditions where teachers could teach.

People forget what the urban classroom looked like 30 years ago when all this began. There’s a book called Let the Lady Teach by Emily Socker. She was an education journalist who taught for a year and took stunning photos. You see New York City classrooms with graffiti-covered walls, broken desks—a scene of abject neglect and contempt for students.

The founders of the no-excuses schools did two things. First, they established order. Children needed to feel safe from gangs, violence, and low-level disorder. The balled-up paper no one picks up, the broken pencil, the kids talking over the teacher—all that had to stop. That was the foundation for joyful, effective learning environments.

Second, they adopted the pledge of no excuses. As professionals, we agreed to stop blaming poverty, racism, or lack of resources for why students weren’t learning. Those challenges are real—but we cannot let them prevent us from doing our job: educating children. That was an ennobling cultural decision—and it drove the successes that followed.

(06:38) School uniforms and equality

Susan Pendergrass: I also remember how those high-performing charter networks were some of the first public schools to require uniforms. At the time, people said, “You can’t make low-income students wear belts,” and yet… they did. Schools helped them. They found a way.

Steven F. Wilson: Exactly. Uniforms did a couple of things: they created a sense of order and purpose and they eliminated status anxiety about clothes or sneakers. They created a level playing field where all kids could feel safe and focused.

(07:54) Why charter schools changed

Susan Pendergrass: So why did things change around 2005 or so? Why were charter schools so susceptible to this shift?

Steven F. Wilson: Good question. My view—and it can be contested—is that charter schools were uniquely susceptible because of their reliance on young, novice teachers, and because they experienced higher staff turnover than traditional districts. So you had more new teachers arriving, often from elite universities. These teachers had been acculturated in anti-racist ideology and brought it with them.

With 20 to 25 percent staff attrition over four years, you can essentially have a whole new faculty. These new teachers weren’t part of the early TFA generation who felt called to close the achievement gap. Instead, they came in animated by the ideas of Ibram Kendi, Robin DiAngelo, and more radical voices like Tema Okun—who claimed that objectivity and love of the written word were traits of white supremacy.

So teachers began to question whether enforcing discipline or holding students to high standards was racist. Some networks—like Success Academy and Brooke Charter Schools—held their ground. Others capitulated. They didn’t make the case for their methods or explain how they aligned with a true liberal arts education.

(11:35) Parental demand and satisfaction

Susan Pendergrass: And these were the very things that parents wanted, right? The structure, the discipline?

Steven F. Wilson: Absolutely. These schools conducted annual parent surveys—Ascend, KIPP, Achievement First. Satisfaction rates were consistently above 90%. I’ve never heard of a parent asking for more anti-racist programming. What they wanted was a better education and a secure path to college and career. That path has eroded horribly over the past five years.

(14:52) Test score declines

Susan Pendergrass: So what were the actual outcomes of the shift?

Steven F. Wilson: In New York City—the nation’s largest market—urban no-excuses charters used to dramatically outperform traditional schools on state tests. That performance premium eroded by two-thirds over five years. Now, many of them perform just slightly better than the city average. But the networks that stuck with their methods—Success Academy and Classical Charter Schools—have either maintained or improved their results.

(16:29) Can “anti-racist” schools succeed academically?

Susan Pendergrass: And you couldn’t find any high-achieving schools that had adopted the anti-racist framework?

Steven F. Wilson: I looked, and no—I couldn’t find any.

(17:24) What should we do now?

Susan Pendergrass: So what now? How do we turn this around?

Steven F. Wilson: We need to have honest conversations—conversations that have been avoided for too long. And then we need to win the contest of ideas. The no-excuses model works. RAND found that students who attend KIPP middle and high schools have nearly the same college completion rates as white students nationwide. That’s an astonishing result.

There’s growing recognition that the ideological shift hasn’t worked—but fear still dominates. I think that will change within the next year.

(19:47) DEI and illiberalism on both sides

Susan Pendergrass: Meanwhile, terms like “equity” and “DEI” have been politicized. What’s your take on that?

Steven F. Wilson: I support DEI—when it’s done right. Diversity, equity, and inclusion should foster a sense of belonging. What doesn’t work is dividing people into affinity groups or pushing a worldview of oppressors versus oppressed. That’s deeply harmful.

And the answer isn’t to fight illiberalism with more illiberalism—banning concepts, censoring teachers. That’s not how we solve the problem.

(22:24) Accountability, data, and racism claims

Susan Pendergrass: In Missouri, we’ve got very low accountability. Our state system gives almost every district an “A.” When we created our own school grading system, we were told assigning D’s and F’s is racist—because those schools mostly serve Black and Brown students. But parents know when their child’s school is bad. They want a way out.

Steven F. Wilson: Right. The claim that it’s racist to report poor outcomes is a distraction—usually from the teachers’ unions or anti-reformers. They say schools are just reproducing structural poverty and racism. Horace Mann would roll over in his grave.

We need competition. In many communities, the majority school systems are unreformable. The faster path to success is to build new schools around them.

(26:05) Urgency and action

Susan Pendergrass: I hear “fix the schools we have” all the time. But people have been trying that for decades. If your house is on fire, don’t just stand there—build something next door.

Steven F. Wilson: Exactly. People cling to the existing system out of habit or emotion. But it isn’t working. And as you said, we need urgency. That’s another value some now call “racist.” But if your kid is in a broken classroom, you feel that urgency.

High-performing charter schools acted on it. They made staffing changes midyear. They reopened quickly during COVID. They didn’t let failure sit.

(28:22) Conclusion

Susan Pendergrass: Yes, and that urgency made a difference. Our unaccredited districts have been that way for so long a child could attend from kindergarten to 12th grade without any improvement.

The Lost Decade: Returning to the Fight for Better Schools in America couldn’t be more timely. Steven, thank you so much for coming on.

Steven F. Wilson: Such a pleasure, Susan. Great to see you.

Susan Pendergrass: Same. Thank you.

Produced by Show-Me Opportunity

The post The Lost Decade of Education Reform with Steven F. Wilson appeared first on Show-Me Institute.

That means employers and potential employees should be free to negotiate, agree, or disagree on compensation, and then employ or refuse employment. Of course, I am also for an economy that offers good jobs at high wages; the best and in fact only path to that is economic growth that increases the demand for labor, coupled with an educational system that teaches and trains people so that they can pursue the career of their choice.

In other words, freedom and good government produce more opportunity for everybody. Who could have known that?

Proposition A, which was passed by the voters in November 2024, increased the minimum wage, but it did more than that. It also instituted a complex sick-leave policy for most businesses in Missouri. Many of those same businesses already had more generous leave policies of various types than the one mandated by the new law, but even those businesses were forced by Proposition A to adjust their policies to the new formula. In some cases, those adjustments were going to be less generous to employees in order to adhere to the new requirements.

This is a perfect example of how a law can appear to do one thing—in this case, help employees—while actually doing the opposite—in this case, heaping transaction costs on business, and especially small business, and thereby discouraging those businesses from hiring employees and growing their companies in Missouri.

It’s not the fault of voters that they did not know what the effect of the law would be. Proposition A contained nine pages of detail that even lawyers have difficulty understanding.

The supporters of Proposition A made it a statutory proposition instead of a constitutional amendment because a statutory proposition is easier to get on the ballot. Because Proposition A was only a statutory change, it was within the authority of the legislature to adjust it, and fortunately the legislature has done so by eliminating the onerous sick leave provisions, moderating the minimum wage provisions, and vastly simplifying the burden on small business.

But this whole episode shows why we need initiative petition reforms in Missouri. It is too easy for interest groups to raise large sums of money so that they can mislead voters about complex initiative propositions that are deliberately written to hide their true purpose and likely effects. Even a good ballot summary can’t accurately convey the meaning of nine pages of inscrutable legal jargon.

We’re all for the people deciding the direction of their own government; in fact, we participate every day in the marketplace of ideas with a view to influencing Missourians on behalf of good policy. The initiative petition process is an important tool, but it should be designed so that voters, with a reasonable effort, can be aware of exactly what they are voting on and the choices they are being asked to make.

The post The Missouri Legislature Was Right To Overturn Proposition A appeared first on Show-Me Institute.

Take Missouri’s 2018 decision to remove the 174-day minimum school year requirement. The goal was to give school districts greater flexibility in structuring their academic calendars. It worked. By 2023, nearly one third of Missouri districts had adopted four-day school weeks. The policy also had an unintended consequence—students now spend significantly less time in school.

While schools are still required to meet the minimum 1,044-hour requirement, Institute research shows that the average Missouri student is going to school 17 to 29 fewer hours per year than before. Over the course of an entire K–12 education, this equates to losing nearly a quarter of a school year.

This phenomenon is not unique to education policy. Unintended consequences abound in economic and social policies.

• Raising the Minimum Wage: The intention is to help low-income workers earn a living wage. In practice, however, higher labor costs often lead businesses to cut jobs, reduce hours, or replace workers with automation—hurting the very people the policy was meant to help.
• Housing and Zoning Regulations: Efforts to control urban development often result in reduced housing supply, making homes and apartments more expensive. In places with strict zoning laws, such as California and New York, these regulations have contributed to skyrocketing housing costs and homelessness crises.
• Corporate Tax Increases: Policymakers impose higher taxes on corporations to generate more government revenue, but companies respond by moving operations overseas, reducing investment, or passing costs onto consumers.

Public policies are often crafted with the best intentions, yet they reshape human behavior in unpredictable ways. When policymakers overlook economic incentives and fail to anticipate secondary effects, the result is often worse than the problem they set out to fix.

As Missouri’s school calendar experiment shows, flexibility in education policy may be valuable, but policymakers must exercise caution. Legislators should weigh not just the direct outcomes of a policy but also the unintended consequences that ripple through society.

The post Unintended Consequences: When Well-Meaning Policies Backfire appeared first on Show-Me Institute.

Regarding the courts, a coalition of Missouri business groups, including the Missouri Chamber of Commerce, has filed a lawsuit challenging Proposition A.

The plaintiffs argue that combining wage increases with sick leave provisions violates the state constitution’s single-subject rule for ballot initiatives. Proposition A, which passed with 58% of the vote, would incrementally increase the minimum wage from $12.30 to $15 by 2026 and provide workers up to seven paid sick days annually starting in May 2025. Supporters contend that wages and benefits are integral to overall compensation and thus constitute a single subject. The Missouri Supreme Court has yet to schedule hearings for the case.

As for the legislature, because the proposition was a statute, the legislature may act to overturn it. One Missouri legislator introduced the Entrepreneur Rights Act, which would exempt some small and seasonal businesses from minimum wage increases.

Supporters may point to California’s recent mandate elevating the minimum wage for fast-food workers to $20 per hour as a triumph for labor rights. However, a closer examination reveals that the anticipated benefits, particularly in job creation, have not materialized. A study from the University of California, Berkeley, initially suggested that the wage hike did not adversely affect employment levels. Yet, upon scrutinizing the data, it becomes evident that fast-food employment in California has grown at a slower pace compared to the national average. In fact, since the law’s implementation, California’s fast-food employment increased by only 1.85%, while the national rate rose by 3.22%. This discrepancy indicates that the wage increase may have hindered job growth within the state. Such outcomes underscore the complexities of implementing blanket wage policies without fully accounting for market dynamics and the potential unintended consequences on employment opportunities.

Show-Me analysts have consistently been critical of the arguments for, and the claimed benefits of, increases in the minimum wage. Minimum wage hikes just don’t deliver on their promises—even if academic studies twist themselves into knots trying to demonstrate otherwise.

The post No, California’s Minimum Wage Hike Did Not Create Jobs appeared first on Show-Me Institute.

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As free-market economists have long explained, raising the minimum wage prices the most vulnerable workers out of a job. It can lead to reduced hours, less full-time work, layoffs, and increased prices for consumers. There is nothing moral about advocating for policies that produce these results.

A new survey from the Employment Policies Institute (EPI) highlights the negative impacts of California’s recent increase in the minimum wage. California passed a law that raised the minimum wage for most fast food restaurants to $20 an hour beginning April 1, 2024. EPI surveyed 182 restaurant operators to assess the effect of the increase in wages.

Here are some of the key findings of the report:

• A majority of restaurants say they have already raised menu prices (98%), reduced employee hours (89%), have limited employee shift pick-up or overtime opportunities, (73%) and reduced staff or consolidated positions (70%).
• Many (75%) say the number of employees will decrease (somewhat decrease, 50%; significantly decrease, 25%).
• Nearly all (99%) say prices will increase, with 73 percent saying they will “significantly increase.”
• A majority (74%) say there is an increase in the likelihood of shutting their restaurants down (somewhat increase, 38%; significantly increase, 36%).

Fast food jobs are entry-level jobs. They are well suited for individuals entering the job market for the first time or individuals who struggle to gain employment elsewhere. As such, they are a stepping stone to further career advancement. I say this as someone who began his career working minimum wage fast food jobs. Raising the minimum wage may help some workers earn more per hour, but it also leads to fewer job openings, diminished hours, and fewer opportunities for less skilled workers.

The post The Moral High Ground and the Minimum Wage appeared first on Show-Me Institute.

In recent years, several studies have also suggested a positive correlation between an increase in the minimum wage and property crime (such as burglary, larceny, and auto theft) committed by young adults, who are disproportionately impacted by an increase in the minimum wage. But why would a minimum wage increase lead to an increase in property crime?

The hypothesis is that when minimum wages increase, low-income and low-skilled workers experience a reduction in hours worked or increased unemployment, which often means a loss of income. The authors conclude that this decrease in earnings, reduction in hours worked, and increase in unemployment contribute to increases in property crime rates.

The effects of raising the minimum wage are particularly felt by workers who are younger, have a lower income, and are less skilled. The Journal of Economics study finds:

. . . using data from the 1998–2016 Uniform Crime Reports, we find that a 10 percent increase in the minimum wage led to increases in property crime arrests for those between the ages of 16-to-24 of approximately 2 to 3 percent.

Intuitively, this makes sense—losing your job or losing hours at your job could increase economic desperation, leading people to commit property crimes such as theft. In addition, jobs help give people structure and keep them on the right track. The Journal of Public Economics study mentions that more labor market opportunities for younger workers reduce criminal behavior because it increases the opportunity cost of crime. If you have a job, you have more to lose if you get caught committing a crime.

What does this all mean for Missourians? Raising the minimum wage can not only lead to fewer hours and jobs, but also more crime. To actually benefit low-income and low-skilled workers, shouldn’t we instead pursue policies that foster an environment enabling businesses to create more jobs, such as tax cuts or eliminating unnecessary occupational licensing?

The post Does the Minimum Wage Impact Crime Rates? appeared first on Show-Me Institute.

Similar to Missouri’s potential $15.00 minimum wage, Seattle’s minimum wage ordinance passed in 2014 phased in an increasing minimum wage in the City of Seattle from the state’s $9.47 minimum to $11 in 2014, $13 in 2016, and $15 in 2017. A 2017 study at the University of Washington found that the increase to $15 an hour resulted in low-skilled workers experiencing a reduction in hours worked or even job loss. This decrease in hours worked for low-skilled workers resulted in “a net loss of $74 per month.” A pay cut of $74 per month can have a significant impact on low-income workers. The study found that employers opted to replace low-skilled workers with higher-skilled workers who could perform the job more effectively and therefore warrant a wage equivalent to the new minimum wage.

Seattle’s experiences are just one example of how a minimum wage increase negatively affects low-income workers. California recently increased its minimum wage to $20 for fast-food workers, resulting in many workers suffering from a loss of income. Mark Harmsworth, director of the Small Business Center at the Washington Policy Center, said:

Sometimes, instead of a salary bump, many workers instead find their work hours cut or their jobs eliminated completely. For some employees, if they fall below a minimum hour threshold required for benefits, they lose benefits too.

Increasing the minimum wage is a misguided way to try and help workers. If policymakers and voters want to assist low-income workers, then increasing the Earned Income Tax Credit would be a better approach.

The post A Closer Look at the Effects of a $15 Minimum Wage for Missouri appeared first on Show-Me Institute.

In this episode, Susan Pendergrass speaks with Ryan Bourne, the R. Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute and editor of the book The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy. They discuss the effects of price controls, recent interventions in the economy, how to remind people about free market principals, and more.

Ryan Bourne occupies the R. Evan Scharf Chair for the Public Understanding of Economics at Cato and is the author of the recent books Economics In One Virus, and The War on Prices. He has written on numerous economic issues, including fiscal policy, inequality, minimum wages, infrastructure spending, the cost of living and rent control.

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I think of that again because a new report by the American Enterprise Institute’s Scott Winship, “Understanding Trends in Worker Pay over the Past 50 Years,” addresses the fallacy of that chart and the broader claim that productivity and wages have not grown apace. Contrary to claims from some on both the political left and right, who argue that pay has stagnated despite economic growth, Winship presents evidence that overall compensation has grown in line with productivity when correctly measured.

The analysis begins by correcting misconceptions about wage stagnation. Winship shows that median worker pay, though not rising as dramatically as some top earners, has increased significantly when considering total compensation rather than just hourly wages.

Winship also addresses the discrepancy in pay growth between different groups. He notes that women’s pay has increased more rapidly than men’s over the past several decades.

Winship suggests that instead of accepting a gloomy narrative of failing capitalism or deteriorating worker conditions, policymakers should focus on boosting productivity and enhancing skills among middle- and working-class Americans.

The report paints a more optimistic picture of American workers’ pay trends relative to productivity over the past fifty years. While there are opportunities to enact policies that could improve workers’ economic mobility, they must be built on the solid understanding of wages that Winship advances.

The post New AEI Report Challenges Gloomy Views of Worker Pay appeared first on Show-Me Institute.

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Over the past few years, Missourians have gotten a better understanding of the term “shortage.” Whether it was soup or toilet paper, we can all remember those empty shelves at the grocery store at the beginning of the COVID-19 pandemic. Maybe that’s why the term “teacher shortage” has many policymakers on edge these days. There’s just one problem: in education, the term “shortage” doesn’t mean what you think it means.

Take the “shortage” of elementary school teachers in Missouri for example. In 2021, the Springfield School District wanted to hire 55 elementary school teachers. They received 2,155 applications from individuals with the appropriate certification. Yet, for one reason or another, they left six positions vacant. This is a teacher shortage.

The problem is the misleading way in which the Missouri Department of Elementary and Secondary Education presents the data. In the “Teacher Shortage Report for Missouri,” released in December 2022, DESE defines shortage areas as “those content areas within the state for which positions were filled with inappropriately certified teachers(s) or left vacant due to the absence of certified candidates.”

This is possibly the broadest definition of what it means to have a shortage. If a school district hires a private school teacher with 10 years of experience and a bachelor’s degree in elementary education? Shortage. They hire an individual with an MBA to teach high school business, but he does not have certification? Shortage. Let’s say they hire someone with a high school mathematics certification to teach elementary or middle school mathematics. Shortage. Keep in mind, the state has dozens of teacher certification areas, and being certified in one does not qualify you to teach another. With this broad definition, DESE suggests Missouri was short 532 elementary school teachers (Grades 1–6) in 2022, making this the highest shortage area.

Let’s put that into perspective using raw, unweighted data provided by request from DESE. In 2022, there were 2,015 job openings for elementary school teaching positions. Districts received over 21,000 applications, more than 18,000 of which had the appropriate certification. Of course, teachers may apply for more than one job.  In all, 32 elementary positions were left vacant. Thirteen of those vacancies were in the Riverview Gardens School District alone.

There is a teacher shortage—it’s just not as widespread as most believe. In total, across all certification areas, Missouri had 258 positions left vacant in 2022. These vacancies were spread across 74 of the state’s 550+ school districts, but nearly half of all vacancies were in just five school districts: Hickman Mills (17), Kansas City (17), St. Louis Special School District (19), Hazelwood (27), and Riverview Gardens (47).

Aside from the Special School District, which is a unique district that serves special-needs students in St. Louis County, the other four districts have a lot in common. They tend to serve students who come from low-income families who are black. For example, more than 97 percent of Riverview Gardens students are black.

The shortage narrative has been used to push for an increase to the starting teacher salary in Missouri. According to data obtained from the Missouri State Teachers Association, the average starting salary in these four districts is $40,075. That is well above the current state minimum of $25,000 and even above the proposed minimum of $38,000 that is currently before the Missouri legislature. Estimates suggest this increase would cost the state $21 million.

Such an increase could actually exacerbate the problems facing high-poverty, majority-minority school districts. If all the districts that currently pay less are forced to offer higher wages, Riverview Gardens, Hickman Mills, and other districts that struggle with teacher recruitment will lose the competitive advantage of higher salaries. Imagine: the state could spend $21 million and fail to even address the real shortage problem in Missouri’s most disadvantaged school districts.

Missouri’s teacher shortage is not equally felt throughout the state; it is most pronounced in high-poverty, majority-minority school districts. Accordingly, strategies to address the shortage should provide targeted support for the affected districts. This could include salary supplements for teachers in hard-to-staff schools, or it could mean intense marketing, recruitment, and human-resource support for these schools. An across-the-board increase in minimum teacher salary is not what Missouri needs, and it could very well do more harm than good.

The post What Does Missouri’s Teacher Shortage Really Look Like appeared first on Show-Me Institute.

Well, I wish twelve-year-old me could show him the Missouri Teacher Recruitment and Retention Blue Ribbon Commission’s report on what needs to be done in order to solve Missouri’s “teaching shortage,” because apparently, a money tree has bloomed and is ripe for the picking.

The report recommended increasing the minimum starting salary for teachers to $38,000, funding the Career Ladder Program (which rewards teachers for extra work that contributes to students’ academic outcomes), establishing a fund to help local school districts pay for the recommended salary increase, adding more paid wellness days (which means hiring more substitute teachers), funding a tuition assistance program for teachers, and providing salary supplements for teachers with National Board Certification.

Funding the starting salary, Career Ladder, and tuition assistance alone would cost an additional $91.5 million—and that is not including the costs for raising other teachers’ salaries who reside above the new $38,000 floor.

While those on the commission were feeling generous endorsing the handout of government funds, similar to Jimmy Conway in Goodfellas (who would give $100 to the bartender just for keeping the ice cubes cold), they did recommend an additional salary supplement for teachers in “high-need” areas.

Show-Me Institute researchers have previously discussed how pay differentiation for teachers could help fix the shortage of specific teachers in the state. Missouri utilizes a “single salary schedule,” which sets a salary floor for teachers who are new and those with 10 years of experience and a master’s degree. The remainder of the salaries in the schedule are calculated by pay increases relating directly to experience and degree acquisition.

This type of schedule rewards teachers solely based on experience and college degrees while ignoring teacher quality, relative teacher supply, and alternative market options. A potential mathematics teacher, who would be in low supply, is therefore not offered her market equivalent wage, and may choose a higher paying vocation. If schools truly want to be competitive and recruit teachers in low-supply fields, then they must respond to competitive market forces.

Almost fifty percent of teachers said they would quit their job if differentiated pay or pay for performance was implemented. Mark Walker, the commission’s chairman, critiqued this stance, stating: “The biggest surprise to us businesspeople serving on the Blue Ribbon Commission is the lack of flexibility you all [the board] has for meeting high-need positions, it’s unbelievably inappropriate in today’s highly competitive market.”

The commission has been tasked with finding solutions to the teaching crisis, and this report could possibly be an impetus to put pay differentiation into practice. I’m glad that leaders of the commission acknowledged that the hostility to pay differentiation is fundamentally unreasonable, but I wish it had been the primary focus of a much less expensive report.

The post The Silver Lining on the Blue Ribbon Commission Report appeared first on Show-Me Institute.

The concerns people have over housing affordability raise a number of policy questions ranging from zoning to the fees Fannie Mae and Freddie Mac charge for new mortgages to the minimum wage, vouchers, and the low-income housing tax credit (LIHTC). In Missouri, the largest state-funded tax subsidy is the LIHTC program. The analysis in the previous two blog posts helps reveal why Missouri’s current LIHTC program is not designed to meaningfully improve housing affordability in Kansas City.

As I explained in the previous post in this series, Kansas City has a surplus of affordable housing for all income groups except those at the very bottom. But does the LIHTC program actually help those at the bottom of the income ladder?

There are numerous problems with the LIHTC program, such as the fact that it inflates construction costs. But arguably the biggest problem is that the criteria it imposes for developers to receive subsidies do nothing to promote additional housing at the cheapest rent levels. The most common arrangement for LIHTC developments is for 40% of the units to be reserved for those earning below 60% of the area median income (AMI). But the rents for the LIHTC units are not based on the income of the potential residents; rents are set based on the income in the surrounding area (the AMI). Because of this, even LIHTC-subsidized housing would likely not be affordable enough for the lowest-income families.

To use some numbers to illustrate this example: As explained above, rent needs to be no more than 30% of your income to be considered affordable, and LIHTC units considered “affordable” can be reserved for those making 60% of the AMI. So rent for that “affordable” unit in a LIHTC development will be 18% of the AMI (30% x 60% of AMI). Based on the $78,000 AMI in Kansas City, this means that the monthly rent for a family of 3 in that LIHTC unit is about $1,170 per month ($78,000 x 18% / 12). But as was described previously in this blog series, a family of three in Kansas City making 30% of the AMI needs rent to be about $585 per month to be considered affordable—and the cost of the LIHTC unit is nearly double that figure. Because of this, LIHTC tends to offer little to no help to the poorest residents.

In future work, the Show-Me Institute will provide more insights into not just the LIHTC program but the broader array of policies that have been discussed—or even new proposals that have not garnered as much attention—to promote a dynamic housing market that serves the needs of all Missourians.

The post Affordable Housing and Kansas City: Further Thoughts appeared first on Show-Me Institute.

In the previous blog post in this series, I posited that (generally speaking) able-bodied individuals should be expected to pay for their housing, and that for housing to be “affordable” to an individual, it should take up no more than about 30% of their salary, both as a rule of thumb and by the federal government’s own definition. But that’s not the end of the story when it comes to establishing what affordable housing is.

Another major question is this: How far away from one’s employment can housing be to still be functionally affordable for that worker? If I work a minimum wage job on the moon, renting a house on Earth and paying to commute daily to outer space won’t cut it.

For a more grounded example, if a worker’s job is in Overland Park, Kansas, but their housing is 25 minutes away east of downtown Kansas City, would that housing—meeting all criteria before considering location—qualify as “affordable housing”, given the added cost of transportation? If the same job were in Independence—nearly 40 minutes away from Overland Park—would we expect that worker to change jobs to something closer to home, or move to housing closer to their job? How do our expectations change if instead of gas being $2 per gallon, it jumps to $5 per gallon?

This question of affordable housing in the context of geography is a nuanced question that doesn’t necessarily have an intuitive or universal answer. But that doesn’t mean answers aren’t being proposed.

For example, the Housing and Transportation Affordability Index, or H+T Index, attempts to simulate what residents of a given census tract might expect to pay in housing and transportation combined as a percentage of their income. Keep in mind that “transportation” here includes all transportation, including trips to the grocery store, for entertainment, etc., so the H+T Index isn’t an apples-to-apples comparison to the HUD definition or other housing-only definitions of affordability. But the H+T index is helpful for understanding that affordable housing that isn’t close to gainful employment is, for all intents and purposes, not affordable.

Other factors can also play into the definition of affordable housing, including whether affordable housing includes homes for purchase as well as homes for rent; whether affordability considers the mitigating costs of roommates where appropriate; and the extent to which affordable housing could still be inadequate housing in some other qualitative way.

That said, a reasonable baseline definition of affordable housing includes the following: it should generally be paid for by the individual, should not exceed 30% of their salary, and should be available in rough proximity to their place of employment. Now, we can turn to the question we’re exploring in this series: Does Kansas City have an affordable housing problem? Stay tuned.

The post Part Four: Does Kansas City Have an Affordable Housing Problem? appeared first on Show-Me Institute.

Next month during his State of the State address, Governor Parson will lay out his budget recommendations for the 2023 fiscal year. In addition, there are supplemental funding requests for our current fiscal year that require immediate legislative attention. The Department of Elementary and Secondary Education has requested approximately $2 billion be appropriated from federal relief funds by April, Missouri’s Medicaid expansion population will run out of funding soon, and the governor has recommended a $15 minimum wage along with a 5.5% pay raise for state employees starting February 1st.

My updated report provides the context necessary to fully understand the tough task ahead for Missouri’s legislature. It also provides a step-by-step explanation of the state’ budgeting process, a graphic explaining the expected timeline for the budget, and a detailed description of many of the difficult decisions required to craft and maintain a constitutionally-required balanced budget. As lawmakers discuss the economic forecasts for the coming year and decide how much to raise future state spending obligations, this report should help provide some valuable insight.

Click here to read the full report.

The post Missouri’s Budget: A Primer (Update) appeared first on Show-Me Institute.

Next month during his State of the State address, Governor Parson will lay out his budget recommendations for the 2023 fiscal year. In addition, there are supplemental funding requests for our current fiscal year that require immediate legislative attention. The Department of Elementary and Secondary Education has requested approximately $2 billion be appropriated from federal relief funds by April, Missouri’s Medicaid expansion population will run out of funding soon, and the governor has recommended a $15 minimum wage along with a 5.5% pay raise for state employees starting February 1st.

My updated report provides the context necessary to fully understand the tough task ahead for Missouri’s legislature. It also provides a step-by-step explanation of the state’ budgeting process, a graphic explaining the expected timeline for the budget, and a detailed description of many of the difficult decisions required to craft and maintain a constitutionally-required balanced budget. As lawmakers discuss the economic forecasts for the coming year and decide how much to raise future state spending obligations, this report should help provide some valuable insight.

Click here to read the full report.

The post Missouri Budget: A Primer (Update) appeared first on Show-Me Institute.

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The post Podcast: 2022 Priorities, a Win in Webster, and Fight for $15 in Jeff. City appeared first on Show-Me Institute.

The Institute for Justice’s report examines the debt and dropout rate of cosmetology students across the country, and the numbers are pretty shocking. To receive a cosmetology license in Missouri, one must complete 1,500 educational hours from an accredited cosmetology program. From the 2011–12 school year to the 2016–17 school year, the average cosmetology program cost $14,629 and students took on an average of more than $7,700 in federal student loans.

That’s not pocket change, but it’s even worse when earnings are considered. In Missouri, the median annual wage of a licensed cosmetologist in 2019 was $23,760. That’s slightly lower than the national average of around $26,000 for licensed cosmetologists and slightly higher than yearly earnings from a full-time minimum wage job. (For reference, earning Missouri’s minimum wage of $10.30 for 40 hours per week and 52 weeks per year equates to yearly earnings of $21,424.) And more than two thirds of students do not graduate on time, increasing their debt burden even more.

So much money is spent to fulfill a state educational requirement, but is that requirement even necessary? Occupational licensing is intended to protect the health and safety of consumers, but recent research indicates that only 25 percent of cosmetology training is health and safety training.

Occupational licensing increases costs to consumers, but the other side of that coin is often overlooked. Licensing requirements dramatically increase costs for the workers who must obtain that license to earn a living. This is especially true in cosmetology, where the costs are directly tied to licensing requirements, but this is also true no matter the cost or resulting wages. It’s time for legislators to reconsider these requirements, regulations, and boards that have burdened workers and consumers for too long. A sunset provision for occupational licenses would be a great step toward reducing burdens and costs for consumers and workers.

The post Costs of a Cosmetology License appeared first on Show-Me Institute.