Freezing teachers’ wages not a lasting solution

The educational sector will remain a growing burden on the economy and businesses until more fundamental changes are adopted.

Larry MacDonald 0

(Photo: Andrew Bret Wallis/Getty Images)

There is one big problem with Premier Dalton McGuinty’s attempt to reduce the Ontario Government’s $15-billion deficit by imposing restraint on teachers’ unions: It’s not a lasting solution. More fundamental changes are needed to keep government spending, taxes and debt from becoming too great a burden on the economy, citizens and business community.

After the freeze on wages and strikes expires in two years, the unions will be back at the bargaining table more militant than ever, looking to make up for lost ground. Expect the sector to become strike prone. Also expect higher settlements for teacher’s wages, fringe benefits and contributions to their underfunded pension, which will continue to push up tax burdens and weaken incentives for businesses and employees to engage in productive behaviour. Last, public debt will likely remain on an upward path, increasing the odds of financial crises.

If Ontarians really want to stop kicking the can down the road, a more substantive solution is required . The answer is to allow greater freedom of choice within the educational system, such as proposed by Nobel Prize-winning economist Milton Friedman.

Right now, Ontario parents who choose a privately funded school for their children are compelled to continue paying taxes to the public school system. Most can’t afford paying twice for their kids’ education, so they are corralled into choosing public schooling.

This isn’t right, argues Friedman. Parents shouldn’t be penalized when choosing an alternative to the public school system. Education taxes should be transferrable—via a voucher—to the tuition fees charged by private schools (given they adhere to the provincial curriculum).

“If present public expenditures on schooling were made available to parents regardless of where they send their children, a wide variety of schools would spring up to meet the demand,” wrote Friedman in Capitalism and Freedom. “Here, as in other fields, competitive enterprise is likely to be far more efficient than nationalized enterprises.”

“Not least of its benefits would be to make the salaries of school teachers responsive to market forces,” noted Friedman. Since the power of the teachers’ unions rests on restricting parents’ freedom to choose alternatives to public schooling, eliminating the restriction should lessen the union’s ability to make extravagant demands.  

The benefits of school choice go beyond providing a more responsive and affordable educational system. A range of business opportunities are opened up to educational entrepreneurs. Also, there is a quicker uptake of technologies that enhance productivity in education. The result is a more dynamic and effective system, the result of which should be greater positive spill-over effects for workforce productivity and economic growth.

The voucher system is not a right-wing conspiracy. Countries using this approach include welfare state paragon, Sweden, and even communist China. That could be, in part, because without vouchers, only the offspring of the very rich have educational options outside the public school system.

Canada’s western provinces, B.C., Alberta, Saskatchewan and Manitoba also support educational choice in one form or another. Ontario once allowed school choice under Premier Mike Harris but it was cancelled by McGuinty. It’s time to bring back freedom of school choice in Ontario.

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