As far as the Stock Market is concerned, there’s no longer a question as to whether the U.S. economy is in a recession. And that presents a quandary for investors: with most stock sectors moving down, where is a relatively safe place to ride out the economic downturn?
The answer may be in a largely-ignored class of stocks: education-related companies. The statistics tell the story: total education spending in the U.S. is now close to $1 trillion -- more than any other service sector except healthcare. And like healthcare, education spending is largely immune to the ups-and-downs of the economy.
Of course, education is largely dependent on government funding. And if you’re a skeptic, you’re probably saying: “but isn’t there a risk that the new President -- or Congress -- could tighten up on the education purse-strings, in the interest of fiscal responsibility?”
Well, that’s always a possibility. But as Signal Hill Senior Analyst Trace Urdan notes, politicians don’t get elected by cutting back on education. And Urdan says while some of the Presidential candidates have been critical of the No Child Left Behind law (the catalyst behind much of the rise in school budgets), their main beef is that even more money needs to be spent to meet its objectives.
So if education emerges from the current economic/political situation unscathed, then providers of which educational products and services stand to benefit the most? In NBR’s upcoming series and Presidents’ Day program, “The New Business of Education,” we’ll look at four possible areas:
- Testing
- Tutoring
- Charter schools
- Educational technology
And if that isn’t enough, we’ll even do some of the homework for potential investors, by noting the leading firms in each of these areas.
Clearly, education is an industry that isn’t going away. (If you’re still skeptical, consider this: in 2010, the number of school-aged children will just about match the 81 million Baby Boomers). So if you’d like to get in on the action in this growing and seemingly recession-proof business -- or if you’re a parent with a vested interest in it -- be sure to tune into NBR on the nights of February 11-14 and February 18.
Comments
As a public school teacher for 20+ years, several things about NCLB have become VERY clear to me:
1. The intent of NCLB is to privatize public schools.
2. It appears...after reading this NBR report... that the intent is to make money, not to improve schools.
3. Those who design and support these programs have no idea what students need, or the effect this testing program is having in a classroom. 2/3 of my time is now spent on test prep and testing...and the other 1/3 is spent documenting and defending my curriculum.
4. Unless we wake up to this privatization effort and change direction, public schools will disappear. Because public schools serve to support democracy by creating an informed citizenry, their demise would be a very sad thing for our country.
Of course, Mr. Kahn's reports will be criticized by those who benefit from the vast economic resources committed to education. One post said tutoring companies are not held accountable in NCLB services. Completely incorrect. In NJ, if the company does not show progress two years in a row, they can no longer participate in the program.
In public education, without any measure of progress, teachers get to keep their jobs on the first day of the fourth year.....forever.
To all the attacks on "testing," I say that those attacking haven't done the math. In NJ, the time spent taking standarized tests is less than 1% of the school year. I don't believe any member of the public would feel that an undue burden. In fact, I believe it to be way too small a number. If we tested kids regularly, using a standard measure, we could remediate when they are a few days behind. Instead, we (meaning public education) waits until students are years behind before anything is done.
Too many educators bemoan the growth of "for profit" education companies, and then go out and tutor on their own and keep 100% of the revenue as profit. Go figure!
Mr. Kahn,
I suspect the flak you are catching for this segment comes primarily from those intimately involved in the learning of young people. It is no exaggeration to say that teaching is a calling. Those of us in the profession do it because we care; we do it because we love learning and children; we *certainly* don't do it for money. As altruists with a higher purpose, we take great offense toward those who view the cause to which we have dedicated our lives as simply an opportunity to profit monetarily.
Unfortunately, such a mercenary outlook is all too common in our country. It should come as no surprise that education and learning are not valued in America. America values only that from which a profit can be made. Is it any wonder that Asian countries, where education is sacrosanct and teachers are revered, are so far ahead of the United States in education, despite having a fraction of the resources that we do?
As you say, you *are* just the messenger in this instance. Your report merely mirrors the materialistic values of American society. But if no one takes responsibility for his or her own actions, will these ugly flaws ever be corrected? In the movie "Gentlemen's Agreement," Gregory Peck's character notes that it isn't the bigots who are the problem in the perpetuation of anti-Semitism. It is the "good" people who never speak out against them.
In the ongoing war between the corporatocracy and public education, if only teachers speak out. will the suffering of our students at the hands of those who put the accumulation of money first ever end?
Gee, I think I'll quit my job as a special education teacher and start a business in the growing education industry. 'Tis testing time and I'm just plain tired of subjecting children with IQs in the mentally retarded range to the same grade level tests as their nondisabled peers.
In the eleven years that I have been studying the attacks on public education I've learned a little bit about data manipulation and ideology masquerading as educational research. Therefore, I believe I'm now qualified to start a "Made-To-Order-Research" business.
Oh crap, I forgot. The think tanks already have a monopoly on that.
http://www.epicpolicy.org/node/598
I believe that some of the comments being made
about this program are the equivalent of shooting the messenger.
I don't see how NBR was irresponsible in reporting that some companies are making money as a result of the requirements of the No Child Left Behind Act.
That is a fact.
Also...the program never took a stand regarding
the merits of that law. We did not evaluate whether the law has been good or bad in terms of promoting education. As a business program, our focus was solely on the economic/financial consequences of No Child Left Behind.
We also were not suggesting that anyone participate in the exploitation of school children. By presenting an interview with an
analyst who specializes in education-related
stocks, we were merely spotlighting investment
possibilities for viewers who want to profit
from trends in education. That is not an
inherently evil goal, and it does not mean
that we consider children only to be "potential
assets on which to make money."
Jack Kahn
Director of Program Development
NBR Enterprises/WPBT2
Your view of America's public school students as potential assets upon which to make money is obscene. Throughout history, there have been societies which dehumanized minorities in order to oppress them, but I believe the contemporary United States is the first nation in history to do so to its own children.
It would be nice if we as a nation cared about the children in our schools--in their education and well-being—as opposed to simply caring about how lucrative it might be to invest in charlatans peddling the latest equivalent of educational snake oil.
However unintentionally, your program "The Business of Education" has pinpointed the true reason for the passage of NCLB and our government's pigheaded refusal to rescind it: It benefits Big Business, who in turn make donations to the coffers of our legislators. That's America--the best democracy money can buy.
I cannot adequately convey my disgust.
This is a very well-done and well-researched report!
Indeed Education always has been a terrific sector to invest.
Interestingly, however, we cannot avoid asking the question about the relationship between the perception of public schools as "failures," thus the need for reform and restructuring them with new curricula, new training, newer tests, etc., and the good investments and gains in economic terms due in not small proportion to these very same reforms and restructuring projects.
I was totally shocked and dismayed when I saw this program. Public schools are being attacked on all fronts in the name of accountability. However none of these four "growth areas"...testing companies, tutoring companies, charter schools, and educational technology companies are held accountable in any way for the huge sums of money they receive from the public. The private sector has wanted to get their hands on education funding for a very long time, and NCLB has paved the way. I completely agree with Kate. This anti-child, for-profit agenda is stripping our schools of valuable resources. The students in my school no longer have art, music, reading specialists, nurses, school psychologists, and support staff. They now have tests. Lots and lots of poorly written, developmentally inappropriate tests, which guarantee failure, thus ensuring future customers for private tutoring companies, charter schools (where students do not take the same standardized tests that hold all public schools accountable), and huge profits for testing companies. It's a vicious, mean-spirited cycle. Our children are most definitely being left behind.
Didn't it even slightly disgust when you suggested investors should make money by sucking it from our children's educations? There may be a lot of money to be made in the "education-sector" but it is morally and ethically reprehensible.