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School Closures Hurt the Economy 3 Ways: Congress Needs to Help Fund Them!

July 29, 2020

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This Chalkbeat article describes the three ways schools help the economy, two of which are fairly obvious and one of which is far reaching and a bit more subtle.

The obvious ways are by providing child care and by preparing a trained workforce.

The subtler impact is the most direct: it provides thousands of jobs, jobs that if they are cut will hobble the economy:

To protect those jobs, schools need to be able to pay their workers. Congress is currently wrangling over how much money to provide states to help fill large budget shortfalls. House Democrats passed a bill allocating $500 billion, but Senate Republicans’ proposal includes no money for state budgets.

“The single most useful policy action now would be to provide substantial aid to state governments,” Christina Romer, a professor of economics at the University of California, Berkeley and former chair of the Council of Economic Advisers, wrote in in May. “States are facing severe budget shortfalls and will soon have to cut vital spending on public education, infrastructure and social services.”

When federal dollars are used to protect or create local government jobs, economists have found a “multiplier effect”: every $1 spent produces more than $1 of economic benefit.

Congress needs to wake up to this reality and fast. But if the GOP has their way— namely to shrink the government at ALL levels— the economic impact will be devastating… and the child care and job training will be even more compromised than it is now.

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