Middle-Class Societies Invest More in Public Education

This article was created by the Center for American Progress Action Fund*

By David Madland and Nick Bunker

America’s economic future depends in large part on the quality of our nation’s public education. Education increases productivity, sparks innovation, and boosts our economic competitiveness. In a globally competitive environment, we can’t afford to have a poorly educated workforce.

To boast a world-class public education system requires investments. Alas, we have not invested as much as needed to stay ahead of our international competitors, and the results are clear: Fifteen countries now have higher college graduation rates than us, and our average test scores are lower than those of not just peer countries but also less wealthy places such as Slovenia and Poland.

Not surprisingly, the American public thinks we should be making greater investments in education, with polls showing strong and growing support for increased spending. Seventy-two percent of Americans support spending more on education today, up from 65 percent in 1985. So why have we not been making the investments in education that the public desires and the economy demands?

There are of course many reasons but a key, though often overlooked, piece of the explanation is the decline of the American middle class. Societies with a strong middle class make greater investments in public goods such as education, which helps fuel their future economic success. Because paying for private school imposes a much greater, and sometimes impossible, hardship on middle-class families than it does on the wealthy, middle-class families have a strong incentive to make public schools work. The middle class invests its time and energy in public schools and supports higher levels of spending on education — and especially the taxes necessary to pay for it — than do the rich.

Moreover, people in strong middle-class societies feel they share a similar fate and thus are more willing to make investments that they may not directly benefit from, such as, for example, in education when they do not have school-age children.

Over the past several decades, however, America became less of a middle-class society as the wealthy captured most of the economy’s gains. The top 1 percent’s share of income rose to 23.5 percent in 2007, the last year before the beginning of the Great Recession, up from 9.12 percent in 1974, while over this same time period, the share of income going to the middle class (defined as the middle 60 percent of the population) fell from 52.2 percent to just 46.9 percent. The share of income going to the bottom 20 percent over this period stayed around 3 percent, declining by less than 1 percentage point.

As the rich pull away from the middle class, the relative political power of the wealthy significantly increases compared to the middle class.

As the rich pull away from the middle class, the relative political power of the wealthy significantly increases compared to the middle class. This dramatic change in power distorts our political system, leading to not as much investment in the public goods needed to maintain a healthy middle class, including a great public education system. The rich are able not only to purchase ever more political influence but also boost their political power relative to the middle class, which now feels less influential and thus votes less often and gets involved in politics less frequently. As a result, the views of the American middle class now hold less political weight than they used to.

Because of the decline of the middle class, education spending is lower than it would be otherwise. Indeed, four decades ago the United States ranked second among high-income countries in education spending as a share of GDP — the broadest measure of a country’s income level — with only Canada outspending us, according to the World Bank. In 2008, the most recent year data are available, we ranked 11th — and Canada, whose middle class has also shrunk significantly, dropped to 16th, as countries with stronger middle classes like Sweden and New Zealand edged ahead.

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Middle-Class Societies Invest More in Public Education

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