Reforming Businesses, Reforming Schools: Outsourcing as a Fad

Readers over a certain age may recall reforms that cascaded through corporations in each decade since the 1960s. They might recall “zero-based budgeting,” “management by objectives,” “restructuring,” “management by walking about,” and “Quality  Circles.” Sure, I could name more but that is enough.

Opinion leaders beat the drums for each one as they rapidly spread through The Financial Times, Forbes, The Economist, and other media as CEOs wrapped their tongues around the inevitable acronyms surrounding these reforms.  They were immensely popular for a few years, even a decade or more and, you know what’s coming, they faded. They live now as footnotes in doctoral dissertations–the last refuge for a reform.

I want to add another one to that list: “Outsourcing.”

Outsourcing or “offshoring” occurred as a global market for U.S. products matured in post-World War II decades. For most U.S. manufactured products, it made economic sense to have designers, engineers, assembly line workers, and marketing people in close proximity such as making cars in Detroit, Michigan or appliances at General Electric’s facility in Louisville, Kentucky. But as global competitors for cars and appliances arose, U.S. companies had to cut costs to remain competitive. Cutting costs happen when new technologies make production more efficient and when cheaper labor is available. Latin American and Asian countries attracted U.S. companies because labor costs were far lower. Thus, offshoring or designing products in the U.S. and producing them in other countries began. Manufacturing jobs in the U.S. peaked at nearly 20 million in 1979 and fell to just under 12 million by 2010.

But in the last decade, U.S. companies have reopened shuttered factories and built new ones producing appliances and other products stamped “Made in U.S.A.” How come? New technologies have increased on-site productivity in manufacturing while the costs of producing abroad have risen such as higher wages for foreign workers and transportation, and unions have bvecome more amenable to management offers.  For the U.S. bringing designers, engineers, and production together in one place now means higher profits than offshoring. There is now an upsurge in manufacturing jobs, not as great as in the early 20th century but an increase in jobs nonetheless. So add “outsourcing” to the list of fads in business reform. What about school reform in these same decades?

No need to count the faddish reforms that have showered schools.  Readers can make their own lists of which ones have occurred in their lifetimes. Many of which, I should add, have been imported into schools from the private sector. Every single business reform mentioned in the first paragraph have been reincarnated in schools. Ditto for “outsourcing.”

Education dollars are always in short supply, particularly in times of fiscal stress, so the search for efficient ways to operate schools easily piggybacked on the business surge of “outsourcing.” Contracting out  student lunches, bus transportation, and janitorial services have rippled across the nation’s 14,000 school districts since the 1980s, including teaching and learning.

For-profit companies taking over failing public schools in Baltimore, Philadelphia, Highland Park (MI), and other districts is one example. And cyber charter schools and blended schools run by for-profit companies are other examples. Note that no middle-class and upper-middle-class suburbs or exurbs seek out private contractors to run their schools. The phenomenon is localized in poor and minority schools that fail to make academic progress.

While some critics see this outsourcing of public school services as part of a dark design to privatize public schools, others endorse efforts to contract out those support services to save money without sacrificing quality. Moreover, privately-run student lunches, bus transportation, and janitorial work can be easily assessed as to whether or not they are cost effective. But when it comes to the core activities of teaching and learning, that is a much harder Brazil nut to crack.

Consider other public institutions that have outsourced their core activities such as prisons. Outsourcing prisons to for-profit companies has a checkered history. Nearly 10 percent of all inmates are in privately-operated prisons. Whether the promised efficiencies and saved public dollars have materialized remains contested.

When it comes to outsourcing actual teaching and learning, whether online or in traditional classrooms, similar contested findings make it hard to make the case that private companies save tax dollars and do the job as well as schools.

In the last decade, a slow but perceptible turnaround in manufacturing products in the U.S. has occurred. Offshoring is no longer a panacea for U.S. companies. Another fad gone. Because school fads, many of which have been imported from the private sector, lag behind shifts in business innovations, I would expect that outsourcing teaching and learning (but not school support services) will die a slow death except in those locations where poor children go to school. There, I believe, it will flourish because when you do not know what to do, you experiment, experiment, and then experiment some more.