This is the second article in this series.  The main concept to remember as you move through it is that each of these articles focuses on one “mega trend”.  These trends were already in motion before CoVid appeared, what has now happened is due to CoVid they have been accelerated and what was going to take about a decade to play out, will now most likely play out in 2-3 years.

For more on this please read Part One of this series if you have not done so yet as it will provide context which I have chosen to not repeat in this article.  The entire series as it is released can be found here.   Also as you will soon see each of these trends are interrelated and each magnifies the effects of the others.

Today I want to discuss with you how changes in primary and secondary education will drastically impact our economy in the coming years.  For those not familiar with these terms, primary and secondary education are commonly referred to as K-12 education in the U.S.  Right now the media is only paying attention to post secondary education as far as economic impacts go, and that only tacitly

I wanted to begin with K-12 education because while there is a lot of talk about kids going back to school.  Will it happen?  Is it safe, etc.?  No one is really discussing the economic impact this is going to have nor does anyone seem to understand the sheer size of the coming exodus from the public school system.  Remember a common theme I have asked you to think of in this series is the “test drive”.  To my knowledge no one other than myself is using this analogy yet, as to CoVid impacts.  Simply put, if a company say Ford wants to increase car sales all marketing is directed at getting people to test drive Ford cars.  Get enough test drives you get more sales.

Well that is what has happened with about 55 million students in the primary and secondary education sectors in the US.  Many parents or like my wife and I, grandparents, were thrust into essentially home schooling in March-April of 2020.  The first week or two was a nightmare for many.  This is not surprising as we all had no plan, no time to prepare and zero experience with the concept.  We also had to jump in near the end of the school year, so we lacked a clear starting point.

Social media erupted with frazzled parents and virtue signaling posts about how underpaid teachers were.  I understood the sentiment, my wife and I struggled with my grandson who was pretty willfully defiant about getting his work done.  He’d do it but take all day long to do so.  Then I had a talk with him (he’s 9 by the way) that went like this.

Buddy you are blowing a huge opportunity here.   I looked at the amount of actual work you need to do.  I am pretty sure you can do it in 2-2.5 hours a day at the most.  And you could even do two days worth in one day.  That would give you almost 3 more full days to be totally free.  To run around on our property.  To play.  To learn what you want vs. what they make you learn.  To work with me on projects.  You could be free but I guess you don’t want to be.

I know some readers will be triggered by the fact that I would put that much on a poor little 9 year old. Get over it, we don’t do teacup kids at the Spirko house.  Two days later in the garage he said to my wife in a small voice, “grandma I just want to be free”.  The next day he tore into his work and by then we had gotten organized with a schedule and set up with the computer for him.  We had a work area set up and had conditioned his little sister (age 4) to leave her brother alone during “school time”.

I watched a 9 year old achieve the ability to be educated and be truly free in a single week. (Stop here, do not let the impact of that last sentence pass over you without impact.  Read it one more time before you continue and think about it please.) He learned plenty from the “school work” but the real lesson was the lesson of being an entrepreneur.  Schools teach hourly thinking, living by a clock.  Be on time, punch in, get a bell or whistle for breaks and lunch, stay till the end of the day.  Every kid who has ever been in school sat and watched the clock in classes for the last 5 minutes doing literally NOTHING because you don’t leave till the bell rings.  My grandson like many children just got a lesson in thinking like an entrepreneur, do a good job, as swiftly as possible and be judged more on production than attendance.

Now I am a unique guy with a unique perspective so I am sure other parents and grandparents used other tactics to adapt but what ever they did for most it worked.  Two to three weeks into this test drive all the frantic posts on social media vanished.  Parents have now had a test drive of what their children look like learning outside the confines of a government school.  And they like it, a lot.  How much?  Well, back in May long before fears we would not reopen were really considered the Washington Policy Center conducted a survey.  The conclusion was that…

“More parents are considering pulling their children out of the public schools. The poll shows 40 percent of parents are more likely to pursue homeschooling or online school after COVID lockdowns end.“

Just two weeks ago my estimate was that we would have about 2.5 – 5 million new home schoolers in 2020 even when schools open back up.  I based it on the test drive conversion being 5-10%.  I am now upping that estimate to as high as 10-15 million over the next two years.  I do a daily podcast with 250,000 listeners, that is a good sample size.  The shear number of emails I have received recently and comments on social media stating that “my kids are never going back” has been massive.  I have been forecasting the demise of the current education system as a mega trend for a while but the acceleration caused by CoVid is shocking even to me.  Even in my personal relationships, I have recently had parents I know, whom I never thought would home school tell me that they are switching.

The reasons are obvious, first you got the test drive effect.  Parents have seen positive changes with children and had relationships improve, behavior improve, etc.  It is no longer a theory.  Once they got organized they too saw kids doing 8-9 hours of school work in about two hours.  They then started asking, “what the F are they doing with my kids for the other 6 hours and then why are they coming home with 2-4 hours of home work”.

This is now practical experience, not a theory.  Additionally, the idiotic standards schools are talking about like only having school three days a week, expecting kids to wear masks all day long and never get within 6 feet of each other are simply not practical.  They are however, pushing even more parents into saying “no you are not going to do that to my child”.

Add to it the schools are now begging parents who won’t send Johnny and Susie back to choose “virtual school” as their home school option.  My grandson’s school was just so kind as to tell us we have the option to use their Virtual School or enroll for physical attendance.  Oh, how kind of them, it is “optional”.  Well it has been optional since 1994.  For 26 years now Texas parents have had what amounts to unlimited options as to how they educate their K-12 children.

On June 15, 1994, after a nine-year court battle, the Texas Supreme Court in TEA v. Leeper issued a 9-0 decision guaranteeing the right of Texas parents to teach their children at home without fear of prosecution.

Let me be clear about what that means.  Since 1994 the only thing Texas parents have been required to do to home school is, fill out a piece of paper that says they are doing it.  They also must state they are teaching the required core subjects, nothing more.  They do not report to the state, they don’t provide a curriculum outline.  They have 100% total control as to how they provide an education. Since 1989 the state has had zero say in the matter.

The government in essence is now telling citizens that they now have “the option” to do something they have had an undeniable right to for over 25 years.  It is clear to me they have entered the “bargaining phase” of the five stages of grief.  Bargaining is step 3, step 4 is depression and 5 is acceptance.

Virtual School is just the state’s school online and it comes with a lot of invasive oversight and I am sure as that attempt at control grows that will only cause more parents to fully exit the system.  This can for a time prop up a dying system and justify teacher head counts.  However it cannot prop up 10s of thousands of multi million dollar buildings and facilities.  Nor can it stop parents from exploring the unlimited options they have for the education of their children.

Aggravating this issue for the state, the existing home school community (about 2 million strong) knows that the state’s “virtual school” is likely the worst option you can chose for your children.  New home education minded parents soon find there are dozens or companies competing for their business.  They turn to social media and join a few of the thousands of existing groups for home schoolers.  They find very welcoming and helpful folks who are not just willing to help, they want to help.

Through a couple we know we found Acellus Academy and we are going that way as it is the best fully secular program we found for our goals.  But there are literally tons of options.  This is going to suck even more away from the public system.  People like choices and tend to make the best one for themselves for any given need if they have the option.  You do this every day with everything you choose to purchase from food to furniture.  Anyone who looks in earnest will find very little reason to choose to bring the state’s system into their home.  And they will quickly find Johnny and Suzie can still go to college and that families doing this send a far larger percentage of successful kids to college then the state’s system.

Oh friends, it gets worse!  Given this test drive started a few months before summer break the crutch of day care for your kids (for many not all), has been broken too.  By the time schools open (if they open) parents will have had their children out of school for about 6 months.  Whatever you need to do to make having kids out of school work for you has been done after 6 months time.

Oh, and what group of students do you think will be the first to exist the system?  They will be students with involved parents who are self motivated to get work done.  Translation is they will be the best students the system has.  The ones propping up their vaulted test scores.  Additionally, they will be more often than not the children of higher income parents.

I spent a ton of time on explaining the coming exodus, did it help you see the economic impact that is coming?

Here we go, first we have teacher employment.  There are 3.2 million teachers in primary and secondary sectors of education in the US.  We often cite Walmart as the largest single employer in the nation but they employ only 2.2 million, many who are low paid and part time.  Despite all the claims about being underpaid, teaching jobs come with good benefits and with salaries that are higher than many other professionals in our nation.  I estimate at least a third or about 1 million of these people won’t have a job in 2-4 years time.

On top of it, think of how many people are employed in this system as everything from maintenance workers, to administrators, to mechanics, to bus drivers, along with many other jobs in this system.  One thing I can say for drivers and mechanics is at least they have a skill they can market, to a degree anyway outside the system.  While the media keeps telling you all teachers are heroes most have never worked 5 minutes in the private sector.  You are talking a million people, many upper middle aged people who thought they had to rob a post office to get fired, out of a job.

They will find it very hard to find jobs.  I know 50 year olds tossed out by corporate America that are very skilled and they have a hard time.  Imagine a 52 year old who has taught 4th grade for 20 years who looses that fat retirement (at least a big part of it) who is out trying to replace a job that pays 60-80 thousand a year, with full benefits who has never held another job.  Good luck.  This is not a value judgment on the person it is a statement of fact about employment especially during a recession or perhaps the depression we are heading into.

Now let’s think about the trickle down effect.  There are 10s of 1000s of companies that primarily exist to support the education industry, cut that by at minimum a third.  There are 10s of thousands more that make a lot of their revenue from the education segment.  I know one guy who runs a multi million dollar company, most of his revenue is from building football stadiums for High Schools and installing fields for them in Texas.  The computer and network industries do a huge portion of their business in schools and there are tons of other industries that support this system.  Then you have a trickle down effect as all these sectors get cut, every store, every restaurant, every single consumer business in said school district looses business.

Now let’s tie back to the first trend real estate.  Remember as that many people are already moving away from larger markets.   It is important to note that this big drop in property values had already been forecasted by experts in 2019 before anyone knew what Covid was.  That further cuts school spending and further pulls down the education sector.  Property values in these large markets are already dropping so even those that stay are going to protest taxes and either win or move out in final protest.  And those teachers who we are always told are underpaid, well they are going to migrate too.  Call them underpaid if you want but they clearly can afford to live at least close to the schools they teach at.  Those that loose their jobs will be forced to move, further dropping the tax base.

And just like the first factor and all the others we will cover in this series, this is a mega trend that was already happening.  In the past 20 years home schooling grew explosively compared to the increase in student population.  CoVid has simply accelerated this trend.  Once again we see a mega trend accelerated by an economic crisis, not an economic crisis caused by some other event.

This one is going to be hard for many to accept even as they see it happening in front of them.  We call that cognitive dissonance.  Our current education model has been with us since the 1880s and in almost it’s exact form since the 1920s.  While that is a great argument for changing it, it is also shows the danger here.  This system is now a 700 billion dollar market.  We are talking well over a half a trillion dollars in a market that has been a mandated de-facto monopoly for more than a century largely ending.

And this is not going to be replaced by a private sector that charges more or the same amount of money.  Rather online private education is dramatically less then the cost of public education.   So it is not going to be a shift in spending, rather a massive cut in spending.  You can buy a top notch education from the private sector for about 1,000 dollars a year, there are many options that are less or even free.  States spend an average of 12,000 dollars per student a year in the US.  This is the case in really good schools and in really terrible ones.  This can only exist inside a phony system driven by tax payer funds, the force of law and a mass delusion that it is all necessary.

Well, CoVid gave 55 million students and their parents that all important test drive and it totally destroyed the delusion that this system is necessary for at least 10% of those who were thrust into it.  Trust me, Covid has opened a vast black hole that will never shrink and only grow from here.  Again it was a mega trend in progress, slated to gut the public education system by 2030 anyway.

Once again CoVid is killing the dying and I don’t mean people.

Note – If you want to better understand this issue consider listing to my recent podcast, Episode-2688- The Coming Home School Tsunami and its Economic Impact and if you want to be far more resilient in adapting to an increasingly volatile future consider subscribing to my daily podcast here.  Long time listeners will tell you that nothing currently happening is surprising to them.  We have about a quarter of a million subscribers are a two time winner of the podcast of the year award and have spawned thousands of businesses, projects and communities so we must be doing something right.