How One U.S. State Is Trying to Close the Huge Education Gap

be the only ticket to a decent job. The task is complicated by the fact that in the US, the individual states provide the lion's share of the funding for schools and have a lot of influence. In a minute, I'll have a chat with an expert in US education policy from the Economic Policy Institute in Washington, d C. About how exactly you tackle the inequalities that are built deep into the US education system. But first, our US Economy reporter Craig Torres has gone back to school in

a touched a corner of western Maryland. This is Gary Bay. She's the third grade teacher. Welcome to Hi. How are you organized chaos? Welcome? This is inside recess. How are you we are? We're getting the tank ready for tomorrow. We're gonna be standing up for our trout in the Pastorge. They're great, It's gonna raise trouts, some rocklashers. How's it down? Probably the queen as trash every did see you have never thought there'd be a line of children that want

are you? That's school principal Dana McCauley and one of her teachers at Crellin Elementary School in western Maryland. The school sits on the edge of a former Appalachian coal mining village of the same name. Many families struggle here. In fact, more than half of mccaulay's students received a free or subsidized meal. It is classrooms like this one we're widening. Inequality in the US increases, or maybe finally

begins to narrow. The US labor market is demanding more high level skills from the workforce, the types that students begin to build in high school. The basic foundation is built in elementary schools like this one. All rights researchers continue to find that achievement gaps between well off students and poor students have failed to close, despite decades of

work to fix the problem. One big reason is that education in the US is mainly financed with state and local budgets, and local budgets are often tied to local real estate taxes, so the more financially challenged a county is, the more constrained its funds. The result is you often see impoverished school systems producing impoverished adults. The lack of resources for education and poorer states has felt well beyond the school gates. Here's Bruce Baker, professor at Rutgers University

Graduate School of Education. It takes money to provide quality services to two kids, and schooling is human resource intensive. You have to be able to hire and retain enough good people with the right qualification to get the job done. In an affluent community, it's an easier job to get done.

You've got parents and families that are putting additional resources into their own kids outside of school, and you get kids that are coming to see a better fed, better prepared The state of Maryland is considering a reform that would attack this problem head on. William Kerwin is a maryland Ed cat with long experience. He led the team that wrote the plan. He told me the state has to act now, either it stops widening economic disparities or

becomes two societies. Maryland is one of the richer u S states, Yet his report found that four out of every ten public schools in the state get at least fifty of their students from low income families. Test scores are starting to lag, with a wide performance gap between low income and well off students. The plan calls for an increase in state and local spending that rises to more than three billion a year by The goal is to raise standards and teacher pay and provide educators such

as Macaulay with more support. It's not it's not that people don't care about the school system. That's not it. It's it's a matter of where it is on the list of prior you know. Yeah, And honestly I think too that. Seven West, a former teacher who now works for the Educators Union, we had a drink at a popular local restaurant in the county and spoke about the types of challenges the Kerwin Plan would address in rural school districts like this one. Themediate house on income is

pretty low. There's a significant problem here with readiness. This area is also dealing with pretty profound effects of the ovoid crisis UM and more and more pre K programs are are We're seeing students come in with very very acute needs. What Kerwin understands and tries to address is that children from troubled family situations or from poverty are at risk of being vulnerable adults if both their educational

and social needs aren't dealt with. Now coming to this school as a minder that income inequality in the US is increasingly geographic. Suburbs and cities are getting richer while rural areas are getting poor. Garrett County, where Krellin is located, a scene declining enrollment in its school system. Residents told me this is partly due to families finding better opportunities elsewhere. The future of the workforce in Garrett County is in

the classrooms today. I asked Evan West if better education would improve economic development and employment here. It's probably the biggest part of the answer. It's the most important piece of a larger puzzle. Okay, And the Kerwin proposal will be a big fight in the Maryland legislature in the session which started in January. Nobody is sure how it

is going to turn out. Even county officials here are grappling with the idea of how they're going to pay for their share of the reform, even though they would also get more state money. With the plan. I spoke to Paul Edwards. His family has been in this county for four generations. He is a county commissioner and head of secondary education in Garrett County. He has also been a teacher and a coach. He understands the challenges the school system is facing now, from the need for higher

pay to recruit teachers to opioid affected kids. Still, America's county based education financing system presents challenges. Carlin is going to be very difficult fund for us. You know, we're looking at, you know, thirteen million additional dollars we've got to find locally to pay for Carwin. That's not jump change for us because our snowy creek. Yeah, and remember where do we come down here to find crayfish? Back at Crawlin Elementary, I take a walk with Dana mcaulay

around the farm that's behind our school. There are chickens, a greenhouse, orchard, and even a pregnant you during my visit. As her kids leave her, she wants them to have options to satisfy the curiosity that she's built here in the classroom. I want them to have choices. So when I look at um academics. Um, I want them to have choices in the classes that they take. If they if they choose not to take it, it's not going to be because they can't because they don't have the ability.

Do you know what I mean? Like, I want them to have choices, and I want them to be confident, and I want them to feel just securing themselves. This is where we found our bears. Huh, I found bears here. That bears were back here. Yes, were they living, They were just bound. They were passing through Bloomberg News. I'm Craig Trust. So that's the view from Western Maryland. On the phone. Now, I have Elaine Weiss, an education policy

specialist from the Washington think tank, the Economic Policy Institute. Elaine, you've led a campaign in the past to call attention to many of the obstacles in the way of high quality education in low income communities that we we heard about in that piece from from Craig Torres. Um. I mean we heard there that the state is trying to direct more money into those low income schools to try and increase outcomes. But you know, tell us, what what do we know about what works in this area? Yeah?

I mean, is money really the answer, or there deeper changes you have to make. So the short answer is that we absolutely do know how to improve educational outcomes in poorly resourced districts, and it starts with the reality that all kids need the same things in order to succeed in school and be prepared for life, whether higher

education or the start of a career. And we know this because Maslow told us very clearly that everybody needs to start with the basics safety, security, food, and shelter. Kids in particular really need the feeling of being loved and being connected to other people, in particular key adults in their lives. And once they have those things, they can take advantage of the kinds of things, stimulation, and

opportunities to explore and learn that schools offer. The problem, as Crens report illustrated very starkly, is that a growing share of students in our country's public schools don't have access to even those basics, and they are therefore not able to benefit from what our teachers and our schools

have to offer. And due to how we fund and structure our public schools, the opportunities in those schools are also vastly disparate, which means that they are compounding the inequalities that the children in those schools experience in their

daily lives. In the book that I published this past year, we explored a dozen very different communities across the country where schools and communities have built partnerships to ensure that all children have those basics and that schools serving disadvantage students have the tools and resources to provide those kind of stimulating, enriching opportunities. And I shall tell you, those

districts are bucking the trend. A lot of people listening will feel like it will be amazed that that this is still such a big problem, that this debate is still ongoing when you consider that when you can, and not least because actually politicians on both sides, even in this sort of partisan times, febrile partisan times, you've had Republicans and Democrats very firmly in favor of changing the

education system, putting more money into it. I mean, of course, President Bush, you know there's no child left behind policy. I mean, you can debate the details of it, but there has been quite a sort of bipartisan consensus in favor of improving education. And what's been what's what's been standing in the way of the kind of change that you're talking about. I mean, does it still come down to differences about how to do it or has there just been a lack of desire to put money into it?

It's both, you know. So you talk about these decades we've spent people being education governors and education presidents. Throughout those decades, we have systematically put less and less money into our schools. So there's the first irony in all

of this. So that has not happened. And the second piece is that we have completely ignored and even dismissed the reality that poverty and inequity are at the heart of the problem, and we have been ironically and wrongly fixated on these narrow little things we could do, how we run schools, who's the head of a school, what kind of standards we have in a school, while totally ignoring the reality that a growing number of our kids come to school so ill prepared to learn and so

unequipped to deal with the daily stresses that they live in that they can't possibly learn effectively. What I am hopeful about is that that has really turned around in the last five years um and there is growing recognition and even a call to pay a lot of attention to the role up poverty and inequality are playing to try to enact policies that counter those forces and put in place the kind of collaborative, whole child focused approaches

to education. UM. And I would say that the kind of education martial plans that two of our candidates, Bernie Sanders and Elizabeth and put forth would go a huge way toward putting us where we need to be and represent I think a huge growing public recognition that we have been going down totally the wrong path, um, and that what we're calling education reform in the past decades

is really in the wrong direction. Well, it's interesting. I was going to, of course ask you finally about how whether you thought there was a prospect for for real change in this from an election result in November and the presidential election, And you've mentioned that Bernie Sounders and as Witheth Warren both have very dramatic education proposals. I guess the risk is that it does become highly politicized and whatever they do will get reversed by the next president.

I mean another point I guess also people sometimes make about the Democrat side is that, especially when it comes to an election, they're a bit too unwilling to take on teachers and in trying to sort of improve the way that teachers can contribute to outcomes. But is that is that a is that a false debate? That is a very false debate. And it's interesting that so called

taking on teachers should be the problem in education. Imagine if we needed to, which we do in this country, improve our medical system, and we said, what we really need to do is take on doctors, they're the problem. I think we could all agree that that is not only ridiculous but pretty counterproductive. But that's exactly the way we've been dealing with education, as if teachers were the

problem instead of the solution. Teachers have been telling us for ten twenty thirty years that they are seeing kids walk in the door every day, you know, not eating um, not sleeping, you know, stressed out from violence that's going on in dysfunction in their communities, and that we all need to pay attention to this and help equip schools, but also stop these realities from being from dominating children's

lives if we really want them to succeed. And obviously that's true, So I would say the biggest problem is not taking on teach chairs, but listening to teachers. Um and I think anyone who thinks that fighting teachers to improve schools, let's take a step back and think how ridiculous that really is. We did hear in that piece that they are trying these poorer communities. At least this one program is trying to look at everything that's affecting

a child's outcome, not just what happens in school. So maybe things will change. Elaine Wise from the Economy Economic Policy Institute, thanks very much for joining us. Thank you so much. It was a pleasure to be here. Thank you so much for covering this. Elaine made me smile there talking about how crazy it would be to take on doctors because in Britain, politicians and everyone else has been been taking on doctors for years now, ever since

they opposed the creation of the National Health Service. Anyway, moving on, we are going to talk about trade. But before you grown, given how much we've talked about trade in the past, I should say it might be the last time in a while, because it's this week that the US and China have been signing the deal that makes US China trade wars a thing of the past, or at least maybe puts off more trade wars until

after the presidential election in November. We must talk to Sean Donn and our senior trade reporter to ask him whether that's really the case. Sean, I should say this signing ceremony was not timed with Stephanomics in mind. So I'm talking to you just as we're expecting that ceremony to take place. But we have a reasonable idea of what's in the deal. Do you think it will take trade wars out of the headlines for at least the next twelve months or are there still too many question marks?

I smiled quietly when you said that in the in the intro there. I I don't think this is the end of of of the trade wars. And I think the reason for that is, UH. It just leaves so many unanswered questions and so many big issues untackled, UH, including possibly the biggest one in not just US economic

relations with China, but China's relations with the world. And that's the issue of industrial subsidies and all of those cheap loans, cheap electricity, and all the other mechanisms the Chinese have really used to underpin that model of state capitalism that has helped Chinese companies take on the world in recent decades. This is phase one that is gonna come,

we are told by the administration, in phase two. No one expects a resolution to Phase two until after the U S presidential election, and there is always the possibility in the meantime that the Chinese could uh fail to live up to their commitments. The Trump administration could get grumpy about that, and we could see more tariffs. And then finally, there's just one big reality that is going to be with us throughout, and that is that there are still tariffs on two thirds of imports from China

in place. Those aren't going away, The economic impact of those isn't going away, the business reality of those isn't going away. So the trade wars are here. Maybe the better way to think about it is we're getting a truce um, but this is a trade wars are kind of the new normal. So just to digg into that a bit, because obviously this is the most relevance this is going to have, at least in the US, is going to be how it plays into the presidential election.

We've talked before about whether the President would feel comfortable saying that he'd he'd done the great deal and then leave himself open to being criticized by Democrats about the holes in that deal or China's failure to comply with what was in it? And what are the what are the things that if you were in the Democrats side and you were looking for tangible things you can point to to say they're not complying with this deal or or you know, immediate short term weaknesses in it. Um

what's the kind of thing that you're likely to hear. Well, we're already starting to hear some of that from the Democrats. Chuck Schumer, the top Democrat in the Senate, sent a letter to President Trump on Tuesday and and he said, all of the things that aren't in this deal, and he pointed to industrial subsidies, but also two issues like Chinese cyber theft, the hacking of US companies and US government agencies by Chinese hackers. Uh, that is not addressed

in this deal. You pointed to all of those things and said, you know, President Trump, you're giving in too easy. You're showing the Chinese that American negotiators can be steam rolled. And that sets a dangerous precedent for the future. I think we're gonna hear a lot more of that from the Democrats, uh, in the future. And then we're still

hearing criticism from the Democrats on the tariffs. You know, the candidates for president have into to the tariffs and the economic damage to farmers and the manufacturers that's come from them, and and and said, you know, we need to find a better way, although they haven't necessarily offered a better way. It's interesting because you say, uh, we've talked in the past about why the tariffs, that the additional tariffs that had originally been threatened for the end

of last year weren't imposed. And I think our economists pointed out that one big reason was it was going to they were going to affect a lot more US voters and industries than the previous tariffs. But just to be clear, if you're a worker or a company that has seen a negative impact like the ones you visited last last summer, the manufacturing companies from the trade wars, is there anything in this deal that is going to

make your life better? No, mhm. I mean that that is because these tariffs remain in place, and and that is one of the areas for you know where Donald Trump is still open to criticism. That said, Donald Trump is remarkably immune, at least in his behavior, to to criticism. He has already dubbed this a big, beautiful monster of a deal. And like US m c A, which was the rebranded NAFTA, he is hailing this as one of his big economic accomplishments. Uh, and he just dismisses any

criticism of it. Although he does. You do get the sense when you read the tweets people can get under his skin, uh and maybe force him to do or say things that he would not otherwise have done. But I suspect we might hear more about trade in the next few months, if only because a new front might be opening with Europe. We've got just in time for the signing of this deal. We have the European Chief Trade negotiator visiting his counterparts in Washington this week, and

maybe that will produce some fireworks. We'll see. But I'm not going to inflict that on the listener again, and I'm going to let you, Shawn go off to that ceremony. Thank you very much, Thanks for thanks for listening to Stephanomics. We'll be back next week with a special episode from

the World Economic Forum in Davos, Switzerland. In the meantime, you can find us on the Bloomberg Terminal, website, app, or wherever you get your podcasts, and we would love it if you took the time to rate and review our show. For more news and analysis from Bloomberg Economics during the week, follow at Economics on Twitter, or you can also find me on at my Stephanomics. The story in this episode was reported and written by Craig Torres.

It was produced by Magnus Hendrickson and edited by Anita Sharp and Scott Lambman, who is also the executive producer of Stephanomics Special Thanks to Elaine Weisse and Sean Donnan. Francesco Levy is the head of Bloomberg Podcast in the