Green Cards For Sale For Union-Busters

Huck/Konopacki Labor Cartoons

While non-profits and student fundraising groups help build schools in poor communities in Africa and Latin America, wealthy investors from China, Nigeria and other nations are spending tens of millions of dollars to build superfluous school classrooms, libraries and gyms for U.S. charter schools.

Under the federal EB-5 program, wealthy foreigners can effectively purchase U.S. immigration visas for themselves and their families if they invest at least $500,000 into certain development projects, including private charter schools, according to Reuters. All they have to do is create 10 new jobs (even at minimum wage) and maintain them for at least two years. This year the feds approved 3,000 applications for the EB-5 program, nearly double last year’s total.

It’s a great deal for the foreign investors, as they can reap large rewards for their investments, while living legally in the U.S. as they manage their investments. At the same time, charter schools are always looking for more capital to supplement the state and local revenues they already receive. The additional investment capital, combined with lower labor costs and fewer contractual restrictions (most charter schools are not unionized), allows them to do numerous things that would be impossible for traditional public schools (e.g., longer school days, force teachers to be on-call at night and on weekends for homework help, replace teachers with non-credentialed monitors and force students to spend long hours in front of computers).

The influx of foreign capital makes it easier for charter schools to proliferate, increasing the ratio of public schools that are run by private (and in many cases for-profit) charter companies, while at the same time increasing the ratio of non-unionized teachers and unskilled pseudo-teachers. In New Orleans, for example, where charter schools now make up the majority of public schools, unionized teachers now comprise a small minority of working teachers.

Aside from making charter schools much more profitable by reducing wages, benefits and job protections, this back door form of union busting benefits other regional businesses by lowering average wages and benefits in the area. Without tenure and seniority protections or the backing of a union and union lawyers, teachers are less likely to speak out in defense of their students, colleagues or working conditions. Overall, it increases worker passivity and submissiveness, since any criticism or questioning of management could cost one her job.

However, one might reasonably wonder why foreign investors need to be bribed with green cards if charter schools are such a great investment?

The fact is that charter schools are still a relatively risky investment. The IRS is planning to scrutinize their tax-exempt status more closely, according to the Reuters article, especially if they rely on for-profit management companies, as many “non-profit” charters do. At the same time, many charters are being shut down by regulators or going out of business because of poor financial performance. Six Missouri campuses of Imagine Schools, one of the nation’s largest for-profit chains, were recently shut down by state regulators because of poor academic performance, according to the Reuters article. Charters from the Aspire chain have also been revoked, or not renewed, in California. Close to 15% of the 6,700 charter schools that started over the past twenty years have since closed, mostly because of financial troubles, according to the Center for Education Reform.

The EB-5 program also serves the interests of Obama and Duncan’s school privatization agenda by attracting more investment capital to help support fledgling charter schools, while relieving the feds of some of the financial responsibility at a time when there is considerable resistance to government spending on social programs. It is telling that the federal government is unwilling to provide funds to lower class sizes in traditional public schools or to pay teachers a decent wage. It is also telling that the feds have made it easier for wealthy foreigners to live here comfortably as they exploit communities, children and teachers, while refusing to pass the Dream Act or any meaningful immigration reform that would prevent the disruption of immigrant families who are already living here, often with children who are here legally or who have lived here since early childhood.

Poor Little Charter Schools—How to Profit in Poorly Funded California?

John Fensterwald notes that while one in every six charter schools is in California, most would be much more profitable if they operated in other states that fund education more liberally than liberal California. (See the study Location, Location, Location: How would a high-performing charter school network fare in different states? which focuses on the “plight” of Oakland-based Aspire Public Schools).

California funding for public education is 20% below the national average, the primary reason charter school cannot make as much money here as elsewhere. (Charter schools take in taxpayer revenues and attempt to provide educational services more cheaply than traditional public schools, pocketing the difference as profits). Most charters in California rely on philanthropies to fund a portion of their expenses. Aspire relies on philanthropies for 7% of their funding needs.

The question one should be asking is why so many for-profit charter schools are operating in California is the profit margins are so low compared to other states. For Aspire, there is an alternative public revenue stream that provides additional funding: local bonds.

The State Board of Education held hearings today to discuss when charter schools should be allowed to operate as statewide enterprises, thus bypassing local district rules and oversight. The board has only granted statewide status to three charter school organization since 2006: High Tech High, Pacific Technology School and Aspire. This privilege allows charter organizations to start schools wherever they want, without the risk of rejection by local districts. It can also be a huge financial boon. Aspire has passed millions of dollars in bonds to build their own buildings since acquiring statewide operating status, which would be nearly impossible to do under district control.