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Inverted Curves, Trade Wars and More Support for Education -- Pre-K to PhD

In its first episode after a July break, the monthly State of the State Podcast returned on August 23. It featured hosts Arnold Weinfeld, associate director of Michigan State University’s Institute for Public Policy and Social Research, and Charles Ballard, MSU professor of economics. For the latter half of the episode, Weinfeld and Ballard were joined by Bethany Wilinski, MSU assistant professor of teacher education, for a conversation about her research into the state of pre-Kindergarten  teachers in Michigan.

In all, there were five main topics of discussion: national economic news, state economic news, state political news, an overview of recent developments in early childhood education, and the findings/policy recommendations produced by Wilinski’s research. Regarding national economic news, the hosts detailed the 3 percent fall of the Dow Jones on Aug. 22 and explained that the trade war between China and the United States -- and the relatively stagnant quarter it produced for both countries as well as the recent shrinking of the German economy - created a general sense of tension about the international economy.

Adding to the anxiety: the U.S. yield curve inverted for the first time since the beginning of the Great Recession in December 2007.

Ballard explained the significance of the move: Why would that worry investors? he asked. “Normally, the longer maturities have higher interest rates.” Long-term bonds tie investments up for longer duration, and therefore, he explained, deliver a premium return. When short-term bonds (generally those held for 10 years or fewer) return more than longer term ones (generally 30-year bonds), historically, it has been a sign of impending recession, he said. On state economic news, Weinfeld and Ballard talked about how interconnected Michigan’s economy is to the international economy. Ballard noted that Michigan has “ of the most internationally connected - by some measures... the most internationally connected [economies] of the states. In large measure, that’s because of this amazingly, internationally integrated supply chain between Michigan and Ontario in the auto sector…,” though this makes Michigan particularly susceptible to failures in the world economy.

As he put it, “When the economy gets cold, Michigan gets colder.” Next, the show briefly tackled some Michigan political news, detailing that roads remained the top priority in the state for people on both sides of the political aisle, and that Gov. Gretchen Whitmer, a Democrat, and Republican state legislative leaders had begun budget discussions in preparation for the end of fiscal year 2019 as of Sept. 30. The hosts noted that they believed that the fact 90 percent of all local millage votes passed this year was a sign that voters, too, were frustrated and had decided that the municipal level was where they had to create change. Following state politics, Weinfeld and Ballard turned their attention to the state of pre-Kindergarten teachers in Michigan. They mentioned that in his second term, former Gov. Rick Snyder approved the largest investment in public pre-K in state history. Michigan’s Publicly funded pre-K program, known as Great Start Readiness, is specifically meant to provide schooling for children who may be at risk of educational failure. The hosts then hinted that although public pre-K enrollment has more than doubled in the last two decades and funding hit an all-time high just two years ago, Wilinski’s research indicated that pre-K teachers themselves feel marginalized and isolated, even within the teaching community. At this point, Wilinski joined Weinfeld and Ballard in-studio to discuss some of the findings and policy recommendations that sprang from her recent research into public pre-K teachers in Intermediate School Districts (ISDs) who work in Great Start Readiness Programs (GSRPs). What she found was troubling to say the least: despite many pre-K teachers having the same qualifications as K-12 teachers, they are paid $20,000 less on average, making it incredibly difficult to attract candidates. Making matters worse, pre-K pay from one school district to another dramatically varies. Furthermore, according to Wilinski, some ISDs - despite allowing pre-K teachers to take part in collective bargaining - cap their pay at just $35,000.

Worse yet, she says, is a general feeling of “disempowerment” among Michigan pre-K instructors, who often feel alienated by their K-12 co-workers, professionally misunderstood by their principals, and excluded from conversations about important topics like district bond proposals and local millage votes. Given this discussion, Ballard concluded the episode by saying, “I think we need more support for education - from Pre-K to Ph.D.”

Troy Distelrath is an Undergraduate Fellow at IPPSR. He is a sophomore at Michigan State University studying Social Relations and Policy and Comparative Cultures and Politics in James Madison College.