Dr. Forrest E. Long founded MCH in 1928. Dr. Long had many titles — New York University education professor, author, editor, publisher, and administrator. Since hindsight is always 20/20, it’s easy to see that Dr. Long was also an innovator. While at NYU, he became the editor and publisher of The Clearing House, an educational journal for secondary schools. The journal served as a “clearing house” for ideas and research about the new junior high school model for educating students in grades six through nine. Dr. Long also launched an annual conference where junior high principals could meet to exchange ideas and discuss best practices. The educational community pioneered by Dr. Long in the late 1920s became a successful model that is still utilized today.

In keeping with Dr. Long’s vision, MCH and The edWeb have partnered together to create a new forum for educators and educational marketers. The edWeb is an online forum where administrators and teachers from around the country can come together to discuss issues, get feedback, and provide resources and support. Marketers of educational products can utilize this new social media channel to build brand awareness and connect with customers that use their products and services. Marketers can create public communities to discuss issues in education that are particularly suited to their products and to provide information and customer support. They can create private communities to share internal communications regarding best practices, sales and marketing techniques, and training programs.

The edWeb, MMS Education, and MCH conducted a joint survey regarding K-12 Educators’ Use of Social Networks and Content-Sharing Tools. Two key takeaways are that educators see the value of social networking in many areas of education and they are more likely to join a social networking site dedicated to educators. When those educators join the edWeb, will they see information about your company, products, and services?

To learn more about the benefits of joining edWeb, contact your MCH sales representative today. Call 1-800-776-6373 or send a message to sales@mailings.com.

Download and PDF of the final report regarding the K-12 Educators Survey here.

John F. Hood, President
MCH, Inc.

The Department of Education, which controls the distribution of all the $48 billion in state stabilization funds, announced yesterday that they were releasing immediately the final third of the government services portion, $2.7 billion. The government services portion is $8 billion or 18.2 percent of the $48 billion, two-thirds of which has already been made available to states whose applications have been approved. As of today, over 40 states have been approved. 90% of the $2.7 billion or $2.4 billion has just been added to the pot.

The government services portion is distributed to state agencies at the discretion of the governor. The money is to be used for such things as education, school modernization, public safety, and other government services. Some guidance about where the money is going in each state is available on our spreadsheet. In many cases, however, states have put much of the money in an “undecided” classification so we can’t know.

Obviously, the Department of Education is trying to make available as much money as quickly as they can. It’s still up to the states to put it to use.

John F. Hood
President, MCH, Inc.

MCH has been talking about the advantages of B2i, the recession resistant institutional sector of the economy, for years. According to recent newspaper headlines the institutional sector is getting hit as hard as businesses. But it is not. It’s the bad news that gets attention and readership and the headlines and news stories are biased accordingly.

Here are some recent examples:

• Cape May Herald.com (New Jersey) “February Unemployment Rate Jumps to 8.2 Percent”
• The Daily Astorian (Oregon) “Unemployment rises with economic tide”
• DAILY HERALD (Utah) “Utah’s job losses hit new high”
• The Detroit News (Michigan) “State jobless rate up to 12%”

Buried in each of the articles, typically near the end, are the following statements (in order):

• (NJ) The only area of significant job growth was in education and health services, which added 3,600 jobs in February. Employment in this industry sector has continued to add jobs (+13,600 over the year), running counter to recessionary declines recorded in every other industry sector.
• (OR) Across Clatsop, Columbia and Tillamook counties, healthcare is the one industry that has been growing over the past year. In February, Clatsop County lost 180 jobs in the private sector and governments added 40. Mining and logging employment fell by 60 jobs, construction cut 90 and manufacturing lost 40 and retail trade dropped 40 jobs. Local government education gained 70 jobs. … In Columbia County, the private sector lost 70 jobs and governments added 70. Manufacturing cut 60 jobs, trade cut 30 but educational and health services added 20. Local government education added 70 jobs.
• (UT) On a brighter note, the government and healthcare sectors in Utah are still hiring. The federal, state and local government sectors added 6,800 jobs in February from a year ago, while the health care industry added 3,000 jobs from a year ago, albeit at a slower rate.
• (MI) The education and health care sectors have been the only employment categories to show an increase since February 2008, posting a gain of 10,000 jobs.

Let’s examine another, more specific example:

The Kansas City Star “KCK school board cutting 36 central office slots”

Here is the text of the article in its entirety (bolded text is mine):

“The Kansas City, Kan., school board formally eliminated 36 central office positions Tuesday night, preparing for big budget cuts next year.

With vacant positions, the cut means 26 employees will lose their jobs and two others will be asked to work fewer hours for less pay.

A second wave of staff reductions starts Friday when preliminary pink slips are issued to about 50 employees, including teachers, aides, building-level administrators and more.

The pink slips will be preliminary because board members won’t give final approval to the second wave of cuts until at least April 14. Even then district officials said they expected to recall some of those teachers and employees depending on state funding, stimulus money and rate of attrition.

Board members had agreed to the plan to give employees as much notice as possible and comply with a state deadline that designates when districts must give teachers a contract.

State officials told the district to prepare to lose at least 6 percent of state funding next year – a loss of about $16 million.

Although the news is bleak, it’s not nearly as grim as board members had once expected. The board had feared it might have to eliminate up to 185 positions from a staff of 3,450.

Unlike teachers and those who learn their fate on Friday, district officials said it was unlikely the central office positions would be recalled. Those eliminated include custodians and employees from human resources, student and family services and elsewhere.

Assistant Superintendent J.D. Rios presented the report with a “heavy heart,” but said he saw few options if the district wanted to preserve instruction.

“Frankly the news from the state gets worse,” he said.

Affected employees will work through the school year.”
—————————————–

Let me try and help you interpret this article. Can you tell me how many education jobs will be lost? I doubt it. First of all, none until after the school year several months away. So why the early notice? One reason is institutions like the Kansas City Kansas School District can’t spend money they don’t have. If they are told they won’t have enough, they inform their employees quickly (as a matter of law). But then if the money is restored, so are the jobs. So this article is written as if the stimulus funding doesn’t exist when everyone knows it does, and the money is provided specifically to prevent job losses in education. Of course, restored jobs don’t make headlines. If you can tell what’s really happening from this article, please let me know where the Dow Jones Industrial Average will be in a few months. We’ll both make a killing.

A similar thing happened in California in 2003. Tens of thousands of teachers got layoff notices under state law. In the end relatively few lost their jobs. The layoff notices got the press but the reality ended up differently.

The bottom line? Education, healthcare, and government (B2i in shorthand) are expanding while business is contracting. As a share of the economy B2i is growing while the rest of B2B is shrinking. The stimulus spending just getting underway will accelerate the growth of B2i. If you are looking for opportunity in this time of gloom, B2i is it. And if you are going to read those newspaper articles, read until the end and be a little skeptical.

John F. Hood
President, MCH, Inc.

School districts across the US are beginning to understand the avalanche of money headed their way. A front-page article in the New York Times on Sunday, March 22, entitled “Some Rich Districts Get Richer As Aid Is Rushed To Schools”, discussed the impact of the $80 billion on a number of school districts.

Congress decided to use existing funding formulas to allocate the money, and the states and school districts now know how much they will get. While $25 billion is targeted by poverty level (Title I or NCLB) and to students with disabilities (IDEA), about twice as much, relatively speaking, is untargeted. This is the state stabilization funding, which benefits all school districts. And the formulas used for this money reward school districts that spend more with more money than districts that spend less. This money is intended to preserve educational jobs. Where jobs were in jeopardy, jobs will be preserved. But in states and districts where jobs are not at risk, the money is a gift, and may be spent the way the districts want to (for legitimate educational purposes).

So here’s the point. $25 billion is going to schools with disadvantaged students (NCLB money) and for students with disabilities (IDEA money). These funds will be spent on salaries and educational products and services that are tailored for these special needs. The companies who benefit will mostly be a relatively narrow group that specializes in these markets. But twice as much money will be distributed much more broadly and will be spent on a much more general or unspecialized products. Here’s the real opportunity for B2B marketing companies.

For example, according to the NY Times article, the Uinta County District 1 in Evanston, Wyoming “has enjoyed years of growing budgets. Students attend new or updated schools with plenty of computers; high-tech smart boards have replaced blackboards.” This district will receive $1.5 million in stimulus money. According to the superintendent, Dr. Bailey: “Out of the blue this money has dropped in, and it’s kind of a distraction.”

Your opportunity is to help Dr. Bailey and others like him get rid of his distraction.

John F. Hood, President
MCH, Inc.

I just attended NSSEA, the National School Supply and Equipment Association, annual meeting. I’ve known a number of the exhibitors (manufacturers and publishers for the most part) for many years and spent some time “schmoozing” to take the pulse of the industry.

1.  Recent sales were off for most. In fact I can’t think of an exception.
2.  Expectations for the show were modest as dealer attendance was down. This show is where educational retail stores and catalogers stock up on merchandise for the coming school year.
3. Most were very pleased with their results at the show as the dealers who did attend were seriously buying.

But there was one thing I did not understand. The exhibitors were skeptical about the stimulus funding and seemed unaware of the potential positive effect of the billions of dollars being injected into K-12. And being unaware means they are going to be unprepared for the windfall. For sure they will all benefit. The question is whether they are going to benefit as much as they could have.

To quote from the Department of Education “Official Guidance” of March 7, 2009:

“about $44 billion … will be available to States in 30 to 45 days for distribution to school districts to avert layoffs … and program cuts. … An additional $49 billion … will flow within six months.” That adds up to $93 billion before September 7th 2009.

Let’s put that in perspective. Note the following statistics from the “Digest of Education Statistics, 2008″ published by the Department of Education: The expenditures of elementary and secondary schools are expected to total $631 billion for 2007-08. After adjustment for inflation, expenditures for elementary and secondary schools rose by an estimated 33 percent between 1997-98 and 2007-08.

$93 billion in increased funding in 6 months is a 15% increase over the whole year. This in an industry that has grown 33% after inflation in the last ten years. This is a growth industry where growth is exploding, if only temporarily. Here’s where the beef is!

So should you be skeptical? Maybe. But only skeptical about what the money might accomplish. Because the money will be there. And it will be spent. The first of the 4 guidelines in the Official Guidance is “Spend funds quickly to save and create jobs.”

It’s time to make sure your school and district customers and prospects think of you when the money gets in their hands. Be proactive!

CNN used data from RealtyTrac, The National Bureau of Economic Research, and the US Bureau of Labor Statistics to create an interactive map showing unemployment, employment, and foreclosure trends. Users can capture statistical information for a specific month or view the changes in each category from the time the recession began in December of 2007 through December 2009. MCH has been tracking the impact of the economic crisis for many months and we have consistently reported that safe havens are the education, government, and healthcare sectors. Although every industry has suffered, the job situation in the safe haven industries is on the positive side of the scale.

President Obama will address a joint session of Congress tonight and is expected to provide a high-level overview of the administration’s recovery plan.

The White House has released details about the state-level impact of the newly signed economic recovery package. The report estimates that the combination of tax relief, safety net enhancements, and discretionary government spending will “create or save 3.5 million jobs over the next two years,” adding that the “Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector.”

• OVERVIEW ON AMERICAN RECOVERY AND REINVESTMENT ACT
• IMPACT OF AMERICAN RECOVERY AND REINVESTMENT ACT ON WORKING FAMILIES
• EMPLOYMENT NUMBERS BY STATE
• EMPLOYMENT NUMBERS BY CONGRESSIONAL DISTRICT
• EDUCATION FACT SHEET
• ENERGY FACT SHEET
• HEALTH CARE FACT SHEET
• INFRASTRUCTURE FACT SHEET

John F. Hood
President, MCH Inc.

As the details of the Stimulus Appropriations becomes more clear, it is apparent that congress has given tremendous authority and latitude about the spending directly back to President Obama and his cabinet. Department Secretaries are given authority to waive rules, set standards (or not), choose recipients, and choose timing. While the law provides direction, it also provides flexibility in the interest of getting the money spent quickly.

Here are some examples:

According to the Congressional Research Service: “The H.R.1 (stimulus bill) conference agreement does not provide guidance to the U.S. Department of Health and Human Services … on whether or not all the funds should be obligated in the first year of availability.” This refers to $2 billion in new childcare funding, representing a doubling of federal spending if spent in one year. These funds are available as of the enactment of the law, February 17, 2009.

The New York Times reported today under the headline: “For Education Chief, Stimulus Means Power, Money and Risk”. The article says: “Most of Mr. Duncan’s unusual power would come in disbursing a $54 billion stabilization fund intended to prevent public sector layoffs, mostly in schools. The bill sets aside $5 billion of that to reward states, districts and schools for setting high standards and narrowing achievement gaps between poor and affluent students. The law lets Mr. Duncan decide which states deserve awards and which programs merit special financing.”

“Congress usually spends two years debating the rules for how to spend $50 million,” said Jack Jennings, President of the Center on Education Policy, a research organization in Washington. “But this time they’re providing money without spelling out how it should be spent, so Arne Duncan and his staff are going to have to work out rules themselves in just weeks. He’s going to have his hands full.”

After all the fuss in Congress, they have returned much responsibility to President Obama and his cabinet secretaries.

Last night, President Obama spoke at a dinner in honor of the 200th anniversary of Abraham Lincoln’s birth. This 15-minute speech deftly sums up his philosophy about why government exists and what he believes government should do. Whether you agree or disagree with his approach, it’s important for B2B marketers to understand Mr. Obama’s mindset about government’s role in solving problems.

Referring to the mindset that prevailed under the Bush administration, the president said:

“what’s dominated is a philosophy that says every problem can be solved if only government would step out of the way; that if government were just dismantled, divvied up into tax breaks, it could somehow benefit us all.

“Such knee-jerk disdain for government — this constant rejection of any common endeavor — cannot rebuild our levees or our roads or our bridges. It can’t refurbish our schools or modernize our health care system; it can’t lead to the next medical discovery or yield the research and technology that will spark a clean energy economy. Only a nation can do these things.”

His remarks indicate that he sees America’s institutions — local government agencies, schools, hospitals, etc. — as essential organizations in improving the quality of life and driving economic growth. This is further evidence that the Obama administration and Congressional Democrats will continue to fund the growth of institutions over the current term.

The first part of the speech is embedded below, and the second part will run after, assuming that we’ve configured things correctly.

The National Education Association published a chart that compares education funding proposals contained in the House, Senate, and Collins-Nelson Amendment. Although the chart has been designated as “unofficial”, it does give state-by-state estimates of the funding that would be received under each of the proposals. The AEP is urging members to contact their Representatives and Senators and ask for the original education funding levels in the House bill.