Financial Literacy Is Great. Mandating It With a Ballot Initiative Is Not

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Sometimes when I take a Lyft to LAX, the driver will ask what I do. If I tell the truth and say I’m a professor of education, I almost always regret it, because I’ll immediately get a variety of (usually) uninformed and inaccurate ideas about what’s wrong with schools and how to solve the nation’s education problems. Everyone has been in school, and almost everyone knows — or thinks they know — what needs fixing.

This is the context in which I’ve been thinking about the California Personal Finance Education Initiative, a measure placed on the November ballot that would require high schools to offer, and students to take, a semester-long personal finance course. 

Of course, I’m in favor of increased financial literacy. Many Americans lack such skills, and it leaves them at a serious disadvantage. It’s important to understand things like how to save for retirement (many people don’t grasp the idea of compound interest), how to pay taxes (many people don’t follow how tax brackets work) and how to avoid predatory lenders (many people fall victim to onerous fees from banks and credit card companies). High school may even be a good place to teach such skills — there is some decent evidence that financial literacy can improve personal finance behaviors, like saving.

But I’ll be voting against the ballot initiative. There are several reasons why I oppose it, related to the idea of mandating curriculum via ballot measure in general and to this specific initiative in particular. 

The primary general reason I oppose this initiative is that it sets a terrible precedent. While we might all like financial literacy, it’s not hard to imagine future ballot initiatives that try to change curriculum in ways we might not like. Referendums could try to strip race- and LGBT-related content from the curriculum, mandate abstinence-focused sex education or ban environmental content in science classes. Education policy is already too much like a pendulum, giving educators whiplash with constantly shifting demands. The last thing we need is to pile on new mandates via popular vote — and ballot measures in particular are notoriously difficult to undo.

Another general reason I oppose this initiative is that California already has paths for education policymaking that are subject to electoral accountability, and those elected folks should be allowed to do their jobs. There’s the governor and the state legislature, plus the state board of education and more than 1,000 local school boards on top of that. If voters want their government officials to do something about a curriculum issue, they can lobby for change or vote them out of office. The legislature has indeed already been active in this area, with new curriculum requirements in ethnic studies and computer science and a financial literacy proposal very much like one on the ballot.

Beyond that, legislators, boards and executives in state government are much better positioned to pass rules that make sense in the context of existing education policies. In this case, for instance, California high schoolers already have to take economics, and that course covers many of the same topics as the new proposed mandate. Why not simply sharpen the list of subjects that need to be included in the economics course, rather than layering another partially duplicative requirement on top? The California Department of Education can also work to ensure that appropriate supports are provided to teachers — especially high-quality curricular materials that align with the new expectations — so financial literacy classes don’t become just another complicated-to-understand, unfunded burden on educators.

As for the specifics, I’m not opposed to teaching students about financial literacy, but it’s important to consider the tradeoffs in terms of what will be replaced. With substantial achievement declines in math and English Language Arts and widespread disengagement from school, I am worried about new course requirements that would distract from the educational core. 

And while financial literacy is great, it is no substitute for more direct actions the government can take to help people make better and easier decisions. We can teach children about doing their taxes, but we can also increase direct filing that saves taxpayers from needless fees from for-profit tax-preparation companies. We can coach children in how to manage checking and savings accounts, but we can also ban or sharply cap overdraft or ATM fees. We can teach young people the importance of early retirement, but we can also create safer and more generous retirement options that keep Americans out of poverty. 

If I’m feeling bored, the next time I get in my Lyft, I’ll bring up education policy, as usual. But I’ll tell the driver to oppose the financial literacy ballot initiative and leave the education policymaking to the policymakers. Or maybe I’ll do what my husband does when he doesn’t want to talk to his drivers and just tell them I do HVAC repair while I put in my headphones.

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