An economic stimulus for the mind

Northwood, Cornerstone team up on free enterprise education

Girls working at desk
Challenged to recreate the “liberty matrix” they learned earlier this year, Cornerstone Schools students Desharanique Mitchell, left, and Monica Hamilton go over their notes.

Is minimum wage a good or a bad idea?

Brennan Brown clearly thinks it's a bad idea, but his eighth-grade audience gives him a run for his money. Only a few years away from their first after-school jobs, these teen-age boys aren't so sure that a guaranteed income is a bad thing.

"Do you think minimum wage will go up?" one student asks, sounding hopeful. He's heard rumors as high as $18 an hour.

Absolutely, Brown replies, but is that good for the country? Then he turns the question around. If $7.50 an hour minimum wage is good and $18 an hour is better, then why not set minimum wage at $50 an hour?

Boy with hand raised
Terrance Morris raises a hand to join the discussion of minimum wage laws and their effects. He and classmate Diara Alexander, right, are eighth-graders at Cornerstone Schools.
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The boys laugh. That would put people out of business, they say.

Exactly, Brown replies. That's what minimum wage laws do.

Conversations like this are now weekly fare in eighth-grade classrooms in Cornerstone Schools in Detroit. As a guest instructor, Brown is teaching a course called "Enterprise and Entrepreneurship" under a partnership between the school and Northwood University of Midland, where Brown is a professor of economics.

The goals are to introduce students to economics, foster their appreciation and understanding of free enterprise and entrepreneurship, and examine the role of the individual and government in a free society, Brown said. (See "The importance of a sound economic education")

The partnership grew from a lunch discussion between Clark Durant, Cornerstone CEO, and Northwood President Keith A. Pretty, Durant told Michigan Education Report.

"We shared a common love for freedom, so it was a matter of saying, 'How will we bring the idea of freedom to our schools?'" he said. "Kids need to understand how freedom works, how the market works."

The institutions worked together to develop the curriculum and select texts, and Brown began teaching in the fall of 2008.

"I give a lot of credit to how well Cornerstone has built the foundation of their education," Brown said. "I have been struck by the students' openness to ideas."

"Cornerstone kids are like any other kids," Durant said. "They are hungry to know more and they are willing to challenge and be challenged."

That's apparent during the class period dedicated to minimum wage laws, during which Brown discusses the "textile war" of 1937 and the establishment of the Fair Labor Standards Act. The average textile worker in Massachusetts was making 40 cents an hour at the time, he said, compared to 20 cents an hour in the South.

The lower labor costs were a competitive advantage — "write that down, competitive advantage," — Brown told the students, which drew business owners south. Faced with losing industry, what could the North do?

They could lower their labor costs, the students said, or offer better customer service — "say thank you more" — or even clean up the factory grounds. That's called "adding value to your business," Brown said, nodding.

But wait, one young man suggested. If the Northern workers were paid more, maybe they also turned out a better product. That's possible, Brown agreed, but the test of that is whether customers are willing to pay more for the product.

What actually happened is that Congress passed the Fair Labor Standards Act and set minimum wage at 25 cents an hour. It rose to 40 cents an hour quickly, Brown said, taking away the South's competitive advantage and, with it, Southern workers' jobs, "hurting the very people we are told that it helps."

"You now know more about minimum wage than 99 percent of those serving in the Legislature in Lansing or in Washington, D.C.," Brown said.

Wrapping up that lesson, Brown headed to another Cornerstone campus, where another group of eighth-graders discussed key components of the "liberty matrix:" private property, free market, a profit/loss system and limited government.

Ernestine Sanders, Cornerstone president, said that bringing in outside professionals like Brown helps Cornerstone students see that the "world is far larger" than the classroom. The school also works with the Detroit Symphony Orchestra, Cranbrook Schools and Michigan State University music education students on joint projects, she said.

"If you can establish these collaborations, it really enhances and deepens the curriculum," she said. As part of Brown's class, each eighth-grader must develop an entrepreneurial project and present it for judging during a field trip to the Northwood campus this spring.

In addition, every student who successfully completes the "Enterprise and Entrepreneurship" class will be offered a $10,000 Northwood University scholarship, payable over four years, to attend any Northwood residential campus.

Asked what they've learned so far, eighth-graders Monica Hamilton and Demetria Bryant, both members of Brown's afternoon class, said they didn't know much at all about economics before the class began.

"I didn't know they took money out of your check for taxes," Hamilton said.

An entrepreneurial operation in its own right, Cornerstone Schools enrolls 1,100 students at several Detroit area campuses. The private school was founded in 1991 by a group of business, civic and religious leaders at the challenge of Cardinal Adam Maida, who recently retired as head of the Catholic Archdiocese of Detroit.

Families paid up to $3,500 in tuition at Cornerstone this year, but that doesn't cover costs. The remainder comes from donations, fund-raisers and sponsorships, a significant challenge today, Durant said, despite some high-profile support from the Detroit Tigers and Detroit Pistons, as well as from major business and industry.

"It's been an economic tsunami that has hit our families and our donors as well," he said.

The Foundation for Economic Education, a non-profit organization that works to advance education on free enterprise and limited government, donated textbooks for the economics course, while Northwood donated two interactive whiteboards. Northwood is a private, nonprofit university specializing in managerial and entrepreneurial education. It has residential campuses in Midland, Florida and Texas and operates an Adult Degree Program in nine Michigan locations.

Brown said the state of the economy and plans to fix it do work their way into class discussions.

"As tough as things are, we are able to showcase how free enterprise works," he said. "We ask, 'How does this policy affect your liberty?'"

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Lorie Shane is the managing editor of the Michigan Education Report, the Mackinac Center’s education policy journal. Permission to reprint in whole or in part is hereby granted, provided that Michigan Education Report is properly cited.