A few months ago, I began implementing a money system in my sixth grade class. I did this principally because I was a fledgling (read: awful) teacher and my students went absolutely bonkers each time I set foot in the classroom. It was as if the very sight of me awakened their collective deepest, darkest fantasies of how to break someone. So, I elected to unleash on them a system where they were tangibly rewarded for doing good things and tangibly rewarded less for doing bad things. In short, I figured I’d buy them off. Underlying my desperate measure, though, was a passive economic and psychological curiosity. I wasn’t so much interested in how my kids would respond to shifted incentives, but more what they would do once they had cash in their hands. The result of my accidental experiment in a tiny sixth grade classroom in the middle of the middle of nowhere (not a typo) held deep illuminative power for me and hopefully anyone who reads this. My point, as you will see, is that inequality is the fault of the system, not the citizens fortunate or unfortunate enough to be a product of the system.
Naturally, I scaled the rewards. Students could buy things like ping-pong balls, pens, chocolate, or stickers for under $10. On the other hand, big-ticket items like basketball jerseys, dinner with me, or the opportunity to shave my head, could be priced as high as $250. For those, they would need the better part of an entire semester’s worth of savings. Of course, there were mid-range items like American post cards, foreign coins, and the privilege to choose a song before class, that were much more feasibly attainable. Note: I valued the “shave Mr. Luo’s head” prize at what I imagined was a comfortably-out-of-reach but not altogether absurd rate of $250. Next year, I’ll be doubling that figure.
Students earned money through three predominant paths:
1). Behavior: students received $1 for a day with no warnings. As I teach them four times each week, I added another dollar if they went a full week without any warnings. So, one could earn $5 from behavior per week. A semester has 20 school weeks, which meant $100 was the ceiling for income related to behavior. I should say that, if a student received one warning, he effectively lost $2 for that week; $1 for the day and $1 for failing to go a full five days warning-free. If he repeated this same pattern every single week, he would lose out on $40.
2). Test scores: students received varying degrees of money based on actual score, improvement from previous test, and whether or not a score placed in the top 3 of the class. This domain didn’t only favor high-performing students, because improvement was weighted higher than raw score. Needless to say, though, it was highly unlikely that a student would improve each and every time he tested. For the top score in the class, when weighing factors of improvement and raw score, a student could earn around $20. There were five tests during the year, meaning the ceiling here was also around $100. It’s worth noting, that if you scored below 75%, unless you improved, you wouldn’t get anything. So, as far as class money was concerned, the tests were high stakes affairs. If you were a student who never passed a test and alternated between small score increases and decreases, you might earn $10 for the year. The gap was spacious.
3). Participation: students received money (usually in $1 increments) for correctly answering a specified question. Not every answer could yield a cash reward, but most could. This domain was the wildcard. Students could theoretically answer a question each class. Throw in some extra tough questions worth $5-$10, and a student could bank over $100 from actively participating.
Upon reading the above information, you can probably guess what type of student stood to benefit in this system: well-behaved, high-scoring, active participators. If a student fit each of those descriptions he or (usually) she could be a veritable fat cat in the fiscal universe of class 6-2. For the (usually) boys or girls that could be described as disruptive, test-incapable, and—surprise, surprise—unable to actively, or at least, productively participate, they’d be getting by on a monthly piece of chocolate or the privilege to get a drink of water during class time.
In a nutshell, inequality was inherently vast.
Now, let’s get to the good stuff.
I’ll break down 6-2 like this: There are 5 or 6 students that would fit the bill for ultra-rich. They are all (save for one) highly motivated girls that too aren’t keen on giving their teachers headaches and take great pride in having the right answer, whether it be on a test or in the classroom. On the flip side, there are 7 or 8 that would qualify for the lower quartile. These are exclusively (save for one) boys that are at least two years behind their classmates. They generally have very little self-control and score below 50 on each test. As a result of all these characteristics, they like to make paper airplanes and flick pretty girls in the back of the head as an alternative to studying. The rest of the 21 students would fall into varying levels of the middle class. These students, as a rule, were neither exceptional nor struggled in all three categories. They may have been, for example, great test takers that acted out in class or shy hard workers that hesitated to raise their hand. There were certainly some upper middle classers, who were decidedly close to cracking the top echelon. On the lower end, students flirted with the disastrous prospect of falling into the bottom 7 or 8. If that were to happen, at this level of schooling, it would be a heartbreakingly cavernous hole to climb out of.
My system was predicated on a simple fact: students were going to buy things. I printed a rather sizable amount of money before the semester, and was ardently determined not to print more. I knew what I had should be enough.
It took a few weeks for students to gauge how things were going to shake out. I doubt any of them actually calculated their earning probabilities, but if one was receiving $15 at the end of the week as opposed to $3, they could easily extrapolate—on intuition alone—where their purchasing power lay. During this time, students didn’t buy much of anything. They were trying to make sense this newfangled, slightly mysterious system. After the first student, a quiet, bespectacled boy named Andy came in to buy a ping-pong ball for $5—with no catch to be found—there was a spending rush. Students could hardly believe what they were seeing. I went to town to buy more chocolate.
Here’s where it starts to fall apart:
After students realized where they stood, they adjusted their buying patterns. This reaction was almost inherent. Sixth graders the world over have very little purchasing power in real life terms. They were learning on the fly. I don’t know exactly what happened next—if a pact was made or if it was just a collective savvy—but the girls at the top essentially altogether stopped coming to the shop in my room. I suppose one can only buy so many chocolate soccer balls and packs of gum, before one simply does not need any more of those things. They were saving their money for bigger and better things.
As the semester carried on, a very clear picture began to emerge. The students at the top were accumulating more and more and letting go of very little. The students at the bottom basically spent their money the day they got it. Even the mid-range items fell out of their reach. The wide range of students in the middle had diverse spending patterns. A few of them were saving for the big-ticket items, but generally they saved a little and spent the rest. It was, pretty much, in a word: wow.
Because the system was such that the high level performers so vastly out-earned the lower end, every time the bottom quartile spent money, a massive percentage of it went into the folders of the top few. The same can be said for the middle portion of students, but the percentage was less severe. The problem was that the top-level kids weren’t spending their money. They were making the most and spending the least, proportionally. Another important fact to note: The prices were scaled so that students had to save for an entire semester to buy the big things. Therefore, when they did finally unload their riches onto our classroom society, it would be too late for anyone else to use them with any consequence. There was no carry over. At the end of the semester, the students were gone and the money was dead. So, holding money, at such severe degrees, only served to stall the whole system. But, of course, the students doing the saving had every right to do that.
Now, you may be able to see where I’m going and you’re probably asking this question: How do the spending and saving patterns of the top level kids have any effect on the lower level kids? First, in this system the two probably should not have been related. I should have planned for various scenarios and printed a ton of money. But I didn’t, and the supply couldn’t expand.
Toward the end of the semester, I noticed the stacks of money in my bank getting considerably shorter. It got to the point where I had to go print more just to be able to give out money for rewards. However, the process repeated. All the money spent by the lower and middle level students simply ended up at the top. And the top wasn’t putting nearly enough money back in. I could print money forever, and the same thing would happen. In an exasperated outburst I finally told my students, “Look, this only works if you spend your money. I can’t keep making more money. If you don’t spend it, I’m not going to give anymore out.” So, the kids in the middle and bottom spent what little they had while the ones at the top stopped in to buy a few small items and retained the lion’s share of their money. And, of course, the majority of what was spent went back into their hands. Then I stopped giving out money.
At that point, everyone was a loser. The students at the bottom had nothing. The students in the middle were pretty much broke. The ones at the tippy-top had money, but couldn’t make any more of it, because there was no one else feeding the system. I lost too, of course, because my students had their incentive system taken away. The ultra-rich had a choice: they could either keep their money and see if I would somehow crack and print a bunch more or they could spend a bunch of it and cash in on the big ticket items. They all had enough money to buy at least one large prize. They chose the latter, thankfully. But, sadly, it was already June and there was little time left for further accumulation.
I was inspired to write about my classroom from a Politico article a friend shared with me called The Pitchforks are Coming by Nick Hanauer. The piece sought to debunk trickle-down economics by proving that rich people can’t make money if the middle and lower classes don’t have any money to spend. While I was reading it, a “holy shit” light bulb went off in my head. Hanauer was describing my classroom as though he’d been in it.
There are obviously differences between a 36-student classroom economy and a large-scale global machine. There were no taxes, no inheritances, no creation of wealth, no mortgages, vital sustenance, or car leases. But, there are many fundamental similarities. The crucial caveat is that the supply was not infinite. In the end, one had to spend money for others to make money. The students that made the least money spent their money quickly, the students in the middle saved and spent (they were the model of the whole system), while the students at the top, though probably spending at a similar clip (in actual physical dollar terms) as the students at the bottom, proportionally sat on the greater sums. It’s easy to see how, given the above information, their accounts would continue to expand while the others contracted: The money always went back to them, because the system was so prodigiously in their favor.
In the United States we are supposed to have systems in place to check this kind of thing: marginal tax brackets, estate taxes, minimum wages, unemployment benefits, the list goes on and on. But, those checks are failing miserably. Not only does money not trickle down (because a “trickle” shouldn’t be acceptable in the first place), it trickles up. The inequality gap only gets bigger and bigger over time. More and more people slip from the edge of the middle class into poverty. Less and less people make the forward jump. The reason, as I have said over and over, is simple: the system is too slanted. Jamie Dimon can make tens of millions of dollars a year while the guy that mops his floor may make $40,000. At least my system was designed to motivate students to behave, participate, and improve. Our system barely even does that anymore. But, that’s a discussion for another time.
The most telling thing about my classroom was that the students with the most money lost out when they hoarded everything. In a capitalist system, making money is explicitly tied to spending money. If no one is spending, no one is earning. Saving is crucial, yes, but only when necessary, and only when it’s done in anticipation of creating wealth down the road. There is a point where the inequality gap gets so large, that it is no longer possible for the economy to budge. Historically, the greatest instances of American economic growth are almost always in concert with the lowest levels of inequality. United we get richer, divided we stagnate.
The fatal flaw of my system was that the students controlling the largest sums were not compelled to spend it, until the very end. The fatal flaw of our American system is that the checks in place to force the ultra-rich to bequeath some of their fortune to the masses are ineffective and riddled with convenient loopholes.
In the end, though, my top-performing sixth grade students came to the realization that not only was using their money good for everyone else, it was good for them. Maybe the best and brightest minds in America can come to that realization someday too.