For most of American history, parents could expect that their children would, on average, be much better educated than they were. But that is no longer true. This development has serious consequences for the economy.
The epochal achievements of American economic growth have gone hand in hand with rising educational attainment, as the economists Claudia Goldin and Lawrence F. Katz have shown. From 1891 to 2007, real economic output per person grew at an average rate of 2 percent per year — enough to double every 35 years. The average American was twice as well off in 2007 as in 1972, four times as well off as in 1937, and eight times as well off as in 1902. It’s no coincidence that for eight decades, from 1890 to 1970, educational attainment grew swiftly. But since 1990, that improvement has slowed to a crawl.
Companies pay better-educated people higher wages because they are more productive. The premium that employers pay to a college graduate compared with that to a high school graduate has soared since 1970, because of higher demand for technical and communication skills at the top of the scale and a collapse in demand for unskilled and semiskilled workers at the bottom.
As the current recovery continues at a snail’s pace, concerns about America’s future growth potential are warranted. Growth in annual average economic output per capita has slowed from the century-long average of 2 percent, to 1.3 percent over the past 25 years, to a mere 0.7 percent over the past decade. As of this summer, per-person output was still lower than it was in late 2007. The gains in income since the 2007-9 Great Recession have flowed overwhelmingly to those at the top, as has been widely noted. Real median family income was lower last year than in 1998.
There are numerous causes of the less-than-satisfying economic growth in America: the retirement of the baby boomers, the withdrawal of working-age men from the labor force, the relentless rise in the inequality of the income distribution and, as I have written about elsewhere, a slowdown in technological innovation.
Education deserves particular focus because its effects are so long-lasting. Every high school dropout becomes a worker who likely won’t earn much more than minimum wage, at best, for the rest of his or her life. And the problems in our educational system pervade all levels.
The surge in high school graduation rates — from less than 10 percent of youth in 1900 to 80 percent by 1970 — was a central driver of 20th-century economic growth. But the percentage of 18-year-olds receiving bona fide high school diplomas fell to 74 percent in 2000, according to the University of Chicago economist James J. Heckman. He found that the holders of G.E.D.’s performed no better economically than high school dropouts and that the rising share of young people who are in prison rather than in school plays a small but important role in the drop in graduation rates.
Then there is the poor quality of our schools. The Program for International Student Assessment tests have consistently rated American high schoolers as middling at best in reading, math and science skills, compared with their peers in other advanced economies.
At the college level, longstanding problems of quality are joined with the issues of affordability. For most of the postwar period, the G.I. Bill, public and land-grant universities and junior colleges made a low-cost education more accessible in the United States than anywhere in the world. But after leading the world in college completion, America has dropped to 16th. The percentage of 25- to 29-year-olds who hold a four-year bachelor’s degree has inched up in the past 15 years, to 33.5 percent, but that is still lower than in many other nations.
The cost of a university education has risen faster than the rate of inflation for decades. Between 2008 and 2012 state financing for higher education declined by 28 percent. Presidents of Ivy League and other elite schools point to the lavish subsidies they give low- and middle-income students, but this leaves behind the vast majority of American college students who are not lucky or smart enough to attend them.
While a four-year college degree still pays off, about one-quarter of recent college graduates are currently unemployed or underemployed. Meanwhile, total student debt now exceeds $1 trillion.
Heavily indebted students face two kinds of risks. One is that they fall short of their income potential, through some combination of unemployment and inability to find a job in their chosen fields. Research has shown that on average a college student taking on $100,000 in student debt will still come out ahead by age 34. But that break-even age goes up if future income falls short of the average.
There is also completion risk. A student who takes out half as much debt but drops out after two years never breaks even because wages of college dropouts are little better than those of high school graduates. These risks are acute for high-achieving students from low-income families: Caroline M. Hoxby, a Stanford economist, found that they often don’t apply to elite colleges and wind up at subpar ones, deeply in debt.
Two-year community colleges enroll 42 percent of American undergraduates. The Center on International Education Benchmarking reports that only 13 percent of students in two-year colleges graduate in two years; that figure rises to a still-dismal 28 percent after four years. These students are often working while taking classes and are often poorly prepared for college and required to take remedial courses.
Federal programs like No Child Left Behind and Race to the Top have gone too far in using test scores to evaluate teachers. Many children are culturally disadvantaged, even if one or both parents have jobs, have no books at home, do not read to them, and park them in front of a TV set or a video game in lieu of active in-home learning. Compared with other nations where students learn several languages and have math homework in elementary school, the American system expects too little. Parental expectations also matter: homework should be emphasized more, and sports less.
Poor academic achievement has long been a problem for African-Americans and Hispanics, but now the achievement divide has extended further. Isabel V. Sawhill, an economist at the Brookings Institution, has argued that “family breakdown is now biracial.” Among lower-income whites, the proportion of children living with both parents has plummeted over the past half-century, as Charles Murray has noted.
Are there solutions? The appeal of American education as a destination for the world’s best and brightest suggests the most obvious policy solution. Shortly before his death, Steve Jobs told President Obama that a green card conferring permanent residency status should be automatically granted to any foreign student with a degree in engineering, a field in which skills are in short supply..
Richard J. Murnane, an educational economist at Harvard, has found evidence that high school and college completion rates have begun to rise again, although part of this may be a result of weak labor markets that induce students to stay in school rather than face unemployment. Other research has shown that high-discipline, “no-excuses” charter schools, like those run by the Knowledge Is Power Program and the Harlem Children’s Zone, have erased racial achievement gaps. This model suggests that a complete departure from the traditional public school model, rather than pouring in more money per se, is needed.
Early childhood education is needed to counteract the negative consequences of growing up in disadvantaged households, especially for children who grow up with only one parent. Only one in four American 4-year-olds participate in preschool education programs, but that’s already too late. In a remarkable program, Reach Out and Read, 12,000 doctors, nurses and other providers have volunteered to include instruction on the importance of in-home reading to low-income mothers during pediatric checkups.
Even in today’s lackluster labor market, employers still complain that they cannot find workers with the needed skills to operate complex modern computer-driven machinery. Lacking in the American system is a well-organized funnel between community colleges and potential blue-collar employers, as in the renowned apprenticeship system in Germany.
How we pay for education shows, in the end, how much we value it. In Canada, each province manages and finances education at the elementary, secondary and college levels, thus avoiding the inequality inherent in America’s system of local property-tax financing for public schools. Tuition at the University of Toronto was a mere $5,695 for Canadian arts and science undergraduates last year, compared with $37,576 at Harvard. It should not be surprising that the Canadian college completion rate is about 15 percentage points above the American rate. As daunting as the problems are, we can overcome them. Our economic growth is at stake.
By: Robert J. Gordon, The New York Times, September 7, 2013
As thousands of high school graduates head off to college in the next few weeks, they’ll see a lot more women than men on campus — specifically, they’ll see three female students for every two male students they spot. These scenes are dramatically different from the ones their grandparents would have seen in the 1960′s when the percentages were reversed.
The surge in women’s college enrollment appears in their graduation figures.While only about 30 percent of women (and men) older than 25 have a college degree, in recent years, women have earned about 57 percent of bachelor’s degrees. Mark J. Perry, an economics professor at the University of Michigan and scholar at the American Enterprise Institute, estimates that there are now about 4.35 million more women with college degrees in the United States than men.
That’s some progress.
Yet, progress in college degrees received (women also earn a larger share of master’s and doctor’s degrees than men do) has not turned into progress in paychecks received.
In 2011, women working full-time earned about 77 cents for each dollar that a man earned, according to data compiled by the U.S. Census Bureau and the Bureau of Labor Statistics.The gap has narrowed over time, which is good news. But, as President Obama said on the 50th anniversary of the passage of the Equal Pay Act making it illegal to discriminate in pay on the basis of sex, “does anybody here think that’s good enough?”
I sure don’t.
So, after all these years, why does the pay gap still exist? Is it because women choose to become social workers rather than rocket scientists, as some have noted? Or is it because they have decided to stay home with the kids and stop working or to work part time, as others have noted?
On the first point, rocket scientists certainly do make more than teachers. The median wage for an aerospace engineer in 2012 was $103,720, almost double the $53,400 a typical elementary school teacher could expect to make that year. It’s also true that only about 14 percent of architects and engineers are women, while more than 80 percent of elementary and middle school teachers are women. Over all occupations, women’s wages would be lower than men’s wages due to differences in occupational choices.
On the second point, fathers are more likely to work full-time than mothers. Nearly 40 percent of mothers worked part-time or not at all compared with 3 percent of fathers, according to a study by the American Association of University Women. Women who leave the labor force don’t gain much work experience so that when they return to work, they’re likely to make less than another person, male or female, with the same qualifications who has an unbroken career record.
Again, the data support this assertion. Judith Warner recently wrote for the New York Times Magazine about the cost to mothers when they leave their careers to spend more time with their families. Warner found that the women she interviewed who had returned to the work force a decade after leaving their jobs to take care of their kids were generally in lower paying, less prestigious jobs than the ones they left.
A separate study found that women who returned to work after an extended time off were paid 16 percent less than before they left the work force, while another study Warner cites found that only one-quarter of women who returned to the work force took a traditional hard-driving job, such as banking, compared with the two-thirds of women who were employed in such jobs before taking time off.
One final factor helps explain the pay gap: kids. In a paper published in the late 1990s, Columbia University professor of social work and public affairs Jane Waldfogel showed that having children has a negative impact on a woman’s wages, while it has no or even a positive effect on a man’s wages. The fact that the pay gap between women without children and women with children is larger than the pay gap between men and women further highlights the negative impact of kids on earnings. Waldfogel noted that it’s as true in 1998 as Victor Fuchs reported a decade earlier, that “the greatest barrier to economic equality is children.”
The research shows that having kids is bad for your paycheck. What the research doesn’t seem to show, however, is that many moms may actually not care.
By: Joanne Weiner, She The People, The Washington Post, August, 13, 2013
“Hoping For The Best”: In The Race For The Future, Virginia Foxx And House Republicans Are Willing To Tolerate Defeat
There’s been a fair amount of talk on Capitol Hill recently about student loans and interest rates, which led to an unsatisfying compromise in the Senate. But as part of the larger discussion, a notable lawmaker said something interesting that stood out for me.
Getting American kids into college without saddling them with massive debt shouldn’t be the government’s job, according to a prominent House Republican and possible 2014 Senate candidate. “It is not the role of the Congress to make college affordable and accessible,” Rep. Virginia Foxx (R-NC) said Wednesday morning during a committee markup of legislation that would halt federal officials from regulating for-profit educational institutions.
Foxx likened federal standards for things like the definition of a credit-hour to totalitarianism.
Well, sure, of course she did. She’s Virginia Foxx.
But it’s worth noting that there’s nothing inherently incorrect about her views on the federal role in higher education. It’s an inherently subjective question — some people believe federal policymakers have a role in making college affordable and accessible, some don’t. Foxx has her opinions on the matter, I have mine.
I’ve long hoped, however, that this generates a larger conversation about the future of the United States as a global superpower. There’s a spirited competition underway, and we have real rivals who’d be delighted to see us settle for second place. To remain on top, we’re going to need an educated workforce and electorate, and with this in mind, it makes sense if Americans were represented by a Congress that prioritized access to affordable higher-ed.
Or perhaps the nation prefers Foxx’s vision: some states will help young people get degrees; some won’t; Congress doesn’t care. Under this approach, education is of relative importance, but it’s just not a national priority.
Long-time readers have no doubt seen me mention this before, but I often think about some specific remarks President Obama made in 2009. He’d just returned from a trip to East Asia, and Obama shared an anecdote about a luncheon he attended with the then-president of South Korea.
“I was interested in education policy — they’ve grown enormously over the last 40 years. And I asked him, what are the biggest challenges in your education policy? He said, ‘The biggest challenge that I have is that my parents are too demanding.’ He said, ‘Even if somebody is dirt poor, they are insisting that their kids are getting the best education.’ He said, ‘I’ve had to import thousands of foreign teachers because they’re all insisting that Korean children have to learn English in elementary school.’ That was the biggest education challenge that he had, was an insistence, a demand from parents for excellence in the schools.
“And the same thing was true when I went to China. I was talking to the mayor of Shanghai, and I asked him about how he was doing recruiting teachers, given that they’ve got 25 million people in this one city. He said, ‘We don’t have problems recruiting teachers because teaching is so revered and the pay scales for teachers are actually comparable to doctors and other professions.’
“That gives you a sense of what’s happening around the world. There is a hunger for knowledge, an insistence on excellence, a reverence for science and math and technology and learning. That used to be what we were about.”
Right. The United States used to be about a lot of things.
But as we discussed in April, many American policymakers have shifted their focus away from insisting on excellence and towards, well, a Virginia Foxx-like attitude. Countries like South Korea and China can have their hunger for knowledge; we’ll just keep cutting education spending and hope for the best.
We’re the wealthiest country on the planet by an order of magnitude, so maybe we can just coast for a while, neglecting key priorities. Maybe we can stop looking at areas like education, energy, health care, and transportation as national problems — the way our competitors do — and can instead hope states figure something out. Someday. With some elusive resources.
Put it this way: while some countries are insisting on excellence in education, our country shrugs its shoulders while kids get thrown out of pre-schools because of budget cuts and young adults get priced out of college. Which side of the ocean is preparing for the future?
By: Steve Benen, The Maddow Blog, July 26, 2013
“Diversity Is A Faddish Theory”: According To Clarence Thomas, Affirmative Action Is Just Like Segregation
Today, the Supreme Court sent the University of Texas’ affirmative action program back for a lower court for review by a vote of 7-1.
Justice Clarence Thomas concurred in that decision but also wrote a scathing concurring opinion saying he would have rejected Texas’ affirmative action program outright as unconstitutional.
In the opinion, which no other justice joined, Thomas called the idea that racial diversity at colleges improves education a “faddish theory.”
“As should be obvious,” wrote Thomas, “there is nothing ‘pressing’ or ’necessary’ about obtaining whatever educational benefits may flow from racial diversity.”
Thomas repeatedly compared arguments for affirmative action in college admissions today to arguments for segregation in the 1950s and before. Here’s Thomas:
It is also noteworthy that, in our desegregation cases, we rejected arguments that are virtually identical to those advanced by the University today. The University asserts, for instance, that the diversity obtained through its discriminatory admissions program prepares its students to become leaders in a diverse society… The segregationists likewise defended segregation on the ground that it provided more leadership opportunities for blacks…
There is no principled distinction between the University’s assertion that diversity yields educational benefits and the segregationists’ assertion that segregation yielded those same benefits.
He went on to associate his view with the arguments made by the plaintiffs in Brown v. Board of Education, the 1955 decission that prohibited racial segregation in public schools:
My view of the Constitution is the one advanced by the plaintiffs in Brown: “[N]o State has any authority under the equal-protection clause of the Fourteenth Amendment to use race as a factor in affording educational opportunities among its citizens.”… The Constitution does not pander to faddish theories about whether race mixing is in the public interest. The Equal Protection Clause strips States of all authority to use race as a factor in providing education. All applicants must be treated equally under the law, and no benefit in the eye of the beholder can justify racial discrimination.
Thomas also wrote that universities’ arguments about promoting diversity are canards and their real goal with affirmative action is to help black and Hispanic students—but that they’re not actually helping.
He wrote that “discrimination is never benign” and “the University’s professed good intentions cannot excuse its outright racial discrimination any more than such intentions justified the now denounced arguments of slaveholders and segregationists.”
Thomas made two arguments that affirmative action hurts black and Hispanic students: It leads to them being admitted to schools where they have, on average, significantly lower SAT scores than white and Asian students; and it creates an impression (both internal and external) that their admissions are not based on merit.
Given the high bar that Thomas places for allowing any public policy that discriminates based on race, this policy analysis wouldn’t matter for the constitutionality of the Texas program.
By: Josh Barro, Business Insider, June 24, 2013
Interest rates on student loans will double on July 1 unless Congress acts. Since the phrase “congressional action” has become an oxymoron, this will quickly degenerate into an unnecessary crisis, requiring parents and students to threaten their legislators to get any relief.
Why is action even a question? There is a universal consensus — left, right and center — that it is vital to our nation to educate the next generation. If we want to compete as a high-wage, high-skill country, our children will need the best in college or advanced technical training. And all agree that gaining that higher education is a necessary, if not sufficient, requirement for entering the middle class.
So just as we pay for public education for kindergarten through 12th grade, we should ensure that advanced training or a public college education is available for all who earn it. None of this is even vaguely controversial.
Yet, despite this consensus, we are pricing college out of the reach of more and more families. State support for public universities has lagged. Increasingly, the costs have been privatized, with the bill sent to students and families.
With incomes stagnant for all but the wealthy few, the result, not surprisingly, has been an explosion of student debt. U.S. students and parents now owe an estimated $1.1 trillion in student loan debt, a sum greater than credit card or automobile debt. In 2005, average student loan debt was just over $17,000. By 2012, it was above $27,250, increasing more than 50 percent in just seven years.
With the debt burden rising and good jobs scarce, the result is calamity. Thirty-five percent of millennials — debtors under 30 — are seriously delinquent on their payments. In total, delinquent student debtors on the verge of default owe $113 billion, more than the total sums state governments spent on higher education in 2012.
The young people who do everything we ask of them — study, graduate, go on to higher education — end up deep in a hole. Burdened by debt, they have a hard time affording cars or apartments. Starting a family becomes difficult, a down payment on a home an impossible dream. This not only crushes the dreams of our best young people; it puts a real damper on the economy.
This isn’t complicated. Washington should be moving boldly to make advanced education affordable for all. The federal government should be increasing grants to states for public colleges, on the condition that the states increase their own contributions and act to curb college costs. The government should crack down on private colleges that ripoff students. And of course, college expenses should be subsidized so that successful young people don’t graduate into debtor’s prison.
But common sense is an endangered species inside Washington’s beltway. Interest rates on federally subsidized Stafford loans are about to double to 6.8 percent. Republicans have passed a “solution” that pegs loan rates to the rate of a 10-year Treasury note plus an arbitrary 2.5 percent. (Or plus 4.5 percent for parental PLUS loans). Loans fluctuate each year with interest rates, with a cap of 8.5 percent for student loans and a stunning 10.5 percent for parental loans. Kids will end up paying more, while the government will make billions on the deal for deficit reduction. But we should be subsidizing the next generation to get the education they need, not making money off of them.
President Obama’s plan isn’t much better. He sets the rate at the 10-year Treasury note rate plus .93 percent for subsidized Stafford loans (3.93 percent for parental loans) with no cap. He does call for limiting what students have to pay to 10 percent of their income, insuring that students aren’t condemned to bankruptcy. His plan is “budget neutral.”
Sen. Elizabeth Warren (D-Mass.) has offered a plan that makes a lot of sense. She suggests we offer students the same rate that the Federal Reserve charges to big banks (about .75 percent) for the next year, while Congress gets serious about a permanent fix. Senators Tom Harkin (D-Iowa) and Jack Reed (D-R.I.) suggest that the Congress do the easy thing, simply extend the current rates for two years, paying for it with the closing of various loopholes.
Sen. Kirsten Gillibrand (D-N.Y.), like Warren, also makes sense. She would allow students and graduates to refinance into fixed 4 percent loans.
Is it any wonder that Americans grow cynical? Multinational corporations and wealthy investors stash literally trillions abroad to avoid taxes. The big banks rake in trillions in subsidies and discounted loan rates to rescue them from their own excesses. But Congress finds it impossible to make it affordable for the next generation to get advanced education and training.
As always, common sense won’t come to Washington unless citizens mobilize to force it on Congress. With graduations marked by student demonstrations across the country and pickets outside of Sallie Mae, the giant student loan bank, that movement may have begun. Student loans may be to this generation what the draft was to the boomers – the government folly that afflicts them personally and rouses them to act.
By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, June 5, 2013