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Education, education, education…

April 23rd, 2009 · 3 Comments

We like evidence based policies (instead of the ideologically informed ones). No more so than on education, an issue most dearest to our heart and most underestimated in the economic debate. Here is some very important evidence…

Swimming Without a Suit
Published: April 21, 2009

Speaking of financial crises and how they can expose weak companies and weak countries, Warren Buffett once famously quipped that “only when the tide goes out do you find out who is not wearing a bathing suit.” So true. But what’s really unnerving is that America appears to be one of those countries that has been swimming buck naked — in more ways than one.

Credit bubbles are like the tide. They can cover up a lot of rot. In our case, the excess consumer demand and jobs created by our credit and housing bubbles have masked not only our weaknesses in manufacturing and other economic fundamentals, but something worse: how far we have fallen behind in K-12 education and how much it is now costing us. That is the conclusion I drew from a new study by the consulting firm McKinsey, entitled “The Economic Impact of the Achievement Gap in America’s Schools.”

Just a quick review: In the 1950s and 1960s, the U.S. dominated the world in K-12 education. We also dominated economically. In the 1970s and 1980s, we still had a lead, albeit smaller, in educating our population through secondary school, and America continued to lead the world economically, albeit with other big economies, like China, closing in. Today, we have fallen behind in both per capita high school graduates and their quality. Consequences to follow.

For instance, in the 2006 Program for International Student Assessment that measured the applied learning and problem-solving skills of 15-year-olds in 30 industrialized countries, the U.S. ranked 25th out of the 30 in math and 24th in science. That put our average youth on par with those from Portugal and the Slovak Republic, “rather than with students in countries that are more relevant competitors for service-sector and high-value jobs, like Canada, the Netherlands, Korea, and Australia,” McKinsey noted.

Actually, our fourth-graders compare well on such global tests with, say, Singapore. But our high school kids really lag, which means that “the longer American children are in school, the worse they perform compared to their international peers,” said McKinsey.

There are millions of kids who are in modern suburban schools “who don’t realize how far behind they are,” said Matt Miller, one of the authors. “They are being prepared for $12-an-hour jobs — not $40 to $50 an hour.”

It is not that we are failing across the board. There are huge numbers of exciting education innovations in America today — from new modes of teacher compensation to charter schools to school districts scattered around the country that are showing real improvements based on better methods, better principals and higher standards. The problem is that they are too scattered — leaving all kinds of achievement gaps between whites, African-Americans, Latinos and different income levels.

Using an economic model created for this study, McKinsey showed how much those gaps are costing us. Suppose, it noted, “that in the 15 years after the 1983 report ‘A Nation at Risk’ sounded the alarm about the ‘rising tide of mediocrity’ in American education,” the U.S. had lifted lagging student achievement to higher benchmarks of performance? What would have happened?

The answer, says McKinsey: If America had closed the international achievement gap between 1983 and 1998 and had raised its performance to the level of such nations as Finland and South Korea, United States G.D.P. in 2008 would have been between $1.3 trillion and $2.3 trillion higher. If we had closed the racial achievement gap and black and Latino student performance had caught up with that of white students by 1998, G.D.P. in 2008 would have been between $310 billion and $525 billion higher. If the gap between low-income students and the rest had been narrowed, G.D.P. in 2008 would have been $400 billion to $670 billion higher.

There are some hopeful signs. President Obama recognizes that we urgently need to invest the money and energy to take those schools and best practices that are working from islands of excellence to a new national norm. But we need to do it with the sense of urgency and follow-through that the economic and moral stakes demand.

With Wall Street’s decline, though, many more educated and idealistic youth want to try teaching. Wendy Kopp, the founder of Teach for America, called the other day with these statistics about college graduates signing up to join her organization to teach in some of our neediest schools next year: “Our total applications are up 40 percent. Eleven percent of all Ivy League seniors applied, 16 percent of Yale’s senior class, 15 percent of Princeton’s, 25 percent of Spellman’s and 35 percent of the African-American seniors at Harvard. In 130 colleges, between 5 and 15 percent of the senior class applied.”

Part of it, said Kopp, is a lack of jobs elsewhere. But part of it is “students responding to the call that this is a problem our generation can solve.” May it be so, because today, educationally, we are not a nation at risk. We are a nation in decline, and our nakedness is really showing.

Tags: Public Policy · The World according to Economics

3 responses so far ↓

  • 1 J Jordan // Apr 24, 2009 at 6:58 am

    Mr. Friedman has several good points, however, his “hope” that Obama will improve education? That seems to me the same hope that a damsel in distress in a dark London alley would have when her cries are ‘answered’ by Jack the Ripper. If PrezBO does the same for education that he is doing for the economy, then, education is in for much lower grades indeed.

    It is becoming clear that the decades old goal of merging the USA into a single world economic unit is coming to fruition by the destruction of the Dollar. This disaster has been accomplished by first destroying the American education system. John Dewey, Father of Modern Progressive Education, said that his goal was that, ultimately, he did not care if students learned to read and write, he wanted to separate them from the beliefs of their parents. Today, the American public has been dumbed down to the point where half the population believes that prosperity can be created out of thin air. Today, graduates from the US education system are stupid AND immoral. Thanks, Mr. Dewey! The Federal government has waged an undeclared war against our own prosperity for years. They have passed anti-US manufacturing legislation, such as NAFTA, that has transferred US manufacturing away from our shores. As investors, most of us understand that prosperity is accomplished through hard work, a little risk, and a little good fortune. Most of us (if we graduated from school 30 years ago) know that a perpetual energy machine does not exist in reality. However, the guys now manipulating the economy either believe in the perpetual energy machine or they do indeed have plans to wreck the dollar.

    One can believe in efficient big government or Santa, the Tooth Fairy, etc. But, really, where do Santa’s toys come from in reality? Doesn’t someone really pay for them? If not, then let the good times roll! And, get ready for higher test scores, too!

  • 2 admin // Apr 24, 2009 at 7:45 am

    While we sympathize with some of your comments (see for instance our introductory comments to another Friedman article:, we don’t see ANY alternative for the present massive stimulus to the economy, really (and have argued that point here since the inception of the crisis on numerous occasions). The alternative is an economy falling off a cliff, really.

  • 3 admin // Apr 24, 2009 at 8:15 am

    If you think no massive stimulus and money creation is needed you really have to read tomorrow’s editorial in the Economist…