“Just out: Economic Report of the President. If you aren’t alarmed, you aren’t paying attention” read a tweet that cascaded down my screen. The good dean is not known for hyperbole, so I indeed paid attention.
The Economic Report of the President is an annual report written by the Chair of the Council of Economic Advisers. It’s an incredibly comprehensive document measuring the nation’s economic progress, and ultimately serves as a guide for the Administration’s domestic and economic policies.
Think there’s anything about education in there? Better believe it. Bits of K12’s past, present, and future are embedded. That’s because—as much as it pains us to admit—education and business are inextricable. There are very smart people who disagree, but I often worry that we’re not doing enough to connect the two. Nevertheless, whether we choose to include future workforce preparation in our own educational philosophy or not, let’s take a look at how it fits into this year’s report.
The ghost of education’s past rears its head in the chart below, which shows unemployment rates for whites, blacks, Hispanics, and Asians. Unemployment for whites has actually been on the decline since October 2009, peaking at 9.4 percent. In contrast, the rate for blacks and Hispanics continues to rise—last measured at 16 percent and 13 percent respectively. Interestingly, the unemployment gap, like the the achievement gap, remains largely unchanged since 1990. Perhaps there’s a relationship between the two.
The report also cites the sectoral shifts currently changing the nature of work—and how the “Great Recession has aggravated this already challenging trend.” It further reads, “the United States is increasingly a knowledge-based society where workers produce services using analytical skills. The changing economy offers tremendous opportunities for American workers in high technology, in the new clean energy economy, in health care, and in other high-skill fields.”
The less-sexy part of this phenomenon doesn’t sell as many books or warrant as many educonference presentations: The labor *market* is also changing. As stated in the report, “The prototypical American career once involved working for a single employer for many years, backed by a union that bargained for steady wage increases and for a pension that promised a stable, guaranteed income in retirement.” Now, however, “fewer than one in seven workers belongs to a union, and most people can count on changing employers several times over their careers.” That trend is also expected to continue
What’s the problem? Retirement. Most pension plans now are “defined contribution“—meaning only employer contributions to the account are guaranteed, not the future benefits. In other words, an individual who’s not financially savvy is screwed.
The educational attainment-to-income data are also there, which most of us have seen before. But, just in case you haven’t: Simply, the more education someone has, the more money they’ll make.
What’s more striking is this chart:
For many years, there were more educated workers than demand for them. But, as the trend stagnated, younger generations weren’t graduating at higher rates than older generations. The trend led to income inequalities simply because a lower supply of college educated workers increased wages for high-skill jobs, subsequently dropping pay for lower-skill jobs needing less education.
A continuance of this trend will affect us more than we often consider. The economics of education go beyond preparing children for the workforce, or even maintaining economic superiority. Malcolm Gladwell describes the concept of the dependency ratio in this classic New Yorker piece. What do you think the U.S. dependency ratio will look like when Baby Boomers retire? Heathcare reform might help, but it’s not a fix. Neither is education—at least not in it’s current state.
In the end, Dean Bruner and I were likely looking at this report through very different lenses, but his warning still rings true. Education, like our economy, is in a period of transition. Policy debates are raging across the country and even across my own state. Politicization creates false dichotomies and we must maintain the ability to see the gray area. We owe it to the next generation—in more ways than we realize.