Commentary

A Voucher Plan For Workers

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Almost all of the recent efforts to reform education to meet economic needs have been focused on the schools. But most of the people who will be in the workforce at the turn of the century are there now. Millions of these workers lack the education they need to justify the relatively high wages they earn in the international labor market. If their skills do not improve substantially, their wages, and America's standard of living, will fall. Neither the states nor the federal government has a coherent set of policies to deal with this critical problem.

The scale of the need is staggering. Massive improvements in the educational attainments of workers are necessary, but massive increases in funds to meet the requirement are unlikely to be forthcoming. It is time for radical departures in policy approaches. In the first instance, the states would be well advised to begin by asking how to create very strong incentives for service providers to perform at very high levels of quality at the lowest possible cost to the taxpayers. The states should offer rewards to education providers not on the basis of enrollments or "seat time," but rather on the criterion of students' performance against specified standards. The greatest resources should be directed to those students who need them most.

For decades, education and training policy has been access-oriented and based on design criteria. Focused on granting greater access to educational services for increasing numbers of people, policy has been concerned with establishing rules telling providers what services to offer and how to provide them. The alternative to such design criteria is performance criteria. In a performance-oriented environment, the buyer specifies to the provider only the standards the product must meet if the provider is to be paid. In working to meet those standards, the provider decides which services will be offered and what means will be used to provide them.

Policies emphasizing access in education have made a vital contribution to fairness and justice. When access-oriented systems are regulated according to design criteria, however, providers have strong incentives to increase the unit cost of service and weak incentives to provide high-quality service. Once access has been provided to the system, providers have little incentive to direct the most valuable resources to those who need them most. While protected populations must be served, and served well, the state must ensure not only that the service provided meets the state's standards, but also that the provider has strong incentives to render that service as efficiently as possible.

We propose an education and training strategy that, while neutral with respect to the source of funds, has the dual advantage of being both performance-based and market-oriented. It draws for inspiration on a notion first advanced by Philip Power of the Suburban Community Corporation, but we should be held accountable for whatever deficiencies this particular proposal might have. Our plan addresses the most serious current problem in workforce quality: the need to turn a low-skilled blue- and pink-collar workforce into the core of a high-skill competitive strategy.

Report after report shows that many of those who have entered our workforce with a high-school education or less are illiterate or barely literate. Few of our blue- and pink-collar workers have the education required if the country is to adopt a broadly based high-skill, high-tech competitive strategy. Success depends on a massive upgrading of the skills of American hourly workers.

Under our plan, each state would first involve its business community in defining an educational standard for entry-level work in modern business and industry. That standard would have to go beyond being able to read and write a simple sentence and do arithmetic; our competitors' workers arealready well beyond that level of basic skills. The standard should demand that prospective employees show that they can think on their feet, speak and write well, exercise sound judgment in complicated situations, and draw on a thorough understanding of mathematics, science, and other subjects to find a path through a tough problem when there is no single right solution.

The state would then, as a matter of policy, make a voucher available to every public- and private-sector employee in the state, conveying the right to an education that would bring them up to that standard, at state expense. The employee could take the voucher to any provider of educational services the employee chose that would accept him as a student. Schools, colleges, and other traditional educational institutions could be expected to compete for these students, but so might the employer, the employee's union, or other community-based organizations.

The provider of educational services would not be fully paid for those services, however, unless the student were able to pass a test administered by the state. A student who passed the test would be issued a certificate showing that the state standard had been met.

Because some workers would be harder to educate than others, certificates would have to have different cash-in values, to be determined by the state through the establishment of standard criteria and the use of a diagnostic test. A model for this facet of the plan might be drawn from the experience of some states with weighted formulas for school finance, which provide additional funds for students who come from low-income families, are learning-impaired, do not speak English, and so on.

Since the voucher would be available to anyone in the labor market beyond the state age for compulsory education, high schools would have to compete to retain many of their students. Some postsecondary institutions would find their enrollments falling if they did not compete effectively for students seeking these certificates.

In their desire to reduce as much as possible the cost of instruction, all providers would have a strong incentive to diagnose accurately workers' learning problems and to tailor learning programs to their requirements. Because payment would depend on results, fly-by-night providers would have little to gain by entering this market. Established institutions that have failed in the past to provide a high-quality education would be in deep trouble.

The era of measuring educational attainment by the time the student spends in the seat would be over. Studying with the knowledge that educational standards represented employers' requirements for the jobs of the future, workers would be more highly motivated than they are now to pursue an education. The taxpayer could feel confident that value would be received for every nickel spent. The biggest gainer would be the public at large; the country can only become progressively poorer if it does not find a way quickly and significantly to raise the educational level of its wage earners.

If properly designed, this strategy would address the needs of the employed and the unemployed alike. It would not, however, be a good vehicle either for supporting the training--as opposed to education--of hourly workers now on the job, or for improving the skills of professional, technical, and managerial workers.

Polaroid's experience suggests that effective basic-education programs in the workplace depend for their success on a visible, believable commitment by the firm. To support an education program like this one, employers might take such steps as the following:

The firm will advance employees who acquire specified skills.

It will set up learning environments quite unlike those in which these employees have failed to be educated in the past.

It will work with the employees, their families, and friends to overcome the stresses that occur when people start to value education and thereby alienate those close to them who do not.

The firm will work with supervisors to make sure that they treat workers who have managed to acquire the needed skills differently than they do those who have not.

Extending well beyond the provision of courses in the basic skills, these requirements will demand the careful integration of education, training, and social services in a nontraditional package.

This proposal produces competition for the public schools, which they badly need. For students who would have completed high school but go on early to postsecondary institutions at public expense, the state saves money. The need for duplicate facilities is reduced. Appealing particularly to students who are bored and alienated by secondary school, the program would motivate those who might otherwise drop out of school altogether. In this way it would reduce the remediation and dependency bill by an unknown amount.

The Minnesota "postsecondary options" plan, which provides that students in that state who have passed the age of compulsory education may attend public postsecondary institutions at public expense, should be regarded as the precursor of more ambitious policies.

Some will object to this proposal because it gores their institutional ox. Some will maintain that they find it attractive but unworkable. Some will assail it because it does not correspond to their definition of the problem. But the fact remains that, without massive improvements in the skills of America's line workers, the capacity of our economy to provide a decent standard of living for all Americans is in jeopardy. Those who do not like this proposal should feel an obligation to develop one that will work as well or better.

Vol. 7, Issue 5, Page 32

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