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Some Economists Challenging View That Schools Hurt Competitiveness

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By Jonathan Weisman

Contrary to popular thinking, skills shortages among high-school graduates are not primarily to blame for the dwindling competitiveness of the American workforce, a growing number of scholars are arguing.

Indeed, the United States will not need huge numbers of highly skilled workers in the future unless substantial changes are made in government policies and corporate practices that have almost nothing to do with schools, these scholars assert.

This revisionist theory of the relationship between schools and economic productivity flies directly in the face of a national school-reform movement that has been based largely on the need to make the United States more competitive abroad.

Ever since A Nation at Risk proclaimed that a "rising tide of mediocrity... threatens our very future as a nation and as a people,'' it has been vitually taken as a given that improvements in the education system were needed to keep America's "slim competitive edge... in world markets.''

Now, a new "think tank'' war about what is causing the country's economic ailments may be forcing some educators and policymakers to reevaluate just how important education is to the nation's future economic growth, and whether educators are setting themselves up for failure by promising what they cannot deliver: namely, an internationally competitive workplace.

"This has had a major effect already on education policy and will continue to have a major effect," said Russell W. Rumberger, an associate professor of education at the University of California at Santa Barbara. "I don't think anyone would say schools don't need attention and work. It's a question of relative importance."

Although there are advocates on the far sides of the debate, most now concede that both business and education must change to address the nation's economic malaise.

No one is arguing that a highly skilled workforce is not desirable, if Americans want to maintain a high standard of living. And no one is claiming that improvements in education are unnecessary.

But many would place less emphasis on education as the sole savior of the American workforce.

Blaming the Schools

The revisionist view holds that business management has stubbornly refused to transform the workplace and has chosen instead to avoid its responsibilities by blaming the schools.

If current trends continue, advocates of this new line of thinking say, low-paying service-sector jobs will proliferate at the expense of technical manufacturing positions and management posts, and American business will continue to lose out to foreign competitors.

Instead of taking steps to tackle the problems directly in the workplace, revisionists argue, businesses have found it easier to deflect blame by pointing the finger at inadequacies in the nation's schools.

"Are the schools responsible for the management decisions that kept Detroit turning out self-destructing gas guzzlers until it lost its dominance of the market?" Gerald W. Bracey, an education researcher, asked in an essay published in last month's Phi Delta Kappan magazine. "Did the schools' sloppy pedagogy prevent industry from automating until it was too late?"

Mr. Bracey resigned last week from the National Education Association. (See related box, this page.)

Revisionists also claim that politics is behind the stubborn adherence by many to the traditional view that the schools are failing American business.

Successive Republican administrations, as well as numerous state politicians, have embraced the orthodoxy because they have been uncomfortable with pressuring businesses to reorganize their workforces and retrain their workers, revisionists argue.

Instead, they say, politicians and policymakers can look as though they are going on the offensive by advocating education reform. And, at the same time, they can avoid the much stickier political question of whether the nation needs a more aggressive industrial-technology policy.

Education has been "an avenue of convenience," the revisionists contend, because it entails very little in the way of federal policies or investment.

The trouble is, they say, that, unless business changes, efforts to improve the educational system will produce a mismatch between what is needed in the marketplace and a supply of overqualified workers.

"Until you have investment in job creation and workplace transformation, you're just whistling in the dark to focus on workforce improvement," said Ivar Berg, a professor of sociology at the University of Pennsylvania.

Statistical Support

Revisionists point to a host of statistics and other indicators to make their point.

In a report published last summer, for instance, the Economic Policy Institute disputed projections of impending labor and skill shortages.

Instead, it concluded, the growth in highly skilled jobs has halted, while education has been promoted on the policy agenda at the expense of more direct economic investment.

"An intelligent labor policy would create skilled jobs, not expect them to happen by themselves," said Lawrence Mishel, who co-authored the report with Ruy A. Teixeira. "I can't support the 'blame the worker, blame the schools' analysis."

The E.P.I.'s report, "The Myth of the Coming Labor Shortage," said occupational-skills upgrading will raise wages by about 0.4 percent over the next 12 to 14 years. If wages are an indication of skill level, then there will be no "upskilling" of the workforce, the report concluded.

At most, 30 percent of the new jobs created between 1984 and 2000 will require a college degree, compared with 22 percent of the jobs created in 1984, the report estimated.

The rest of the jobs will show almost no increase in the skills required, according to the study.

In fact, the E.P.I. study stated, the slight overall increase in the job skills required for the next 10 years would only necessitate a total of 0.4 extra years of schooling over the next 10 years.

"People who still use [the generally accepted] rhetoric are increasingly uncomfortable with it because they see what's going on around them," Mr. Mishel said. "If you ask someone in the Midwest if they see an explosion of high-tech jobs, they'd say, 'No, are you crazy?'"

The Value of Retraining

In another study, a team of researchers at the University of California at Los Angeles concluded that California's educational system had not caused the bulk of the state's economic misfortunes.

The study of high-technology industries in California suggested that the state must try to solve its economic problems through changes in government economic policies, not through changes in the schools.

To make its point, the study, published last month, noted that New United Motors Manufacturing Inc., a General Motors-Toyota joint venture in Fremont, Calif., rehired and retrained laid-off G.M. workers in 1984 to build an auto plant as productive as any in Japan.

Noting that G.M. had deemed the workers "the worst in the country" in the early 1980's, the study argued that the experience at the Fremont plant provides evidence that workforce retraining and new management styles can make up for employees' educational shortcomings.

Revisionists also point to a study by a U.S. Labor Department researcher that concluded that the growth in high-skills jobs will stagnate in this decade, while employment in fast-food restaurants, small retail stores, and service establishments will continue to grow.

The study, conducted by Ronald E. Kutscher, an economist at the Bureau of Labor Statistics, and published in the journal Educational Evaluation and Policy Analysis last month, also found that the value of a college degree is likely to decline, leading to a growing number of people working in jobs for which they are overqualified.

Between 1983 and 1988, the study noted, the number of college graduates working as sales clerks increased from 485,000 to 568,000; those working as secretaries, stenographers, and typists rose from 434,000 to 475,000; and those working as bartenders, waiters, and waitresses went from 119,000 to 125,000.

Several studies and surveys have also reached the conclusion that American business is not moving quickly or enthusiastically enough to embrace the kinds of changes needed to create high-skills jobs.

In a report commissioned by the Labor Department and released last month, the American Society for Training and Development concluded, among other findings, that the growing understanding of what it takes to compete has so far outstripped its acceptance in the workplace.

Concurring on that point, a poll released in late September by Lotus Harris & Associates showed "a limited willingness of [the business community] to provide support to make up for the shortfalls in the education system." Just 14 percent of 402 corporations surveyed said they had job-training programs that teach basic academic skills, and 67 percent said they had made no major shifts to respond to changes in competitiveness demands.

The Orthodoxy

But despite the growing number of adherents to the revisionists' line of thinking, most observers say the original analysis that high-skills jobs will proliferate in the future still holds sway.

"The majority opinion happens to be correct in this case," said Marvin Kosters, the director of economic policy studies at the American Enterprise Institute.

That position, now considered the orthodoxy, holds that businesses cannot compete internationally because an ill-trained workforce has prevented them from improving productivity by adopting high-technology manufacturing or changing management to stress assembly-line decisionmaking and teamwork, rather than traditional, routine mechanization.

The position also contends that the demand for high-skills jobs will respond to the supply of high-skilled labor, and that, because the education system has not produced enough highly skilled workers, the schools are largely to blame for the nation's competitiveness problems.

Adherents to the theory that the labor supply is key--including the powerful business lobby and many politicians--have used it to raise education to the top of the nation's domestic priority list.

"Employers would choose the high-skill, high-wage track [to economic development] if the education system allowed it," asserted Arnold Packer, who in 1987 co-wrote a ground-breaking study, "Workforce 2000," that in essence codified the orthodox position.

The study, conducted by the Indianapolis-based Hudson Institute, also predicted an explosive growth in high-technology, professional, and managerial jobs during the 1990's.

The explosion, concluded the study, would produce severe shortages in qualified workers and management unless the nation's education system was shored up. It largely ignored issues of workplace training or investment.

Workforce 2000 Role

Since the release of "Workforce 2000," the call for education reform in the name of improving business productivity has been embraced by a coalition of business leaders, politicians, and labor policymakers who together have created an unprecedentedly loud voice, observers agree.

The U.S. Secretary of Labor, they note, is as apt to talk about education on a given day as is the U.S. Secretary of Education.

"Workforce 2000' has gotten imbedded in the American psyche in an incredible way," said Marion Pines, a researcher at Johns Hopkins University. 'given the man on the street has in his mind an impending skills gap and workforce shortage."

And, like the revisionists, supporters of the more traditional point of view can point to a number of studies and statistics to help make their case.

In a study released last month, for instance, John H. Bishop and Shani Carter, both researchers at Cornell University, argued that the number of high-skills jobs will proliferate this decade.

Unless steps are taken to improve the educational system, they argued, business will be faced with shortages of skilled workers.

To make their point, the researchers noted that professional, technical, and managerial jobs, which accounted for 24.9 percent of the nation's jobs in 1978, made up 52 percent of the job growth between 1978 and 1989.

High-level sales representatives and sales manager posts accounted for another 10 percent to 11 percent of the job growth, according to the study, published in last month's issue of Educational Evaluation and Policy Analysis.

Moreover, the study predicted that managerial, professional, and technical positions will account for 69.8 percent of the job growth between 1988 and 2000. Such low-skills positions as operators, laborers, and service employees will account for only 1.9 percent of the growth.

The Bishop-Carter study also pointed out that wages for college-educated technicians and professionals rose substantially between 1983 and 1989, while the wages earned by high-school graduates fell.

The result, the researchers noted, is that the ratio between wages for workers with a college degree and

those with a high-school diploma is at an all-time high.

Adherents to the idea that a supply of highly skilled workers will fuel competitiveness say that this wage ratio shows that the demand for highly trained workers is already much in evidence, and Mr. Bishop contends that shortages of college-educated workers will heighten in the 1990's.

Agreed Mr. Kosters of the American Enterprise Institute: "The U.S. economy has already shown a tremendous capability of making use of more skills and more schooling."

The Middle Ground

The middle ground, favored now by many business associations and policy analysts, holds that workforce conversion and educational improvement must occur simultaneously.

Contrary to revisionist assertions, the level of skills needed in the workplace is rising slowly, the centrists say, but not explosively, as the orthodox position contends.

Most centrists, including many who once adhered to the orthodoxy, say business has been too quick to blame education and has been disappointingly reluctant to admit its own shortcomings.

"America's Choice: High Skills or Low Wages," an influential 1990 report by the Commission on the Skills of the American Workforce, found only 5 percent of U.S. companies had substantially reorganized their workplaces.

"All of us are better at suggesting that someone else cut their grass rather than cutting our own," said William Brock, a former U.S. Secretary of Labor and co-chairman of the commission. "Business is now using the schools, saying 'We haven't changed because of the inadequate product coming from the schools,' when it could be just the opposite, that schools are just responding to demand."

The conflicting positions have emerged because the data on which they are based have been taken at different points in time, according to Frank Levy, an economist in the University of Maryland's school of public affairs and a centrist in the debate.

Henry Levin, a professor of economics at Stanford University's school of education, for example, said the Bishop-Carter study overstated projected workforce needs of the 1980's by starting at the bottom of a recession and ending at the top of a recovery.

"Look what has happened in the last two years to recent college graduates," Mr. Levin said. "There is tremendous restructuring going on, [with] banks, investment firms, and other companies cutting management, professions feeling they have to make real changes by cutting back, and that's not just a function of the recession."

Marc Tucker, president of the National Center on Education and the Economy, said he thinks the argument over the data "amounts to a silly debate."

"What it boils down to is that the composition of the labor force at some point in the future depends on the decisions people make now," he added, "not on projections people make now."

Impact on Education Policy

Both sides of the debate are quick to point out the policy ramifications for education.

Supporters of the orthodox position maintain that no facets of the education system are performing adequately. They want the skills of all students in the system to improve dramatically, and they would like to see a growing number of students pursue advanced degrees.

The revisionists would focus attention on improving the performance of the poorest achieving student populations and leave it up to business to train the middle and upper tiers of the nation's graduates for their positions in the economic world.

Mr. Bishop of Cornell, for example, focuses on the need for more college-educated workers, saying that K-12 policy should encourage a college track, and that higher-education policy should aim at providing more financial aid, keeping tuition low, and getting students through college quickly, with more Advanced Placement courses in high school and more summer school in college.

Mr. Levin of Stanford, on the other hand, says such policies would have all the wrong effects. By focusing on higher education, Mr. Levin said, such policies would raise the ceiling of educational achievement rather than lift up the floor.

The view of education propounded by the Bush Administration that nearly all schools have failed has diluted education-improvement efforts that should be targeted at where the real failures have occurred: among the peorest third of America's students, Mr. Levin added.

"There is a portion of America that is undereducated," Mr. Levin said. "By any measure, they are not going to be prepared for work." But, he said, case studies of plants that have modernized prove that the middle third are perfectly capable of handling advanced production methods given the proper training.

Even studies sympathetic to the orthodox position, such as a 1989 report by the Massachusetts Institute of Technology Commission on Industrial Productivity, have stated that specific workplace training, such as that done in Japan and Germany, is far more efficient and effective than school-based vocational education.

And the top third, according to revisionists, are doing just fine in workplace performance.

Reluctant Educators?

Mr. Mishel of the Economic Policy Institute concurred, saying that schools should not stress the lofty goals of "being first in mathematics and science by the year 2000" when the real workforce-skill requirements revolve more around basic numeracy, literacy, and the ability to work cooperatively.

Many observers agree that educators will be reluctant to embrace revisionist ideas.

While they have not enjoyed what many term the "education bashing' that has sometimes gone along with the orthodox position, educators have basked in the attention it has given their field. Although revisionists do not say education is unimportant, educators fear that implication.

"Everyone has subscribed to the argument for investing in human capital [through the schools]," Ms. Pines of Johns Hopkins noted. 'and even if it isn't true, we don't want to surrender it."

"We have to go on the assumption that the greatest resource we have in this country is our people," she added.

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