Published Online: December 29, 2006
Published in Print: January 4, 2007, as A Continuum of Necessary Investments for Learning

A Continuum of Necessary Investments for Learning

Business, the U.S. education system's prime consumer, sees a need for schools to think outside the traditional K-12 box.

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Charles Kolb

While preparing to write this essay, I picked up the Oct. 2, 2006, issue of the Financial Times and found, on Page 4, an article with the following headline: “Young U.S. Business Recruits Lack ‘Basic Skills’ in English.” The article reported results from a survey of more than 430 business leaders, conducted by the Conference Board and the Society for Human Resource Management, that reflected a concern that our country might be “losing its competitive edge to economies such as India and China.”

How is it that so many of America’s young people can pass through the K-12 education system and end up incapable of understanding basic English grammar and math? According to the survey, moreover, nearly 30 percent of employers questioned “doubted their college-graduate employees could write a simple business letter.” With all the money our country spends on education, such findings suggest that we are making poor investments and need to rethink the whole endeavor.

As we continue to determine how best to handle the economic and human challenges of globalization, we should recall that the country’s greatest strength is its people. The American education system—at every level and through every phase of development, from the early years through college and other postsecondary learning—needs to be reconsidered to determine how we can most effectively use our resources to enhance the learning and capabilities of our young people. Merely thinking we are great or competent is not enough—and is irrelevant, if the facts and the competition suggest otherwise.

Nor is it acceptable at this critical juncture simply to say that we need to spend more money on education. Before we devote additional resources to any aspect of American education, we need to rethink the deployment of our current resources at all points along the education continuum. If our goal is to enhance the country’s human-capital development, we need to think about the expenditure of every education dollar as a dollar invested, not a dollar wasted.

This effort will not be easy. As a country, we have considerable difficulty addressing these “front end” investment issues. Virtually everywhere you look on the policy front, Americans find it extremely hard to make sound investment decisions now that will yield important payoffs in the future. Consider the following examples:

• We talk about the demographic challenges of an aging workforce, and yet we fail to tackle Social Security reform and health-care reform.

• We have urgent fiscal problems created by triple deficits—in trade, in personal savings, and in national savings—and yet we continue as if none of this matters in terms of global competitiveness or the value of our currency.

• Not enough young people in America take the time to invest in learning a critical foreign language, and yet we now know that our foreign-language deficiencies go beyond education and have serious implications for our economic security, our national security, and the effectiveness of our public diplomacy.

• We fail, as a country, to invest sufficient resources in publicly funded early education, while deciding instead to spend billions of dollars on remediation in subsequent years.

Many business leaders know that if there is a problem in producing a service or a commodity, you address that problem as soon as you discover it, and preferably at the front end of the process. You don’t wait until it becomes an even greater problem down the line. The same principle should apply to how we invest in early education.

During the last five years, the Committee for Economic Development has been the leading business organization supporting investments in early education. In 2002, we released our first report on the topic, “Preschool for All: Investing in a Productive and Just Society.” That report was among the first from a business group to endorse free, optional, high-quality preschool education for all children age 3 and over who had not yet entered kindergarten.

Last summer, the CED released its newest report, “The Economic Promise of Investing in High-Quality Preschool: Using Early Education to Improve Economic Growth and the Fiscal Sustainability of States and the Nation,” which focused on providing additional in-depth economic research about the returns on investments in early education. We believe that all children in this country deserve the opportunity to start school ready to learn, both mentally and physically. Moreover, other industrialized countries have recognized that both a child’s future and the nation’s economic future increasingly depend on giving children a strong start.

Many other industrialized nations, including economic competitors such as France, the United Kingdom, and Germany, already educate their youngest learners. Most early-education programs in Western Europe are publicly financed, and several countries, including Belgium, France, and Italy, have long had near-universal enrollment. Several emerging economic competitors have also committed to increasing opportunities for early-childhood education. More than three out of four children over the age of 3 in Mexico are enrolled in early-childhood-education programs, while China enrolls 40 percent of its children ages 3 to 6, and has committed to expand enrollment by 2015. Brazil and India, which currently enroll 20 percent to 25 percent of children in preschool, also plan to expand enrollment.

The question for U.S. policymakers and educators is quite simple: If these other countries can do it, why can’t we?


Ensuring U.S. economic competitiveness and growth requires a highly educated and skilled workforce. Without improvements in education, demographic changes will make it difficult to cultivate the skilled workforce needed. Fragile state budgets and the deteriorating federal budget situation only compound the need for a strong labor force.

Steady Work

The chances of having an annual income above the U.S. median rises steadily with increasing levels of education. But the largest difference in likelihood of finding full-time, year-round employment is found between high school dropouts and graduates.

*Click image to see the full chart.

Note: Associate’s degrees are included in the “some college” category. Annual median income is $34,351 (2005 dollars).

Yet, by continuing to do what used to be good enough, we are falling behind. The share of American 18- to 24-year-olds enrolled in postsecondary education or training has barely budged in 10 years. For every 100 9th grade students in this country, only 68 reach high school graduation four years later, only 38 enter college by age 19, and only 18 earn associate’s degrees within three years or bachelor’s degrees within six years of enrolling. Some do return to school later, but the number is small.

In the past, we could tolerate such pipeline losses. Even with our high dropout rates, we were turning out large and growing numbers of college-educated workers. But the prime-age workforce (25- to 54-year-olds), which increased by 35.1 million workers between 1980 and 2000, will grow by only 3 million workers between 2000 and 2020. Whatever room we once had for educational inefficiencies is quickly disappearing.

In particular, we can no longer afford the inequities that have long characterized our system of education. As our need for educated workers grows, the American workforce is going to come increasingly from the ethnic groups that have been least well served at all levels of American education.

The Committee for Economic Development believes that broadening access to early-education programs for all children is a cost-effective investment that will pay future dividends. It will also help ensure that our young people begin their educational experience on a sound, secure footing. And while early education is an economic and educational priority, it is also part of a continuum of necessary childhood investments, beginning in the prenatal months and spanning the infant, toddler, and later school years, that, together, will have the greatest impact on our children’s development and, ultimately, on America’s economic well-being.

Wage Gaps

Adjusting for inflation, adults with less than a high school diploma fare worse in the labor market today than they did in the mid-1970s. Those with a college degree can command much higher earnings than previously. That’s contributed to a growing income gap based on education.

*Click image to see the full chart.

Note: "Some college" category includes associate’s degrees.

Business leaders know that they are the main consumers of our education system. They see the same studies and realize that more and more children are entering kindergarten not ready to learn, and that children who have been exposed to early-childhood education are entering school with a leg up. That has prompted many in the business community to understand the need for educating children earlier than the traditional K-12 period.

The best way for us to compete in an increasingly globalized business world is to reconsider our current education investment strategies. We need to launch this effort in the earliest years, by asking what investments in the period from birth to age 5 will help ensure that the later years will be equally productive. The keystone of this systemwide effort, of course, should be a determination to require high-quality programs, along with strong accountability and evaluation measures, so that we can obtain the feedback that tells us what is working and what needs to change.

Vol. 26, Issue 17, Pages 70-72

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Quality Counts is produced with support from the Pew Center on the States.

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