Imagine that a really good, high-paying job opens up, one demanding quite high skills. It comes down to two candidates. One candidate, Amit, has higher skills than the other, Bob, and is willing to work for half the salary Bob demands. So Bob doesn’t get the job. He goes from employer to employer, only to find that they are all aware there are growing numbers of very highly skilled people like Amit willing to work for lower wages than our high-flying job seeker. What do you suppose happens? Well, in time, of course, Bob and all the other people in his situation face reality and lower their salary demands until they come into line with the market. There go the nice houses, fancy vacations, and private schools for the kids. Quite a comedown.
That, in a nutshell, is what the New Commission on the Skills of the American Workforce predicts for the standard of living of the American people if we do not get our act together quickly. (“U.S. Urged to Reinvent Its Schools,” Dec. 20, 2006.)
Sixteen years ago, in 1990, the first Commission on the Skills of the American Workforce said that the jobs of Americans with low skills were threatened by low-skill people in poor countries who were willing to work for much less. That turned out to be true. But now, with the economic ascendancy of China, India, and other countries, large numbers of highly educated people are joining the global workforce willing to work for half or less of what Americans have been getting. And they are available to employers worldwide at the click of a mouse, without moving an inch.
It also is true that the cost of automating jobs is declining rapidly, and, as these costs go down and labor costs go up, it becomes possible—and, in fact, necessary—for employers everywhere to automate more and more jobs.
The people whose jobs are in the most immediate danger are those who do routine work. If it is routine, it can be reduced to an algorithm, and if it can be reduced to an algorithm, it can be automated. That is true of many high-skill, high-pay jobs, as well as for low-skill, low-pay jobs.
The commission points out that there is a way to avoid a decline in our standard of living. Companies will be able—and happy—to pay outsize salaries to American workers if those workers are able to produce, year in and year out, new products and services that are in high demand and for which they are the only supplier. But it is not just the blowout new products and services that will produce these high-margin products and services; it is also the endless stream of more modest innovations and improvements that turn very good products and services into great ones.
Thus the only way to keep our heads above water will be to have countless firms and industries blazing new trails that lead to an endless supply of new and exciting products and services, many of them powered by state-of-the-art technological advances.
These factors combine to create a specification for the kinds of workers we will need at almost all levels of the economy if we are to avoid a steady decline in our standard of living. We will have to match the best national education achievement in all the core subjects in the curriculum, produce the most creative and innovative graduates available anywhere, and have a nation of workers who are the fastest learners on the face of the globe. Learning quickly, by the way, is much easier for people who have a good command of the core ideas and concepts in the disciplines they have studied, because these ideas and concepts provide the framework on which new knowledge can be hung.
The commission compared this specification to what we have now. The United States, for decade after decade the world’s leader in educational attainment (the proportion of our workforce with the equivalent of the high school diploma), is being overtaken by nation after nation, some of them developing countries. We focused on the three most respected comparative measures of educational achievement, and found that the United States places anywhere from the middle to the bottom of the rankings on all of them. The United States leads the developed world in the proportion of students who drop out of school. On measures of both quality and quantity, our performance is mediocre.
We have tried over the last 30 years almost every intervention that anyone could think of, and they have all failed. The only thing that has greatly increased is the amount of money we are spending.
And it gets worse. Over the last 30 years, the scores of our children on the 4th grade National Assessment of Educational Progress literacy assessment have been virtually flat (although our performance on mathematics is better). Yet the cost per pupil over the same period has risen by 240 percent, after correcting for inflation. We appear to be getting less for our education dollars than any other nation for which we have data. To put it another way: We have tried over the last 30 years almost every intervention that anyone could think of, and they have all failed. The only thing that has greatly increased is the amount of money we are spending.
But there is one thing that we have not tried, and that is to change our system of education, a system that has remained remarkably stable since the early part of the 20th century, a system that was designed for an entirely different era.
And a new system design is exactly what the commission is proposing. There is not enough room here to describe its recommendations in full detail. To get the commission’s report, head for your nearest bookstore or go to Amazon.com and look for Tough Choices or Tough Times. That said, here are the highlights.
We begin with a thought experiment. Suppose, the commission said, that the states create syllabus-based board examinations set to the standard required for entrance into their community and technical colleges without remediation. Suppose that students could take these tests anytime they wished, but that the majority passed by the age of 16, and 95 percent passed by age 18. Assume further that those who passed were automatically admitted to the community or technical college of their choice as soon as they passed the exam. And further suppose that those who hit a higher score could stay in high school to take an International Baccalaureate program, a program made up of Advanced Placement courses, or the equivalent, put together by the ACT admissions-testing service or others. Those who were not able to pass on the first try would be able to try again, as often as they wished, and their high schools would be obligated to help them do that.
The gross savings from such a scheme would be about $60 billion, coming from the reduced time in high school for those now completing 12 years of schooling and from the elimination of remediation in college. Add back $10 billion in costs, to account for the students who would stay in high school under this scheme who now drop out. Then throw in another $8 billion, and you have an investment fund of about $58 billion, to use to make sure that this thought experiment becomes reality.
In the report, we invested a little over $19 billion in high-quality early-childhood education, enough to meet the needs of all 4-year-olds and all low-income 3-year-olds. We invested another $19 billion or so in teachers’ salaries, enough to raise starting pay to the current median, about $45,000 per year, and top salaries to $95,000 for teachers working a regular school year and $110,000 for teachers working a full year. Our polling research tells us that this is enough to attract teachers from the top third of the students entering college.
We have no choice but to create a state-of-the-art system in which good educators can do extraordinary work every day.
The commission proposes to move the governance, organization, and finance of our system into the 21st century in several ways. First, we would have school boards, instead of running schools, contract with third parties (we hope many will be groups of teachers, organized as partnerships) to run schools. They would do this with performance contracts, so the ability of the organizations running schools to keep their contracts would depend on the performance of the students.
Schools would no longer be financed by their local communities, but, instead, directly by the state. The United States, almost alone among advanced industrial countries in relying for school funding on the wealth of local communities, would join the ranks of nations in which school funding does not depend on local wealth. Schools statewide would be funded on a formula, with each student worth a certain base amount, with increments on top of that for students from low-income families, students from families in which English is not spoken at home, students with mild disabilities, students with severe disabilities, and so on.
After equalizing in this way, we would add our last $19 billion to the pot to top up school budgets nationwide, so that we would not have to rob the wealthier schools to pay for the poorer schools, thus making equalization politically possible.
Teachers, in our plan, would be hired by the state, on the sort of salary schedule described above, but they would not have jobs until they were engaged by a school.
This plan would put teachers in the top ranks of our professionals and empower them in ways they have only dreamed about until now. It would give students and parents real choices, among excellent schools. It would give poor and minority students a real shot at a first-rate education everywhere. It would build lean, performance-oriented management systems at every level. And it would give the United States the best purchase on a bright future it could possibly have.
Some who have seen the report wonder whether those who have benefited from the system the way it is now organized will allow these kinds of changes to take place. The commission, composed of people no one would characterize as revolutionaries, believes that the enormous pent-up frustration with the system as it is currently organized will carry the day.
Bad systems are now defeating good educators everywhere. We have no choice but to create a state-of-the-art system in which good educators can do extraordinary work every day.
A version of this article appeared in the January 17, 2007 edition of Education Week as ‘Tough Choices’