A Cause for Concern

The shocking reality is that Americans -- adults and students -- know precious little about how our system of economics works and how to work successfully in it.

Last spring, the National Council on Economic Education commissioned a Louis Harris poll to determine the level of economic literacy nationwide.

The poll found that nearly two-thirds of young people and half the adults flunked a basic test of economic literacy. At a time when more people must invest in their own retirement, and are accessing the stock market through the Internet, these findings are disturbing.

This special advertising section, Economic Literacy: Giving Our Children Essential Tools for Life, shows how corporate America, working with other stakeholders through the Campaign for Economic Literacy, has begun to meet these challenges. For example, next year, Business Week and the McGraw-Hill Educational and Professional Publishing Group will identify 10 schools that will be the recipients of the Eleventh Annual Business Week Awards for Instructional Innovation. These schools will be chosen as best examples of demonstrating how effective economics education works, providing inspiration and encouragement for other schools to follow their lead.

We all share a responsibility to ensure that our young people are educated to confront the challenges that lie ahead as consumers, savers, investors, and workers. Working together we can help to make sure our students are given the skills necessary for success before they leave school.

The Fourth "R" In Education

In the 1950’s, the book Why Johnny Can’t Read caused a national stir. Today we are writing the sequel and it is equally troubling – Why Johnny Can’t Retire.

Johnny is economically illiterate. So is Jill. Neither of them (nor a disturbing number of Americans) know enough about economics to understand the difference between a budget deficit and the national debt. Savings, investments, assets, and equity are all good ideas we’ll get around to dealing with “someday.” Meanwhile, technology is erasing traditional borders, the world is shrinking, and so are our options to survive and thrive in a global economy.

Economic illiteracy is as much a handicap as not being able to read. Just as no one would question that reading should be included in the definition of a basic education, it is essential that we understand economics should be included as a priority, too. Economics is the fourth “R” in education. There’s Reading, ’Riting and ’Rithmetic, and then there’s Reality. Economics is reality and it takes more than a passing glance at it to lead a successful life. A widespread, solid grasp of economics ensures that our nation will remain prosperous and powerful and that families and individuals will make good choices and prosper as well.

We teach reading in school. We ought to be teaching economics in school – not as an elective, but as a requirement. Not as an afterthought, but as core curriculum. Ninety-six percent of Americans believe economics should be part of the curriculum in schools but only 14 states mandate that the subject be taught as a requirement for a high school diploma. And there are other, more alarming, numbers about the woeful state of ignorance in the general population when it comes to making economic decisions, or even understanding the choices.

Education, founded in 1949 to encourage the teaching of economic principles in American schools, has just launched the national Campaign for Economic Literacy. The Campaign is an ambitious five-year effort to educate people about what’s missing from American education – and why it matters.