How did the U.S. become the world's largest economy? A key part of the answer is education. Some 85% of adult Americans have at least a high school degree today, up from just 25% in 1940. Similarly, 28% have a college degree, a fivefold gain over this period. Today's U.S. workforce is the most educated in the world.
But now, for the first time ever, America's educational gains are poised to stall because of growing demographic trends. If these trends continue, the share of the U.S. workforce with high school and college degrees may not only fail to keep rising over the next 15 years but could actually decline slightly, warns a report released on Nov. 9 by the National Center for Public Policy & Higher Education, a nonprofit group based in San Jose, Calif. The key reason: As highly educated baby boomers retire, they'll be replaced by mounting numbers of young Hispanics and African Americans, who are far less likely to earn degrees.
Because workers with fewer years of education earn so much less, U.S. living standards could take a dive unless something is done, the report argues. It calculates that lower educational levels could slice inflation-adjusted per capita incomes in the U.S. by 2% by 2020. They surged over 40% from 1980 to 2000.
Not everyone is so pessimistic. Education Secretary Margaret Spelling argues that President Bush's 2001 education reform law, the No Child Left Behind Act, is working to lift minority education levels. "It makes me bristle when I hear people say, 'There's no way in hell we can have our children reach grade-level proficiency,"' she says.
Still, the Center's projections are especially alarming in light of the startling educational gains so many other countries are achieving. U.S. high school math and reading scores already rank below those of most of the advanced economies in Europe and Asia. Now education is exploding in countries such as China and India. There are nearly as many college students in China as in the U.S. Within a decade, the Conference Board projects, students in such countries will be just as likely as those in the U.S. and Europe to get a high school education. Given their much larger populations, that should enable them to churn out far more college graduates as well. More U.S. white-collar jobs will then be likely to move offshore, warns National Center President Patrick M. Callan. "For the U.S. economy, the implication of these trends is really stark," he says.
Callan's projections are based on the growing diversity of the U.S. population. As recently as 1980, the U.S. workforce was 82% white. By 2020, it will be just 63% white. Over this 40-year span, the share of minorities will double, to 37%, as that of Hispanic workers nearly triples, to 17%. The problem is, both Hispanics and African Americans are far less likely to earn degrees than their white counterparts. If those gaps persist, the number of Americans age 26 to 64 who don't even have a high school degree could soar by 7 million, to 31 million, by 2020. Meanwhile, although the actual number of adults with at least a college degree would grow, their share of the workforce could fall by a percentage point, to 25.5%.
STEEP SLIDE IN TEXAS
These trends aren't carved in stone, of course. Bush's No Child law is helping to lift minority kids' test scores, says Jack Jennings, president of the Center on Education Policy, a Washington think tank that studies No Child. But the gaps are still enormous. On the recently released National Assessment of Educational Progress exams, 39% of white eighth graders were proficient in reading, vs. just 15% of Hispanics and only 12% of blacks. "Given these scores, there's no way the country will reach the 100% proficiency goal" of the No Child law, predicts Jennings.
Even with No Child, backsliding already has happened in Texas, the laboratory President George W. Bush used for the law when he was governor of the state. Why? The Lone Star State's Hispanic population is exploding. Because minority students are far more likely to drop out of high school, Texas now ranks dead last among the 50 states in the percentage of adults who have a high school degree. That's down from 39th in 1990.
Similarly, Texas ranks 35th among the states in the percentage of adults who have a college degree, down from 23rd in 1990. State demographer Steve H. Murdock is telling anyone who will listen that Texas public schools will be 80% minority by 2040, up from 57% in 2000. If the education gap persists, he warns, the income of the average Texas household will fall by $6,500 by 2040, after inflation adjustments -- potentially fueling a spike in poverty, the prison population, and other social problems. "We've been very hard hit," says Murdock.
In Texas and across the country, No Child's focus on test results skirts the biggest Achilles' heel of the public schools: the growing dropout rate. Nationally, the on-time high school graduation rate is lower now than it was in 1983, when the report A Nation at Risk first sounded the alarm about the nation's failing schools, says Michael Cohen, president of Achieve Inc., a nonprofit school standards group created by governors and business leaders.
In 2002 just 68% of high school students graduated four years after they started ninth grade. That's down from 75% in the early 1980s. True, many later earn a general educational development degree. But the GED has never been the same as a high school diploma. Once students quit school, it's difficult for them to make it into college, says Thomas G. Mortenson, head of Postsecondary Education Opportunity, a higher education newsletter.
Minority students who do get through high school face even greater obstacles in earning a bachelor's degree. Because many come from low-income families, they have been hit especially hard by the shift in student financial aid policy away from need-based grants toward loans and merit scholarships that favor the middle class. So just 10% of students from the bottom quartile of family income brackets earn a BA by the time they're 24, figures Mortenson, vs. 81% of those from the top quartile. "We are not dealing with the changing demography of the country," he says.
How can the trends be reversed? Jennings argues that the U.S. must push harder to get better teachers into poorer schools. States must also work far harder to keep students from dropping out of high school even as they raise graduation requirements. Today, only about a third of high school grads are prepared for college, estimates Achieve's Cohen. Many need remedial courses, a key reason why fewer than half of those who begin college earn a BA, says Cohen, whose group is working with 22 states to raise their high school graduation requirements. And more generous financial aid could make it easier for low-income students to go to college.
The prospects for U.S. education levels are a lot like global warming. Since erosion occurs gradually, it's easy to ignore. But if the U.S. doesn't pay more attention, everything from its competitiveness to its standard of living could sink.
By William C. Symonds