Fixing schools, fixing society

BUSINESS wants a better-educated work force. Government wants an innovative, productive economy. Parents, students, and teachers want higher-quality education. And everybody wants to have a say. Whatever opinion one holds about education in the United States - however gloomy or sunny - it is also quite possible to see it in economic terms: Education is an investment.

It is a parent's investment of time and money in the prosperity of children, an individual's investment in wage-earning ability, a city's investment in a stronger tax base. For a nation, education is an investment in future innovators, managers, salespeople, government leaders, mechanics, and workers - and thus an investment in economic growth, scientific and technological achievements, and world competitiveness.

``In an information era,'' says Kenichi Ohmae, an international consultant with McKinsey & Co., such educated people ``add value to resources.''

If the education investment is inadequate, however, the results show up on the bottom line: low income, unemployment, social tension, burgeoning welfare rolls, poor productivity, shoddy output, a declining standard of living.

What's to be done?

Just as in American industry, many specialists say, the educational system needs to be radically restructured to create a ``learning society'' able to compete in the information-age world.

In America, money spent is a pretty fair indicator of commitment.

Per-pupil spending on public education has improved, rising from $1,602 a child in 1976-77 to $3,970 in 1986-87 (in current dollars). But Mary Hatwood Futrell, president of the National Education Association, says if Americans are serious about the quest for excellence, they will have to start pumping 20 to 25 percent more dollars each year into public schools; otherwise, schools are just treading water.

US Secretary of Education William J. Bennett, however, cautions against a ``cash-register mentality'' and contends that Americans spend ``more on education than ever before and more than any other country in the world.''

Statistics are hard to come by. Each country collects different data, and exchange-rate factors make comparisons difficult. But it does appear that on a per capita basis the US is spending roughly what Britain, Japan, and West Germany are spending. And given the 40 million students in the US school system, aggregate spending in the US is indeed higher than in any other country in the world.

But how the money is spent is the key. Computers, audiovisual equipment, fancy buildings - all pale in comparison with the quality of the teachers. To get a better-educated student, teachers must be better. This means setting higher professional standards for teachers - and along with higher standards, vastly higher pay.

``People who say we can do better for the same dollars are simply wrong,'' says Marc Tucker, executive director of the Carnegie Forum on Education and the Economy. ``If we're going to be competitive, it's going to cost more.''

He calls for at least a 50 percent increase in teachers' salaries, bringing the average up to $35,000 a year - just slightly above what Japanese teachers earn. It would be similar to Japan, where salaries are more important than buildings, consultants, administrators, and audiovisual equipment.

Economist Lester Thurow contends that Americans must be prepared for major educational reforms if they expect to compete with the rest of the world. Not only should the school year be increased to around 240 days and the school day lengthened, but, most important, the quality of education should be improved. Sixty more days of mediocrity won't help American students.

The ``no educational standards'' society, he says, is a ``low industrial standards'' society. To boost quality, he says, teachers' salaries (currently averaging $26,704 in the United States) must rise to be competitive with industry.

How much will all this cost?

Dr. Thurow estimates it would take $20 billion to raise teacher salaries by $10,000 a year. He proposes that funding for this sort of a national educational push be collected through, among other things, new value-added and gasoline taxes.

``Talking about raising teacher standards without raising wages is to talk about the impossible,'' Thurow says. ``In a capitalist economy, Americans get the quality that they are willing to pay for.''

THE pressure for change appears to be growing. Cheryl Russell, editor of American Demographics magazine, told the Monitor that as the well-educated members of the baby-boom generation send their children to school, ``they will demand a higher quality of education.''

Even so, it's a patchy thing, with some cities and states caring more about education than others.

In Japan, almost total federal funding makes high-quality education easier to achieve. In the United States, money to fund education is raised mostly at the local and state levels, through property and sales taxes. The federal government contributes only about 7 percent of the funds. So a poor city or state tends to be less able to pay for better teachers, first-rate classroom equipment, and so on.

If it is true that ``human capital'' is going to be the central resource of the information age, then a vicious circle occurs, with poor states slipping further and further behind. The problem is complicated by the unparalleled mobility of Americans. A city or state that invests in high-quality education has no guarantee that the children who are educated will remain in the vicinity and contribute to the economy.

Yet the US competes as a nation in a world economy, Mr. Tucker of Carnegie points out. When the children in one state are undereducated, it drags down the entire nation.

Although the issue is tremendously controversial, given America's states'-rights traditions, logic would indicate that the federal government ensure the uniform quality of education. In the same way that US antitrust policy now looks at global competition, education cannot be simply a state or local concern. It must take account of global competition in the realm of information and intelligence.

At a minimum, this means the federal government must help bring poorly funded districts up to national standards. In Mississippi, for instance, the federal government contributes 20 percent of the public school dollar. In Minnesota and Wisconsin, it is only 3 percent.

Calls for a federalized school system, of course, meet with huge opposition from state and local authorities. Curiously, though, Education Secretary Bennett's calls for national standards imply a federal approach, even if the funding is mostly local. And in Margaret Thatcher's Britain, the government is moving to take away control of education from local school councils. So the national-local tug of war is far from settled.

In the US, most educational specialists have concentrated on trying to make the existing state-local arrangements work more effectively by increasing accountability at the grass-roots level. The Nation-at-Risk task force, a federal committee that looked into this issue in 1983, calls for the public to hold state and local officials - down to the school board level - directly accountable for failures in the schools.

The National Governors' Association, in a report issued last August, said governors would agree to give up state regulatory control if schools and school districts would be accountable for the results. They want at least minimal standards, schools with strong leaders, shared decisionmaking, clear goals, and a lot of time devoted to learning.

All of this is a tall order. And even if it is tackled, it doesn't get at the problem of undereducated Americans in the work force right now - a work force that must be able to read instructions, perform rudimentary calculations, and compete in the world economy.

Businesses find that they have a vested interest, not only in the quality of higher education, but in primary and secondary education as well. Still, investing in education is tricky for many businesses. It does little good to train a worker in basic literacy or math skills, only to have that worker jump to another company or move to another region of the country.

A number of people have begun to advocate ways of solving this problem.

ONE proposal, aimed primarily at displaced workers, is for individual training accounts. Under one version, employers and employees would contribute either 0.9 percent of a worker's salary, or $250, whichever is less, to an ITA (individual training account), which would be like an individual retirement account.

One can see the possibility of abuse, however, with nonessential education perhaps getting ITA funding. A better way, says Anthony Carnevale, chief economist of the American Society of Training and Development, would be tax credits for businesses as an incentive to spend money on worker training and education. If a business gets back 25 cents for each dollar spent on worker education, he says, there will be a business incentive to spend but not to misspend.

The result, he says, would be better productivity through human capital - with a tax break similar to that offered on physical capital investment. Formal on-the-job training totals $30 billion a year, he says, and informal coaching on the job amounts to $180 billion more. (By contrast, US spending on elementary, secondary, and higher education totals about $280 billion.)

Even without a tax break, business-generated training is likely to accelerate, since companies must do what they can to compete - and, in an economy where labor shortages are predicted, this means training workers.

``Education and training don't create the jobs,'' Mr. Carnevale says, referring to the drive to reform the school system.

``Jobs create the need for education and training.'' Business involvement in training, he adds, would bring about ``contextual learning'' with a job attached to it. And he sees universities (with their falling enrollments) and other institutions providing the training services to businesses.

Whatever approach is taken, the need is great and getting greater. The existing US school system is geared to mass production by mostly unskilled workers. But the new US economy, says Mr. Tucker of Carnegie, will be ``high wage, high skill, high tech.'' In this new economy, educated people will make all the difference.

``It takes a long time to develop a competitive advantage with people,'' Tucker says. ``And it takes a very long time for others to overtake you. This is the investment to make. There isn't another more important one.''

Last of a series. Two other articles ran on July 22 and 23.

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