investing in education powers u.s. competitiveness
TRANSCRIPT
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1 Center or American Progress | Investing in Education Powers U.S. Competitiveness
Investing in Education Powers U.S.
CompetitivenessEducation Funding Must Be Preserved
Diana Epstein
Introduction
Educaion is he key o American compeiiveness and a srong economy, and coninued
ederal invesmen in educaion is needed in order o suppor improvemens in suden
achievemen and pu our economy on he pah o susained growh. Te Unied Saessuers rom persisen dierences in achievemen beween groups o sudens dened
by race/ehniciy or amily income, and our sudens also rank well behind hose in eco-
nomically compeiive counries on inernaional ess. We mus coninue o inves in
educaion in order o creae a sysem ha is more equiable and ha produces American
sudens who are more compeiive in he global markeplace or alen.
Federal educaion spending needs o be proeced in he congressional super commitee
negoiaions his all. Te super commitee is charged wih coming up wih a leas $1.2
rillion in deci reducion, which comes on op o addiional caps ha were imposed
on uure discreionary appropriaions as par o he deb-ceiling deal. Federal educa-ion spending is included in he po o discreionary money subjec o deci-reducing
cus. I he commitee can’ reach agreemen and he auomaic sequesraion kicks in,
educaion programs are projeced o be cu by abou 9 percen.1 Ta ranslaes o abou
$4 billion worh o cus o he educaion sysem. Tis would be a devasaing blow o
children across he counry, especially during a ime when almos hal he saes have
slashed heir educaion budges.2
Educaion has already aken a hi in his year’s budge batle. Te spring coninu-
ing resoluion cu abou $1.3 billion rom he Deparmen o Educaion, excluding
Pell Grans—he ederal program or qualied low-income college sudens.3 While
Presiden Barack Obama’s budge wisely proposed consolidaing some educaion
programs ino new unding sreams, he complee eliminaion o unding means ewer
resources available o advance imporan educaion prioriies. O course, i maters how
money is spen—educaion unding needs o be ecien and eecive, and argeed o
where i is needed mos. In addiion, innovaions in ederal unding such as he com-
peiive ace o he op program have demonsraed ha ederal unds can be used as a
powerul lever o promp imporan reorms in longsanding sae policies.
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2 Center or American Progress | Investing in Education Powers U.S. Competitiveness
Cuting educaion spending would be shorsighed and harmul o our counry’s uure.
Educaion spending makes up only 3 percen o he oal ederal budge,4 and cus in
his area would pu a miniscule den in he deci. No only would educaion cus ail o
conribue meaningully o deci reducion, bu every cu now is a missed opporuniy
o lay he necessary oundaion or uure economic growh and a srong middle class.
Educaion is one o hose areas where spending now may no pay o righ away because
i akes years or school-age children o become working aduls. Tis means i can be di-cul or policymakers concerned wih shor-erm elecion cycles o eecively make he
case or his kind o long-erm invesmen. Noneheless, he srengh o he American
economy depends on a well-educaed workorce. Smar and ecien ederal inves-
mens in educaion can improve suden achievemen and pu our economy on he pah
o susained and robus growh.
The public supports a strong education system
Te American people undersand he criical imporance o invesing in educaion.Te public has clearly expressed in nine dieren public opinion polls since January
ha i does no suppor cus in educaion.5 In a January USA oday/Gallup poll,
wo-hirds o Americans opposed cus in educaion—more han opposed cus o any
oher area including Social Securiy, Medicare, and naional deense.6 Similarly, when
asked wheher i was more imporan o reduce he deci or preven cus in educaion,
respondens o a January CNN poll chose o preserve educaion by a margin o 75
percen o 25 percen.7 In ac, lack o unding and nancial suppor was cied as he
bigges problem acing local schools, according o a new poll o he public’s atiudes
oward public schools.8
People appear o be less supporive o increasing educaion spending, however, i i
means hey would have o pay more axes. When asked abou he level o governmen
unding or public schools in heir disric, abou 90 percen o respondens o a 2011
Educaion Nex poll el ha unding should eiher increase or say he same. Only 28
percen, hough, el ha local axes should increase o und heir disric schools while
35 percen el ha local axes should increase o und schools across he naion.9
Te American people are righ o wan o proec educaion unding. Te Unied Saes
suers rom persisen achievemen gaps beween groups o sudens dened by race/
ehniciy or amily income. For example, on he Naional Assessmen o Educaional
Progress exam, black sudens scored 27 poins below whie sudens in ourh-grade
reading and Hispanic sudens scored 26 poins below whie sudens in eighh-grade
mahemaics.10 acial/ehnic and income achievemen gaps run couner o America’s
commimen o an equal and jus sociey, and lower levels o achievemen are also
associaed wih poorer healh, lower earnings, and higher levels o incarceraion.11
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Federal educaion programs provide more equiable resources or sudens who need
i mos—wihou ederal suppor, many hard-ough gains would erode or children
living in povery.
Inernaional ess demonsrae ha U.S. sudens have allen behind many o heir iner-
naional peers. Te Program or Inernaional Suden Assessmen, or PISA , assesses
reading, mah, and science lieracy among 15-year-olds in he 34 member naions o heOrganisaion or Economic Co-operaion and Developmen, or OECD, and 31 oher
counries and educaion sysems. On he 2009 PISA exam in mahemaics, he aver-
age score or U.S. sudens was below he OECD average, and 17 OECD counries had
higher average scores han he Unied Saes. On he 2009 science exam, he U.S. aver-
age score was similar o he OECD average, and 12 OECD counries had higher average
scores han he Unied Saes. Te U.S. sudens scored a he OECD average in reading,
hough six oher OECD counries scored higher han he Unied Saes.12
o achieve desired levels o economic growh and live up o our ounding ideals, he
Unied Saes mus increase he overall level o achievemen o sudens in he K-12 edu-caion sysem and close boh inernaional achievemen gaps and he persisen achieve-
men gaps beween groups o American children dened by ehniciy or amily income.
Six reasons to support continued federal investment in education
Invesmen in educaion makes inuiive sense o he American people, bu in his ough
budgeary climae, i seems ha every public invesmen is on he able o be cu. Le’s
look a six reasons why coninued ederal invesmen in educaion should be a no-
brainer as he super commitee negoiaes his all.
Global competitiveness
oo ew o our sudens are perorming a he levels needed o compee or he high-skill
jobs ha allow us o mainain global compeiiveness. Only 33 percen o ourh graders
and 33 percen o eighh graders scored a or above procien in reading on he 2009
NAEP exam; only 39 percen o ourh graders and 34 percen o eighh graders were a
or above procien in mahemaics.13 Furhermore, achievemen ess demonsrae ha
inernaional compeiors are perorming beter han U.S. sudens, and in a globalized
economy we canno aord o all any urher behind.
esearch shows ha invesmen in educaion is essenial or our counry’s shor- and
long-erm economic growh. A recen repor by McKinsey & Company esimaes ha
bringing lower-perorming saes up o he naional average beween 1983 and 1998
would have added $425 billion o $710 billion o our 2008 GDP.14 Closing he racial/
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ehnic and income achievemen gaps beween 1983 and 1998 would have also added o
our GDP. Te esimaes are ha closing he racial/ehnic gap would have added $310 bil-
lion o $525 billion by 2008 and closing he income achievemen gap would have added
beween $400 billion and $670 billion o our 2008 GDP.15 Coninuing o olerae hese
achievemen gaps is anamoun o acceping a chronic, sel-induced economic recession.
Closing he inernaional achievemen gap beween 1983 and 1998 would have added$1.3 rillion o $2.3 rillion o our 2008 GDP. Anoher sudy ound ha increasing
sudens’ scores on he PISA es by 25 poins—one-ourh o a sandard deviaion—
beween 2010 and 2030 would resul in economic gains or OECD counries. U.S. su-
dens currenly rank below he sudens rom many OECD counries on his es, bu i
he Unied Saes and oher counries improved by his amoun, he payo o he Unied
Saes would be more han $40 rillion by 2090.16
Ensuring all students reach high standards of achievement
I is criically imporan ha we close achievemen gaps beween groups o sudens
dened by race/ehniciy and amily income. As our populaion coninues o become
more diverse and as income inequaliy coninues o increase, he ederal governmen
plays an essenial role in unding schools so all children have he resources hey need o
achieve high sandards. Tese ypes o achievemen gaps run couner o America’s com-
mimen o an equal and jus sociey.
Economic returns
Tere are large economic reurns o increasing our counry ’s high school and college
graduaion raes. Approximaely 1.3 million sudens dropped ou o he class o 2010;
i hal o hose sudens had graduaed rom high school, he class o 2010 alone would
earn $7.6 billion more per year and generae an addiional $5.6 billion in increased
spending and $2 billion in increased invesing per year.17 Economic reurns would be
even higher i he dropou rae were cu urher.
Looking back o he beginning o he educaion pipeline, research shows ha invesing
in early childhood has huge payos. Sudies o he highly regarded Perry Preschool and
Chicago Paren-Child Ceners esimaed a posiive 9-o-1 bene-cos raio or Perry
and 8-o-1 or CPC, wih Perry’s annual reurn on invesmen esimaed o be 4 percen
or paricipans and 12 percen or sociey.18 Te Unied Saes is one o only a handul
o advanced counries ha does no provide universal early childhood educaion—here
are currenly 5 million children ages 3 o 5 who are no atending preschool or kinder-
garen.19 Even i universal access is no possible in his budge climae, coninued ederal
spending in his area is a pruden invesmen in erms o boh long-erm economic
oucomes and uure suden achievemen.20
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Jobs
Te American ecovery and einvesmen Ac, oherwise known as he simulus, saved
beween 250,000 and 350,000 jobs in educaion.21 Now hose AR unds are dry-
ing up and saes and local governmens are cuting educaion budges righ and le.
Cuting educaion urher would mean eliminaing more educaor jobs, whereas inves-
ing in educaion could ranslae direcly o job preservaion and employmen growh.Furhermore, he addiional spending and invesmen gained by producing more high
school graduaes would lead o more job creaion. Cuting he class o 2010’s dropou
rae in hal would have added up o 54,000 new jobs o he economy.22
Savings elsewhere
axpayers are spared up o $13 or every $1 invesed in qualiy early educaion, accord-
ing o esimaes.23 A key goal o early childhood educaion is o ensure children ener
he K-12 sysem wih he pre-lieracy skills and vocabulary necessary o learn o read.Children who ail o learn o read by he hird grade are ar more likely han heir peers
o wind up receiving special educaion and relaed services.24 Invesmen in early child-
hood educaion reduces spending on K-12 special educaion as ewer children need o
be classied as learning disabled.
Coninuing o inves ederal resources in K-12 and early childhood educaion pro-
duces cos savings in oher areas as well, including savings in higher educaion due
o a decrease in he resources ha mus be spen on remediaion. Higher graduaion
raes and generally greaer skill levels among graduaes may help reduce he rae o
incarceraion and lower paricipaion in povery-relaed programs, boh o whichresul in uure cos savings.
Path to the middle class
A recen aricle in Te Alanic Monhly by Don Peck discussed he decline o he middle
class in America and how i migh be resored.25 Te riches 1 percen o Americans com-
mand an increasingly huge share o naional income and wealh, while median incomes
have declined. Te Grea ecession exacerbaed his rend due o job losses concen-
raed in radiionally middle-class secors compared o eiher high-level whie-collar or
low-skill blue-collar secors. As he aricle poins ou, many o he manuacuring jobs
he Unied Saes los in recen years were available o workers wihou advanced educa-
ion, bu many o he middle-class jobs o he uure will require a leas some educaion
beyond high school.26 Fields such as healh care will grow, and many o hese jobs require
some level o possecondary raining hough no necessarily a college degree.
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In addiion o educaing workers or hese expanding elds, he Unied Saes will also
need o creae high-skill jobs requiring high levels o educaion in order o produce he
coninuing innovaion ha is necessary or economic growh. Improving our educaion
sysem and increasing educaional atainmen is clearly one o he mos imporan pahs
o resoring a srong and vibran middle class.
What happens if Johnny can’t read?
Undersanding he imporance o educaion is no an absrac idea—everyone wen o
school a some poin in heir lives, and mos people know o a leas one child currenly
in school. o undersand he dierence beween a good educaion and a poor one, le’s
look a a hypoheical 3-year-old child named Johnny.
Johnny doesn’ have access o high-qualiy early childhood educaion so he eners
kindergaren behind his peers. He goes o a high-povery school ha is under-resourced
and lacks a sable cadre o highly eecive eachers. Johnny alls urher and urher behind and is unable o read by hird grade, a criical benchmark or uure success.27 By
high school, Johnny is chronically absen, ar below procien in reading and mah, and
evenually drops ou. He can’ ge a job wihou a high school diploma and is ar more
likely o become incarceraed, which will cos axpayers an average operaing cos o
abou $24,000 per year on op o $65,000 in capial coss.28
Bu Johnny didn’ have o end up on his pah. I he had been enrolled in a high-qualiy
early childhood program, he would have sared school on rack. Atending a school
where he had a series o highly eecive eachers would have increased his achievemen
by leaps and bounds.29
Simply graduaing high school would make him more likely o be employed. Wih a diploma, he would earn abou $9,000 per year more or $300,000
(33 percen) over a 40-year working career.30 Adul Johnny pays axes and buys goods,
increasing demand and conribuing o job creaion and economic growh. aher han
drain resources rom axpayers, he invess in his communiy.
Johnny realizes ha he would have greaer opporuniies wih some possecondary
raining, so he goes o he local communiy college and earns a echnical cericae and
hen laer an associae’s degree. He is now qualied or a higher-paying job—$10,000
more per year han i he had only a high school diploma.31 Wih hese increased earn-
ings, he pus more money back ino he economy, urher simulaing demand and lead-
ing o even more job creaion and economic growh. And wha i Johnny had gone o
college and earned a bachelor’s degree? His lieime earnings would be 74 percen more
han i he had sopped a a high school diploma, 31 percen more han i he had earned
only an associae’s degree.32
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One child, wo dramaically dieren pahs. Now imagine ha child is like he 100
oher children in your local school, he 1,000 in your own, he 1 million in your sae,
or he 50 million in he Unied Saes. Prety soon he power o educaion becomes
clear—as do he consequences i we ai l o provide all children wih he qualiy educa-
ion hey need o succeed.
How we spend money matters
O course, invesing in educaion isn’ going o increase suden achievemen by isel. I
maters how we spend ha money, and now more han ever we have o ensure money is
spen airly, ecienly, and eecively. Here are a couple o key principles o ollow.
Spend scarce federal money where it is most needed
We need o increase suden achievemen overall, bu we also need o do a much beter job o closing achievemen gaps in order o ensure all children are prepared or higher
educaion and securing uure employmen. o his end, ederal educaion unds should
go o sudens wih exra needs, including low-income sudens, sudens wih disabili-
ies, and English language learners. Money should be used o close vas dispariies in
educaional achievemen beween low-income and minoriy sudens and heir more
afuen peers. esources—including eecive eachers—should be disribued equi-
ably among schools wihin a disric and among disrics wihin a sae.33 And, hough
saes are sruggling as well, we should use ederal axpayer dollars o encourage saes o
direc he resources hey do have o school disrics wih many low-income sudens.
Education funding should be efficient and effective, emphasizing returns
on investment
esuls should drive unding decisions so ineecive programs are eliminaed, oudaed
programs are updaed, and overlapping programs are consolidaed ino new unding
sreams.34 We should require disrics o repor real expendiures a he school level,
rigorously evaluae sae and local resuls on ha spending, and make uure unding
decisions accordingly. More eor should be devoed o evaluaing he reurns on educa-
ion spending achieved by saes and local school disrics, providing crucial daa or
smar budgeing.35 Finally, we should explore innovaive unding sraegies ha reward
perormance, such as pay-or-success conracs and social impac bonds.
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Conclusion
Educaion is he key o uure American compeiiveness and a srong economy, and
we mus coninue o inves in educaion in order o pu our economy on he pah o
susained growh and rebuild he middle class. Te payos o invesing now will no
be ully realized or decades, bu every momen los is anoher child no prepared or
kindergaren, anoher high school dropou, anoher low-skilled worker who cannosecure employmen. Invesmen in educaion is a social and economic imperaive, and
ecien and eecive ederal educaion spending mus be proeced in his all’s super
commitee negoiaions.
Endnotes
1 Richard Kogan, “How the Potential Across-the-board Cuts in the Debt Limit Deal Would Occur,” Center on Budget and Policy Priori-ties, August 8, 2011, available at http://www.cbpp.org/les/8-4-11bud.pd .
2 Erica Williams, Michael Leachman, and Nicholas Johnson, “State Budget Cuts in the New Fiscal Year Are Unnecessarily Harmul,”
Center on Budget and Policy Priorities, July 28, 2011, available at http://www.cbpp.org/cms/index.cm?a=view&id=3550.
3 Alyson Klein, “Congress Chops Funding or High-Prole Education Programs,” Education Week, March 23, 2011, available at:http://www.edweek.org/ew/articles/2011/03/04/23edbudget.html?r=1208021420; “Department o Education Budget Tables,”available at http://www2.ed.gov/about/overview/budget/tables.html.
4 Center on Budget and Policy Priorities, “Policy Basics: Where Do Our Federal Tax Dollars Go?”, April 15, 2011, available athttp://www.cbpp.org/cms/index.cm?a=view&id=1258.
5 Committee or Education Funding, “The American Public Strongly Opposes Education Cuts,” available at http://www.thompson.com/images/thompson/nclb/openresources/the_public_opposes_education_cuts.doc.
6 Frank Newport and Lydia Saad, “Americans Oppose Cuts in Education, Social Security, Deense,” Gallup, January 26, 2011, availableat http://www.gallup.com/poll/145790/americans-oppose-cuts-education-social-security-deense.aspx.
7 “CNN Opinion Research Poll,” January 25, 2011, available at http://i2.cdn.turner.com/cnn/2011/images/01/25/rel2d.pd .
8 “PDK/Gallup Poll o the Public’s Attitudes Toward the Public Schools, 2011,” available at http://www.pdkintl.org/poll/docs/pdk-poll43_2011.pd .
9 William Howell, Martin West, and Paul E. Peterson, “The 2011 Education Next – PEPG Survey,” August 3, 2011, available athttp://educationnext.org/the-2011-education-next-pepg-survey/.
10 Black-white gap rom 2007 and Hispanic-white gap rom 2009; or more inormation see: “Achievement Gaps,” available athttp://nces.ed.gov/nationsreportcard/studies/gaps/.
11 McKinsey & Company, “The Economic Impact o the Achievement Gap in America’s Schools” (2009).
12 “Program or International Student Assessment (PISA),” available at http://nces.ed.gov/surveys/pisa/index.asp.
13 “The Nation’s Report Card,” available at http://nationsreportcard.gov/.
14 McKinsey & Company, “The Economic Impact o the Achievement Gap in America’s Schools.”
15 Ibid.
16 Eric A. Hanushek and Ludger Woessmann, “The High Cost o Low Educational Perormance: The Long-Run Impact o ImprovingPISA Outcomes” (Paris: Organisation or Economic Co-operation and Development, 2010).
17 The Alliance or Excellent Education, “Education and the Economy: Boosting the Nation’s Economy by Improving High SchoolGraduation Rates,” March 2011, available at http://www.all4ed.org/les/NationalStates_seb.pd .
18 James Heckman and Dimitriy Masterov, “The Productivity Argument or Investing in Young Children.” Working Paper 5 (Invest inKids Working Group, Committee or Economic Development, 2004); Art Rolnick and Rob Grunewald, “Early Childhood Develop-ment: Economic Development with a High Public Return” (Minneapolis, MN: Federal Reserve Bank o Minneapolis, 2003).
19 Kids Count Data Center,” available at http://datacenter.kidscount.org/data/acrossstates/Rankings.aspx?loct=2&by=a&order=a&ind=5109&dtm=11547&t=38.
20 Rolnick and Grunewald, “Early Childhood Development”; Heckman and Masterov, “The Productivity Argument or Investing inYoung Children”; HighScope Educational Research Foundation, “The HighScope Perry Preschool Study Through Age 40” (2004).Many studies document the positive achievement efects o qual ity early childhood education. For a sample, see: “Research onEarly Childhood Education Outcomes,” available at http://www.publicpolicyorum.org/Matrix.htm.
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21 Joe Markman, “Stimulus saved 6,000 education jobs in L.A., report says,” Los Angeles Times, October 20, 2009, available at http://articles.latimes.com/2009/oct/20/nation/na-education-jobs20; Marguerite Roza, Chris Lozier, and Cristina Sepe, “K–12 Job TrendsAmidst Stimulus Funds” (Seattle: Center on Reinventing Public Education, 2010), available at http://www.crpe.org/cs/crpe/download/csr_les/rr_crpe_jobtrends_rr8_mar10.pd ; Michele McNeil, “How many jobs did the education stimulus save?”, TheHechinger Report, February 12, 2011, available at http://hechingerreport.org/content/how-many-jobs-did-the-education-stimu-lus-save_5162/.
22 The Alliance or Excellent Education, March 2011.
23 Leslie J. Calman and Linda Tarr-Whelan, “Early Childhood Education or All: A Wise Investment” (New York: Legal Momentum’sFamily Initiative, 2005), available at http://web.mit.edu/workplacecenter/docs/Full%20Report.pd .
24 G.R. Lyon and J.M. Fletcher, “Early warning system: How to prevent reading disabilities,” Education Matters 1 (2) (2001): 22–29.
25 Don Peck, “Can the Middle Class Be Saved?”, The Atlantic Monthly, September 2011.
26 It is estimated that about two-thirds o available jobs through 2018 will demand some postsecondary education. See: AnthonyCarnevale, Nicole Smith, and Jef Strohl, “Help Wanted: Projections o Jobs and Education Requirements Through 2018”(Washington: Georgetown University Center on Education and the Workorce, 2010).
27 Annie E. Casey Foundation, “Early Warning! Why Reading By the End o Third Grade Matters” (2010), available at http://www.aec.org/~/media/Pubs/Initiatives/KIDS%20COUNT/123/2010KCSpecReport/AEC_report_color_highres.pd .
28 Pew Center on the States, “One in 100: Behind Bars in America 2008” (2008), available at http://www.pewcenteronthestates.org/uploadedFiles/One%20in%20100.pd .
29 William L. Sanders and Joan C. Rivers, “Cumulative and Residual Efects o Teachers on Future Student Academic Achievement”(Knoxville, TN: University o Tennessee Value-Added Research and Assessment Center, 1996); Eric A. Hanushek, Steven G. Rivkin,and John F. Kain, “ Teachers, Schools, and Academic Achievement,” Econometrica 73 (2) (2005): 417–458; Jonah E. Rockof, “TheImpact o Individual Teachers on Students’ Achievement: Evidence rom Panel Data,” American Economic Review 94 (2) (2004):247–252.
30 Anthony P. Carnevale, Stephen J. Rose, and Ban Cheah, “The College Payof: Education, Occupations, Lietime Earnings” (Washing-
ton: Georgetown University Center on Education and the Workorce, 2011).
31 Ibid.
32 Ibid.
33 For policy recommendations in these areas, see: Saba Bireda and Raegen Miller, “Walking the Talk: Closing the ComparabilityRequirement Loophole in Title I o the Elementary a nd Secondary Education Act” (Washington: Center or American Progress,2010), available at http://www.americanprogress.org/issues/2010/03/comparability_brie.html; Diana Epstein, “MeasuringInequity in School Funding” (Washington: Center or American Progress, 2011), available at http://www.americanprogress.org/issues/2011/08/unding_equity.html.
34 Glenda L. Partee, “Education Transormation: Doing What Works in Education Reorm” (Washington: Center or American Progress,2010), available at http://www.americanprogress.org/issues/2010/04/education_transormation.html.
35 Ulrich Boser, “Return on Educational Investment: A District-by-District Evaluation o U.S. Educational Productivity” (Washington:Center or American Progress, 2011), available at http://www.americanprogress.org/issues/2011/01/educational_productivity/report.html.