Ask most economic development professionals or government leaders what one factor is most critical to economic growth and business attraction. You will likely find that workforce quality and availability are at or near the top of the list. As a result, state and local governments, with few exceptions, direct resources and devise strategies to address the development and training needs of their labor force to match economic demands. To that end, workforce development and training is often associated with either postsecondary education, in preparation for those who will soon enter the workforce, or re-training of existing workers. Providing resources for graduates to make decisions about whether to enter the workforce after high school, train in a skilled vocation, or go on to pursue a two-year, four-year or advanced degree is a very important component of workforce development. In the short to mid-run, it is critical to make sure those who will soon be in the workforce, individuals age 18-24, are well prepared to participate successfully in the job market they will enter. It is equally important to find ways to retrain existing participants so that they have the skills to continue contributing in the face of structural changes in the economy.
More simply put, today’s students are tomorrow’s workforce. This is equally true for a junior in high school thinking about college or a second career adult seeking a new skill certification as it is for a kindergartner on his or her first day of school. It is relatively easy to see how the skills and preparedness of soon-to-be young adults will, in the near future, impact the quality and direction of the economy. The immediacy of the circumstances can serve to more easily create consensus around policy and allocation of resources directed toward higher education and training. It can take a little more vision to apply the same value to ensuring today’s young children, the workers of the next decade and beyond, are being well equipped and have every opportunity to become productive participants in the economy of the future.
Preparing for the long-run is always more challenging, both politically and practically, than addressing short-run issues. In an increasingly competitive global economy, the ability to take a long run perspective on educational achievement and its impact on the economy will be critical in making sure that our children are prepared for the global economy of the future. According to a study published in the journal of Education Economics by University of Munich’s Ludger Wössmann, looking at a variety of international data, nearly 75% of economic growth and development worldwide can be attributed to increases educational achievement. Wössmann concluded, “Empirical research has shown that education is indeed one – if not the most – important determinant of economic growth in the long run.” GDP growth in the developing nations of Asia and South America have been underpinned by large leaps forward in educational achievement. Leaving parents and young students to flounder in an increasingly fractured education system, while other countries continue to make gains and improve outcomes, threatens to put us at a potential disadvantage in the global market.
To keep pace with competition and meet the evolving demands of employers in a rapidly moving economy, great effort and resources are focused on preparing high school and college graduates and sending them off in the right direction. In order to maintain that trajectory and build on any gains achieved though, we must not lose sight of the fact that the graduates of the future must first be on track to make it to the finish line. Unfortunately, many are note completing that journey. The disheartening truth is that a disproportionate number of those falling out the economy early due to lack of educational attainment are Black, Hispanic, and students with disabilities. Graduations rates published by the National Center for Education Statistics (NCES) show that Black and Hispanic students graduate at a combined average rate of 76.2% compared to 87.6% for White students nationally. Only 64.6% of students with disabilities graduated. While the gap in a few states is relatively low, less than 5 percentage points (AL, DE, HI), gaps of 10% or greater are the norm, and large gaps of greater than 20 points persist in a handful of states (OH, MN, NY).
Even for those who make it to 12th grade, success is not necessarily in hand. In 2016, Eric Hanushek at the National Bureau of Economic Research performed an updated analysis of the 1964 Coleman Report on “Equality of Educational Opportunity”, an exhaustive report mandated by the Civil Rights Act, studying racial disparity in education. Astonishingly, Hanushek found that 50 years later severe disparities in math and reading achievement among black and white students had improved only moderately in the South, were essentially unchanged elsewhere and had even worsened in the Midwest.
Each individual that doesn’t make it to high school graduation, or arrives at that point with inadequate or irrelevant skills necessary to participate in the economy, represents someone who will be in need of economic resources rather than contributing toward generating economic value. Employers, governments, and communities are all harmed when individuals, not necessarily through fault of their own, fail to become a productive integrated citizen and economic participant as a result of inadequate education. Workforce development cannot be something that is engaged in at high school graduation and beyond. It begins before kindergarten and some would argue, at birth. Holistic Workforce development, as it relates to education, means starting everyone as early as possible on a path to success, and providing every opportunity for them to remain on that path until the end.
In the long run, disparities in access and quality of education are a drain on economic growth and development. Policies that fail to provide equal, adequate access result in generations of children growing who grow up without the basic skills and knowledge to engage productively in the economy. Those deficiencies in turn drain resources that could be used for productive means.
The potential solutions are varied. Determining the policies and practices that will best address shortfalls and inequalities in educational achievement and attainment is primarily the task of educators and experts. It is increasingly clear though, that failure to address these challenges risks not just doing a disservice to individuals or select groups, but weakening the foundations of economic prosperity as a whole for future generations. Education, and its influence on economic opportunity, growth and prosperity, is an asset, or potential liability, in which we all have a stake. As with retirement savings, we cannot afford to invest or begin to get our affairs in order late in life. Hope for a solid future requires that we start early so we are well prepared for what is coming.