Atlantic Business Channel

« TARP Cops | Main | Better Off Dead: The Looming Battle Over Survivors' Costs »

Apr 22 2009, 3:01 pm

Is Education Costing Us More than Health Care?

It is, if you factor in the failure of our education system. That seems to be the incredible conclusion from McKinsey's new report on what America's notorious international education gap really costs us. "If the United States had closed the international achievement gap between 1983 and 1998 and raised its performance to the level of such nations as Finland and Korea, US GDP in 2008 would have been between $1.3 trillion and $2.3 trillion higher, representing 9 to 16 percent of GDP." How much do we spend on health care again? About 16 percent of GDP. Damn.

Or think of it this way: the McKinsey report is concluding is that if we erased our countries' racial and economic achievement gaps, and suddenly our students could read and multiply and write and solve for X as well as the Finnish, our GDP would add the economic equivalent of Italy. To be honest, I'm a little skeptical about these figures. The education gap is measured with international tests, and it would seem very difficult to attach a domestic product number to a four-year old international testing score. (Presumably, students aren't contributing much to GDP until they've graduated from college, four years after an international test from high school.)

And on to the pundits. Without flinching, Thomas Friedman plugs the numbers into his long-term theory of American decline, but he holds out some hope for Obama:

President Obama recognizes that we urgently need to invest the money and energy to take those schools and best practices that are working from islands of excellence to a new national norm. But we need to do it with the sense of urgency and follow-through that the economic and moral stakes demand.
I have no problem with that paragraph, in spirit, but the words bug me. Invest is a great term for Friedman, because it's a nice way to say spend money without using dreadful words like spend or money. But the United States already spends more per student than any country except France and Switzerland (more than Finland and South Korea, in fact), and there is really truly scant evidence that higher spending within the United States correlates with higher student achievement. And, strangely, we'll have to invest even more if we want public education spending to keep up with personal income and private sector wages.

That's why I'm largely excited about Chicago's creative Arne Duncan taking over the education czar role for the White House. Unfortunately, his op-ed today filled me with such a sense of ... nothing. The piece is dimly called "School Reform Means Doing What's Best for Kids," which sounds almost sing-songy its vapidness. I struggled to find one meaningful statement in the whole piece besides: "everything is on the table." OK, fine. I like much of what's on that table -- like paying teachers more, and firing the bad ones, and extending the school day, and setting a national standard. But ultimately, the piece is as wishy-washy as Friedman's. Closing our "trillion-dollar" international achievement gap will require a strategy. What we have instead is a buffet.

Comments (3)

If raising standards means more testing, we are shooting ourselves in the foot. Teachers will spend all their time prepping kids for the tests. Kids will end up hating school and thinking that "learning" means drilling for tests.

In the tech industry, it's creativity and the ability to pick up new skills (on your own, if necessary) are what's important. Drones who hate books and think a high test score is success are going to be worthless to the economy.

martin peretz dispenser

It's funny how everyone says that US schools are failing. I know many Korean and Japanese people who send their kids to the US b/c asian schools are too strict and stifling.

Also, if you compute how much time is spent teaching and how much they're paid, teachers make out pretty well on an hourly basis. I think this nonsense about "six-figure" teachers is silly. The solution I think should be...

1. make school optional. If you don't want to be in school, then don't go and waste everyone else's time. The people who choose to be there will mean business.

2. install a vigorous tech/job skill training program. Too many kids don't see the relevance of AP English to their lives, and they're right. A liberal arts education has its value, but it's not for everyone. I would guess that if you showed kids how the plumbing class in high school would lead to a decent career, you'd see better behavior.

We can drop a LOT more money on education and will probably never have schools that are the equivalent of Korea or Finland. These are culturally and racially homogeneous countries where the culture embraces education.
Here in America, the dropout rate is 30%.
Certainly we can improve the school side of the equation, but a lot of it is and will always be pathology at home.
Most of the ideas floated have potential, but only if executed well.
The mandatory testing is a terrific example. The principle of making sure kids are ready before promotion (or graduation) is great. The execution? Not so much.