Tough Choices or Tough Times

The first Commission on the Skills of the American Workforce responded to the threat of globalization in 1990. The trend of manufacturing moving offshore to the lowest cost suppliers was obvious and portended a decline in wages or, worse, unemployment for America’s factory workers. The first Commission’s report, America’s Choice: high skills or low wages!, took its cue from American industry in proposing to “abandon low-skill work and concentrate on competing in the worldwide market for high-value-added products and services.” The Commission concluded that improved primary education is the key to the benefits program.

Now, after 15 years of continued outsourcing and declining test scores, the New Commission on the Skills of the American Workforce was convened and recently issued its report “Tough Choices or Tough Times.” The surprising conclusion: We must improve K-12 education.

According to this report “the first Commission never dreamed that we would end up competing with countries that could offer large numbers of highly educated workers willing to work for low wages.” For such a distinguished panel, their lack of foresight is surprising. In the 1980s US companies were already hiring Asians, Indians and others (usually college-educated in the US) to fill engineering jobs due to the lack of American engineers. By the mid 90s we were hiring Chinese engineers educated in China and Indians trained in India to work here. It was a small step for the mass of educated persons in those countries to decide to stay at home while working for US companies. Hence tech centers in Bangalore and Guiyang.

But, that aside, and passing on the false assumptions I mentioned in the last post, this new report contains much that is worth consideration.

The primary observation is that industries producing the most important new products and services can capture a premium in world markets that will enable them to pay high wages to their workers. This has long been the American model. It depends on maintaining the worldwide technological lead, year in and year out, and on innovators, entrepreneurs and robust capital markets including venture capital. The challenge is staying ahead of the rest of the world when many new products and services can be readily duplicated in lower-cost countries. Success depends on “a deep vein of creativity and innovation that is constantly renewing itself” and a workforce that is “comfortable with ideas and abstractions, good at both analysis and synthesis, self-disciplined and well organized, able to learn very quickly and have the flexibility to adapt quickly to frequent changes in the market.” Yes, indeed!

Clearly, an educated population is an important ingredient in the American economic model, and the current educational system is doing a poor job. The report presents several radical recommendations for reform of the US system; following are the best ideas, in my humble opinion.

The first is a structural change to a model that resembles Finland’s. (See my post “Finland the Model” 2/6/07)

New Educational System

.........................11 -- -- 12 ..EXAM ---
.......................Secondary School --- Select University


K -- -- -- -- --10.. EXAM
Common School

........................11 -- -- 12 ..EXAM ---
......................Vocational School --- Open College

The key change is a set of Board Exams, the first at the end of the tenth grade covering the core subjects to find out whether the student has learned what he or she was supposed to learn. The standards will be set at the level of exams given by countries that do the best job educating their students. The report claims that “when all of our recommendations are implemented, 95 percent of our students will meet this standard.” This is another case of unrealistic expectations, but never mind.

Students who do not achieve the passing grade will be allowed to take remedial courses and retake the Board Exam, until they pass. (Realistic?) Students who score above the passing level will be qualified to go to a vocational school or community college. After 2 years of study they may take a second Board Exam that could admit them to an open college (eg the Cal. State system).

Students who score above a higher level on the first exam can stay in secondary school to prepare for a second Board Exam that may qualify the student to enter a selective college or university. Those who score below the qualifying level on the second Exam may be eligible to enroll in an open college.

I heartily approve of a model that accepts the reality that a traditional college education is not the best choice for everyone. Vocational schools, trade schools, technical schools and community colleges will become the route of choice for the majority of Americans who want to work in high skill, outsource-safe jobs that pay a solid middle-class wage.

The report recommends an effort to recruit a new teaching force from the top third of the high school students going on to college, rather than the bottom third. This can be achieved by changing the shape of teacher compensation, which is currently weak on cash up front and heavy on pensions and health benefits for the retired teacher. The first step is to make retirement benefits comparable to private sector firms and use the money that is saved to increase cash compensation. The report says these changes would enable us to pay beginning teachers about $45,000 per year and to pay up to $100,000 per year to the best experienced teachers in fields like science, mathematics and special education.

The next step is to create high performance schools modeled after the high performance management systems employed in American industry. The schools would be operated by independent contractors, some of them LLC’s owned and run by teachers. In the new system, it would be relatively easy for teachers to reach out to other teachers and form organizations to operate schools themselves, much like doctors, attorneys, and architects form partnerships to offer their services to the public. The schools would be funded by the state and have complete discretion over the way their funds are spent, staffing schedules, organization, management, and program, as long as they provided the curriculum and met the testing requirements imposed by the state.

The primary role of school boards and district offices would be to write performance contracts with the school operators and monitor their operations, cancel the contracts of those providers that did not perform well, and find others that could do better. Parents and students could choose among all the available contract schools, taking advantage of the performance data these schools would be obligated to produce.

Another proposal greatly expands the definition of school in a direction it is already heading. It proposes to provide additional funds for schools serving high concentrations of disadvantaged students enabling them to stay open from early in the morning until late at night, offering a wide range of supportive services to the students and their families. This is where I become uneasy. Babysitting and social services may be appropriate government expenditures, but it is not an educational function, and these services require a different set of skills. These are not the new teachers that we are recruiting from the top third.

On balance, I think that the report contains more good than bad ideas. I strongly support the new structure emphasizing Board Exams and providing a robust vocational path. I think we should recruit more intelligent teachers and pay them better, trading off benefits for salaries. I am enthusiastic about privatization of public education suppliers. These changes are all important and should be pursued. However, they do not comprise a panacea.

When there are kids who do not show up at school, disturb the class, pay no attention, do no homework and refuse to study, with parents who do not care... well, Aristotle could be the teacher and he won't make a bit of difference. These social forces are most important and it is unreasonable to ignore them.