Virtually everyone believes education is a key to prosperity. But the fact that Vice President Mike Pence had to cast a tie-breaking vote to confirm Betsy DeVos as secretary of education raises the question: why does education provoke such sharp divisions in the United States?
When I was growing up under Communism, I easily understood the difference between my parents’ and friends’ opinions, on one side, and the Communist Party’s on the other. The party wanted desperately to indoctrinate, whereas my parents did their best—at home, behind closed double windows—to counterbalance the official brainwashing. Such intense polarization may be understandable under Communism, but how can it be that Republicans and Democrats are so sharply divided on education?
To shed light on the problems with our educational system and their possible solutions, I will start with some simple facts that show roughly where we are in terms of what passes for education now. Then I will discuss where I believe we should be going, and how to get there. The answer is simple: the time young people spend in today’s educational institutions must be drastically reduced, and complemented by new institutions that would give them more experience, teach discipline and perseverance, help them build networks, and better prepare them for their lives and careers.
A Closer Look at the Numbers
At present, the college enrollment for the 18–24 age group stands around 40 percent, up from 26 percent in 1980. As expected, labor force participation for this age group has declined: rates for those aged 18–19 declined from 67 percent to 48 percent between 1980 and 2013; for those 20–24 years old rates declined from 77 percent to 71 percent. Not surprisingly, the median earnings of Americans 20–24 years old declined from $22,300 in 1980 to $17,500 in 2012 (in constant 2011–12 dollars), in part because a greater fraction of these age groups does not work.
In 2013, about 84 percent of young females and 81 percent of young males completed high school education, up from 79 percent and 75 percent, respectively, in 1980. About 17 percent of all young adults were neither enrolled in school, nor working, and for black males, the percentage stands at 30 percent. Since 2000, median incomes for this age group have declined for all education levels (except a small blip in 2005–6, which has quickly reversed since).1
Total federal and state government spending on education hovers around 5 percent of GDP since 1980,2 and outstanding student loans now stand at $1.4 trillion. After discounting for grants, college costs have increased since 1999 by about 20–30 percent for all income groups.
All of the above may not look too bad at first sight. But a closer look shows that these figures can easily be made to cover up some uncomfortable truths.
Consider first the 83 percent total high school graduation rate: the number does not necessarily say anything about how much the graduates actually know. A 2015 New York Times article starts with statistics from Berea High School, with one thousand students, whose graduation rate jumped from 65 percent to more than 80 percent in four years.3 Yet, in the college entrance exams those students took, only 10 percent of the students were ready for college-level work in reading, and only 7 percent were ready for entry-level college math. Across all schools, only 40 percent of twelfth graders, on average, were ready for college work in reading and math. This decline in learning is also reflected in different numbers at colleges and universities.
How are graduation rates inflated, and not backed by basic knowledge? In California, South Carolina, and Tennessee, authorities eliminated requirements that students pass exit exams before getting their diplomas. Alaska, California, Wisconsin, and Wyoming demand fewer credits than other states. Thirty-two states did not require graduates to take four years of English and math.
Discharging “high-risk” kids is another method used to manipulate outcomes.4 Where do these castaways go? The answers vary. In Chicago, one of the largest school districts in the country, investigations have found that the district is misclassifying students, enrolling “high-risk” kids in “dropout dumps” and calling them “out-of-district transfers.” Change the words, and the graduation rates change. Meanwhile, failing kids disappear from any statistics.5
Texas reports the nation’s second-highest graduation rate and the highest in the nation for African Americans and Hispanics. But investigations suggest that the figures there too exclude tens of thousands of students from the dropout count, simply because schools report, with little required documentation, that students have left the country or are being homeschooled.6
Elsewhere, students at risk of not graduating from regular schools are given the option to “recover credits.” In Detroit, more than a third of the students at Cody Medicine and Community Health Academy, for example, are in credit-recovery programs. With the incentives to improve graduation rates, teachers and schools are moving their nonperforming students to for-profit programs such as K12, National High School, and others, where they can get the necessary high school credits. Daria Hall, a director at the Education Trust, acknowledged that “Some of these credit-recovery programs frankly aren’t terribly rigorous and aren’t preparing students well for what’s next.”7
Meanwhile, in Camden, New Jersey, almost half of the area’s high school seniors graduated through an appeals process because they could not pass the required exams to graduate. I could not quite discover what this means, but one thing is clear: this diploma is not backed by the same knowledge as the usual one.
In short, any improvement in high school graduation rates hardly seems to reflect knowledge gains, and appears to be little more than a statistical pretense of having produced knowledge. There is nothing new about these inconsistencies between statistics and reality. Already in 2002, the National Center for Education Statistics noted that 35.5 percent of first- and second-year undergraduates had to take remedial courses in reading and math.8
In large part, we have tried to remedy these problems by increasing both spending on education and the amount of time students are expected to spend in the existing educational system. So far, the results of both of these efforts have been disappointing.
Using data from the 2010 Digest of Education Statistics, Eric Hanushek of Stanford University analyzed student enrollment and teacher and staffing levels at K–12 U.S. public schools between 1980 and 2008. He found that staff and teacher numbers grew roughly twice as fast as student enrollment over this period. Yet while school staff increased 52 percent and student enrollment by 21 percent, students still showed no additional learning in achievement tests.
Pre-kindergarten programs have also shown poor results. In Georgia, for example, fourth- and eighth-grade reading, math, and science scores all trail the national average; one in three teenagers drops out of high school—the third-worst rate in the country. This occurs in spite of the fact that, since 1995, the state has subsidized free pre-kindergarten, which some theorized would produce tangible results in student performance later.9 And what about Lyndon Johnson’s Head Start program launched in 1965? In December 2012, the Health and Human Services Department published a 346-page report comparing those who went into the Head Start program to those who did not. No measurable differences were found.10
Education-Sector Hiring and Gender Inequality
Some simplistically attribute the decline in our public education system to the shift of skilled students into private schools, but far more significant events were at work, raising different questions about equality and social mobility.
Public schools worked well in the United States and other Western countries until about the 1970s. Until then, French public schools, for example, provided far better education than private ones. Underperforming students often went to private schools because they were thrown out of the public system. One reason public schools performed better during this period is that the vast majority of highly qualified women had few options for working outside the home, other than being teachers or nurses. They accepted relatively low pay, difficult working conditions, and gave their very best.
After women’s liberation opened up new professional opportunities for women, some of the best left teaching careers. Of course, some very dedicated, smart women did stay in the education sector, but one would have expected more of these highly experienced teachers to become top executives at schools. In fact, however, that did not happen.11
Increasing bureaucratization, government and union constraints, and faddish theories of education shifted hiring for top positions toward credentialed administrators rather than skilled teachers, and made it more difficult for the best teachers to become senior executives. All of these factors made the sector less attractive to the most talented women, causing them to leave rather than fill more upper-level positions. In this way, far from promoting equality and social mobility, the education sector likely prolonged gender inequality, which, in turn, contributed to declining public school performance.
Colleges and Universities
The above problems in high schools extend into postsecondary education as well. Sixty percent of white males (and 65 percent of black males) do not graduate within six years of starting college (for women the numbers are 35 and 43 percent, respectively). Combine these numbers with the “real” rather than inflated high school dropout rates, and one is left with the stark conclusion that spending more on education does not create “assets” but, under the present institutional arrangements, creates liabilities instead. These liabilities include not only the debts that students or their parents incur—not backed by future incomes—but the menace of frustrated young generations, spoiled into prolonged adolescence and having high expectations left unfulfilled.
As of January 1, 2016, 43 percent of the roughly 22 million Americans with federal student loans were not making payments, and one in six borrowers (3.6 million) were in default on $56 billion of student debt. Also, a report from Pew Research Center shows that 26 percent of millennials (defined as those born in 1981 or later) lived with their parents, up from 22 percent in 2007, percentages that translate to 16.3 million young adults living with their parents, compared to 13.4 million in 2007.12 The change is being attributed to mismatches in what millennials studied and what job opportunities are out there, as well as to the debts the millennials took upon themselves. Among other things, these data also imply that the American education system is not ensuring greater social mobility and higher incomes. The frequently cited association between more diplomas and higher incomes may just be a correlation reflecting the fact that smarter people study harder—and study harder subjects—or that purchased educational credentials are skewing talent selection.
In fact, the increasing inequality in the United States and other Western countries might be partly explained by the fact that governments so extensively subsidize high schools and universities. After all, the best and brightest—or merely those who can afford the most private tutoring—benefit the most from these subsidies. On the other hand, the government offers no subsidy to someone who is not thrilled about studying in school but gets excited tinkering with cars or computers and wants to open a garage or a small business. It is the studious kid who gets the subsidy to add educational credentials—and the ones without high school and university degrees end up paying taxes for their studies.13
The consequences are predictable: inequality will increase and the distribution of wealth will become more skewed. One person will be compounding massive educational subsidies channeled through high schools and universities and turning it into more wealth. Meanwhile, from a young age, the grocery store or garage owner paid taxes as either an employee or a small business owner. Add to this the fact that lower-skilled—and increasingly mid-level—employees face increased competition from the rest of the world, and inequality becomes even more pronounced. It may be that reducing heavy subsidies to schools and universities could mitigate inequality worldwide.14
The above numbers also show that keeping the academically incapable, uninterested, and undisciplined in educational institutions—and perpetuating the myth that education leads to social mobility—backfires, producing a debt-burdened and frustrated young generation. Spending more time in educational institutions does not necessarily bring about more learning or higher growth rates, but instead more “stupidity”—a term I use with the precise meaning Milan Kundera gave to it: “Stupidity is not ignorance, but the non-thought of received ideas.”
It is not difficult to further illustrate the issues affecting the quality of learning at the university level. Consider this: over the last few decades, accounting and business administration are among undergraduates’ top majors. But do students specializing in accounting really have to spend four years as “business undergraduates”?
Accounting is a trade that one learns by practicing, rather than by passing multiple-choice exams. Until the 1960s, one could become an accountant by working, rather than studying at university, and most of the rest of what these undergraduate studies have been filled with can be easily acquired while working. It makes little sense for eighteen-year-olds to enroll in four-year business programs to start with. What does it mean for them to take courses in topics such as “management,” “strategy,” “organizational behavior,” or “the psychology of organizations”? And such topics are taught by lecturers who, more often than not, have zero experience in managing, executing, financing, or marketing anything.
Imagine if lecturers in medical schools never operated but merely wrote papers on “Optimizing Procedures in Operation Rooms.” The above pattern holds true for most business undergraduate studies: at worst, they can be offered in two or three years with impunity, and at best they would not exist in their present shape. Yes, students should learn the vocabularies of finance, accounting, and economics—but these could be complements to some “non-trade” studies or be acquired while working. Networking and creating teams appear to be the only benefits of such business studies, but these ends can be achieved in a better way through other institutional arrangements—apprenticing in accounting or finance, or working as low- or mid-level managers with specialized credits in other professions—in which students are taught and mentored by practitioners.
Rather than pursue more suitable arrangements and minimize wasteful programs, however, universities have dramatically increased administrative personnel and costs. Yet all the extra administrators have achieved almost nothing, as documented in Richard Arum and Josipa Roksa’s recent book Academically Adrift: Limited Learning on College Campuses (University of Chicago Press, 2011). They note that gains in critical thinking, complex reasoning, and writing skills have either been exceedingly small or nonexistent for a large proportion of students, with 36 percent of students experiencing no significant improvement in learning whatsoever.
Less Is More
Society would be far better off if its youth spent less time in today’s high schools, colleges, and universities, which are more educational in name than in practice. For most people, these institutions are mainly offering a prolonged and subsidized adolescence, rather than developing skills and discipline.
Finishing one’s studies in fewer years is also important because younger generations are in increasing competition with their peers around the world, previously held behind by the Iron and other dictatorial curtains. These foreign students do not have—and, unlike U.S. students, do not expect—the luxury of combining their education with several years of fun and leisure, financed by parents and taxpayers. A more efficient educational model would bring about greater discipline and less boredom, while allowing for greater freedom. Those interested in business can begin meaningful work earlier, while those interested in academic pursuits can begin real research rather than paying for more and more “credentialing.” Where should young people go instead of educational institutions? Work, apprenticeships, and other forms of network-building would all be more rewarding for students and society.
What if students could also complete their education, including useful undergraduate study, in less time—reducing undergraduate programs, for example, by just one year? Such a reduction could probably be achieved simply by allowing students the option of studying continuously and not taking summer breaks.
Consider a “Fermi” calculation about the monetary consequences of such a change: there are about twenty million people enrolled in postsecondary education in the United States, with approximately four million graduating every year, about three million of whom receive bachelor’s or higher degrees. Assume that from now on, each year three million students join the labor force a year earlier. How much annual income and how much wealth would this generate?
Assume that after graduation the average salary would be just $25,000. With three million students finishing one year earlier, this would add $75 billion of national income during that year. Assume now that the additional $75 billion in national income would be compounding at 5 percent over the next forty years. This would amount to more than $500 billion of wealth—for just one cohort of three million students joining the labor force a year earlier at a $25,000 salary. Moreover, instead of inducing older people to work until they drop dead, we should be letting younger people start work sooner, which would also address entitlement funding problems far better than the currently pursued alternatives.15
This brings us to execution: how to accelerate schooling while improving education? The Swiss and Israeli school systems provide insights. After primary education (grade 8), students are sorted according to their abilities, and some go to high schools (with streams in science, math, and the humanities), while others go to trade or vocational schools that collaborate with related businesses.
Adolescents whose talents and interests are not in general studies need not be forced to prolong their schooling, something that is detrimental to real education and discipline. Nor would this dual system close doors for late bloomers: if some change their minds and want to go to universities, they can pass a few exams later and apply.
Letting young adults gain experience in various trades does not imply that such students will end up earning less money, or that they will not be well versed in history, philosophy and arts (they can study such topics during their leisure time, which they may be able to afford more of if they are not forced to spend exorbitant sums on credentialing).
It is curious that many Americans resist such a dual system because of concerns that it might promote inequality—as if the present U.S. system does not. After all, “selection” is the main idea upon which many high schools and universities are based. Under the current system, everyone is only equal in being forced to pay exorbitant sums to university administrators via student-loan debt; the values of the credentials remain as unequal as ever, and those least suited to academic work are harmed the most.
Indeed, gaining experience in occupational fields may actually improve employment prospects and social mobility. For example, in Switzerland, 70 percent of young people aged 15–19 are training for occupations, whereas the number in Germany is 65 percent and, in Austria, 55 percent. In these three countries, youth unemployment rates are less than half of America’s 16 percent.16 Along similar lines, in 2012 the UK created apprenticeship programs for commercial pilots, lawyers, and engineers, adding to the existing program for accountants. These programs are now considered the equivalent of college education.
Combining schools with apprenticeship programs is an increasingly discussed alternative but one that is still too rarely implemented, although Colorado, among other states, is experimenting with apprenticeship models. In order to achieve such collaborations, employers must create associations through which student-apprentices would be paid or financed, perhaps with the trained employees paying it back in the form of equity or debt, without necessarily binding the young employees to the company where their training started. Immobilizing employees is not a solution. The tax regime would need to be adjusted for this to happen, however.
Another U.S. example comes from St. Louis, where technology entrepreneur Jim McKelvey convinced several large employers, including Enterprise, Monsanto, and Rawlings, that computer programming does not require a college education but rather working with an experienced programmer. These employers created an apprenticeship program called LaunchCode. The program admits young people with basic programming skills, pays them $15 an hour, and pairs them with experienced programmers for two years.
Schools should also offer more specialized credits that can be earned while working, gaining experience which is almost certainly more valuable than the business degree programs discussed above. And, when enrollments drop—as has been the case with two-year, full-time MBA programs—close the programs, just as the University of Iowa did in phasing out its business school this year. Costs can be drastically cut without impacting students’ education.
Let us end this section with a historical reminder. The university sector expanded so rapidly during the twentieth century because massive amounts of money were thrown at it, a combination of the GI Bill, the 1958 National Defense Education Act (after the Soviet Union’s launch of Sputnik), and later Great Society spending. In many cases, however, increases in students and faculty were not seen in math or the hard sciences, but in various fields that did little more than come up with new, obscure jargons—business schools being no exception to this heavily subsidized fad.17 Perhaps the 30 percent decrease in enrollment in MBA programs, and the closing down of such programs, is a first sign of the drastic retrenchment universities will go through in the coming years (business schools have been the first to react to other real-world pressures in the past, too).
Israeli undergraduates’ stellar performance suggests that completing undergraduate studies in three years does not mean weaker performance down the line. It is true that Israeli youth arrive at the university two or three years older and are more mature than their U.S. counterparts because of required army service (two years for women and three years for men). But this implies that young Americans should gain discipline and experience, not that they should stay longer in schools. The fact that such experience counts for more than formal studies in preparing young people to solve problems is also reflected in Israel’s becoming the “start-up nation”: Israel has the largest concentration of high-tech companies outside of Silicon Valley. With a population of about eight million, Israel has the third-largest number of companies listed on the NASDAQ, after the United States and China.
This experience also suggests the importance of networking, as many Israeli start-ups are founded by youth who have been in the military together, learning about discipline, punctuality, operating under stress, and other intangible characteristics beyond the purely intellectual. All these have an impact on that elusive notion we call “culture.” A compulsory national service of twelve or eighteen months would be more effective in shaping a disciplined, creative labor force than the present subsidized self-indulgence at colleges, where after the last presidential elections many well-known universities decided to cancel lectures, and give puppies and coloring books to whining students in their twenties.
It is a mistake to think that high schools, colleges, and universities are the only institutions where people can build networks. The military, compulsory national service, or apprenticeship programs may be far better at achieving this goal. In addition, military service, or some other form of compulsory national service for all (no exceptions), would put people from different sides of the tracks in close proximity, creating teams and networks necessary for future performance in all fields of life, and creating greater chances for social mobility. This is less likely to happen on campuses now, where students easily “Balkanize.” And yes, national service could teach young adults that rights come with obligations too.
In politics—as in business and private life—bankruptcy or failure, or the fear thereof, is the mother of invention, and U.S. educational institutions are rapidly approaching this terminus. These institutions have been very good at creating the myth that they are needed for social mobility, economic success, and intellectual achievement. In fact, they are better at creating such myths than advancing any of these goals, and have induced students, parents, donors, and governments to cough up vast amounts of money for shockingly poor results. Investing more time and money in these same institutions will not improve education. Resources should be focused elsewhere. The proposals outlined above would put the country back on the road to long-term prosperity, correcting severe mismatches and rebuilding the connection between talents and capital.
This article originally appeared in American Affairs Volume I, Number 4 (Winter 2017): 19–31.
2 “US Education Spending History from 1900,” USGovernmentSpending.com, http://www.usgovernmentspending.com/education_spending.
3 Motoko Rich, “As Graduation Rates Rise, Experts Fear Diplomas Come Up Short,” New York Times, Dec. 26, 2015. See also Theresa Harrington, “U.S. Math Scores Decline on International Test of 15-Year-Olds,” EdSource, Dec. 6, 2016, https://edsource.org/2016/u-s-math-scores-decline-on-international-test-of-15-year-olds/573768.
4 In Quebec, high school graduation also went up from 72 percent to 79 percent between 2002 and 2008. Apparently, schools gave out graduation diplomas when students were allowed to replace many usual high-school credits with “sociovocational integration training.”
5 Juan Perez Jr. and Kyle Bentle, “Chicago Public Schools Touts Improved Graduation Rate,” Chicago Tribune, Sept. 5, 2016. The article notes that the practice is now being revised.
6 Terrence Stutz and Holly K. Hacker, “Critics Scrutinize Texas’ Unusual Dropout Rates,” Dallas Morning News, Aug. 29, 2015.
7 Anya Kamenetz, “High School Graduation Rates: The Good, the Bad and the Ambiguous,” NPR, June 9, 2015.
8 Dan Seligman, “The Story They All Got Wrong,” Forbes, Nov. 25, 2002, presents detailed data.
9 See M. D. Fitzpatrick, “Starting School at Four,” Stanford Institute for Economic Policy Research Discussion Paper no. 08-05, Dec. 2008. There were two small experiments with about 100 kids in which results were better than the Georgia one. But those experiments cost $16,000 to $41,000 per child, per year—impossible to replicate.
10 “Head Start for All,” Wall Street Journal, Feb. 27, 2013.
11 “Few Women Run the Nation’s School Districts. Why?,” PBS News Hour, Dec. 30, 2016.
12 See Anna Louie Sussman, “‘Boomerang’ Millennials Get Cozy at Home,” Real Time Economics (blog), Wall Street Journal, July 29, 2015.
13 Math, engineering, and similar hard sciences deserve subsidies for military and strategic reasons, in particular, though I have never encountered any young adult who took such courses just because they were subsidized.
14 This sheds some additional light on statistical studies of the last few decades showing that people in Western countries who stay longer in schools or go to universities secure higher incomes. As noted, the erroneous inference has been that longer education is necessarily the path to greater income and social mobility. But these studies were done during a period that coincided with the expansion of government bureaucracies, which employed graduates knowing little but jargon. Until the late 1980s, the resulting compounding costs were covered, in part, by the flow of capital and talent to U.S. shores from communist countries, and the domestic talent had nowhere to go, and could be more easily taxed.
15 One or two years of additional, compounding earnings could do a lot to shore up entitlement programs, with a more positive impact than requiring people 65 and older to stay in the labor force longer: compounding would start earlier.
16 Some writing about education suggest that it is cheaper to keep young adults at colleges and universities rather than on the dole. Why that is the alternative, though, they do not explain.
17 See Reuven Brenner, “Making Sense out of Nonsense,” in Educating Economists: The Teagle Discussion on Re-evaluating the Undergraduate Economics Major, ed. David Colander and KimMarie McGoldrick (Ann Arbor: University of Michigan Press, 1992). See also Reuven Brenner, “Extracting Sunbeams out of Cucumbers,” in The Force of Finance: Triumph of the Capital Markets (New York: Texere, 2002).