Saturday, January 1, 2011

Failure to educate all children will impoverish all of us

I've been writing in my last few blogs about the importance of pulling together as a community and assuring that we educate all children, regardless of race, creed, or national origin. In my previous post, I pointed out that a community that experiences increasing diversity can find it difficult to come together and make sacrifices to assure that all children get a first class education. Today, I'm going to draw from two recent front-page articles from the Minneapolis Tribune and the 2009 bipartisan Legislative Budget Commission Report to discuss why it is important that we overcome our difficulties and educate all of our children.

The first part of the 21st century provides us with a perfect storm of challenges to our economic future and so far, the only solution proposed to these challenges is to dramatically improve the education of the current generation of children. The challenges we face are:
  • The next decades will witness a significant change in the percentage of our population who are elderly and dependent.
  • Related to that, for the last several decades, the US birthrate has been declining.The number of children has been increasing, partly as a result of immigration, but in the past, population growth has been a kind of ponzi scheme, in which each new generation has so much larger than the last, that the new generation can afford to support the older generation. In addition, America has been at the cutting edge of technology, allowing us for a century to make massive productivity gains in the work force.
  • The demographics of the next generation is changing, with more of immigrant, Hispanic, and African American descent
  • The national government under both political parties has been implementing a more aggressive free trade policy for the last several decades allowing countries with very low wages to compete against American manufacturing, mining, and other economic pursuits that rely on unskilled or semi-skilled labor. This has resulted in out migration of industries that make shoes, textiles, clothing, for example, as well as industries that depend on routine assembly and heavy labor, and has driven down the wages for employment in the remaining US labor-intensive industries
  • Numerous formerly third-world countries are increasingly capable of competing in industries that require highly trained workers, so that the United States and Europe no longer has a corner on industries that require highly skilled labor.
In an October article, the Minneapolis Tribune carried a story that points out that many US corporations now have become internationalized. That article, Stream of US Jobs Overseas Isn't abating, points out that in previous recessions, the fortunes of American corporations seemed to be tied to those of American workers. As the fortunes of American corporations bounced back, so too did employment. But this recovery seems to be leaving a lot of Americans behind. The article reports that recent Commerce Department data show that employment at the foreign subsidiaries and affiliates of U.S. multinational firms grew by 729,000 in two years, to 11.9 million in 2008 from 2006. Over that same period, domestic employment by such firms slipped by 500,000 jobs, to 21.1 million.. This new trend, suggests that the fortunes of the great American corporations, the auto companies, technology companies such as IBM, GE, and Dell, and financial service companies, are no longer tied irrevocably to the fortunes of the United States economy.

"The off-shoring of American production and jobs has been going on for more than two decades, with service firms more recently pushing the trend. Experts say more off-shoring could help U.S. firms better compete in the global economy, thus boosting sales and profits that will sustain them and generate new business."

But when American corporations become internationalized, what benefits those corporations does not necessarily benefit most Americans. A Strib December article, US. Firms are Hiring--overseas discusses the importance of maintaining educational excellence here in the United States if we are to compete in the new global marketplace:

More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the United States. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The article continues:

The Economic Policy Institute, a Washington think tank, says U.S. companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the United States. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the Institute's senior international economist. "There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.

These newspaper articles are merely instances of a warning sounded in the bi-partisan Budget Trends Commission. The Commission Report warns that Minnesota is currently experiencing a major, long range demographic shift which has grave economic consequences for the state, unless we do a significantly better job of educating all of the children--all of them.

Today, as the first of Minnesota’s 1.4 million baby-boomers begin to reach retirement age, the state has reached an inflection point - a moment of profound change that produces an immediate shift from recent trend. This milestone requires a complete reassessment of the way the state’s economy is perceived. No longer can Minnesota sit by and watch as the crest of this giant aging wave grows larger. As Minnesota’s population begins to transform, new, long ranging factors will begin to weigh more and more heavily on the state’s tax base, spending needs, and overall economic progress. The wave is beginning to break and policymakers have not adequately prepared for the overwhelming implications this will have on state government finances.

These demographic changes will create a rising dependency ratio that can only be overcome by increasing the productivity of the younger generation, and to do that, we will have to do a much better job of educating all children, regardless of race, color, class, religion, or immigrant statues. The Report explains;

A rising dependency ratio will have profound implications on virtually all aspects of state and local government. For instance, a larger dependent population will put upward pressure on government expenditures. Dependent populations rely more heavily on health care, education, economic assistance,and social service programs. .....Current trends signify that by 2020 the number of seniors in the state of Minnesota will exceed the number of school age children for the first time. However, this change is due to the unprecedented number of individuals reaching age 65, not to a drop in the school age population. Over the next twenty years, the number of school age children in Minnesota will actually be increasing.

Some people think that this is problem that applies only to racial minorities, or the poverty class, or immigrants. There are some who think that they can move away to special communities and sort of ignore this problem by concentrating their efforts on people who look like themselves. Perhaps those of us who are more fortunate, could create a chain of private schools and build walls around us, in hopes that we can escape from the part of our society that is less educated, and poor. But there is no escape, because all of us are going to become part of the dependent generation eventually, and when we do, the wealth that is available to support us will come from the younger generation. If only half of that generation is well educated, those of us in the elderly dependent generation will be half as wealthy. This issue isn't about being generous or fair to minorities and immigrants, its a matter of self-protection.

Since the 1980s, Minnesota’s economy has benefited from having a peak level of workers in their peak years of productivity and earnings. This has fueled extraordinary economic growth and productivity gains. As the boomer generation begins to exit the labor force, however, a very large cohort in their late 40s to early 60s will be followed by a much smaller, younger, and less experienced generation currently in their 20s and 30s. As a result, the labor force will begin to grow at a much slower pace than encountered in the recent past and it will be necessary that new workforce entrants are adequately prepared to be productive contributors to the Minnesota economy.

The demographic changes referred to above make it absolutely essential that we educate everyone. The penalty for not doing so is impoverishment of all of us, and especially the next generation of elderly. The Commission report continues:

Historically Minnesota has had a very well educated population, with a high percentage of the population having a high school diploma. High school graduation rates, however, are declining in Minnesota and throughout the United States. This decline will threaten our ability to compete in the global economy. One particular concern is the drastic difference in graduation rates between white and minority students. High school graduation rates for black students, for example, are currently 27% lower than graduation rates for white students in Minnesota. There is an even wider gap reported in some publications that use a different methodology for measurement.

The upshot of all of this is that we cannot afford to waste any of our children. Immigrant children, minority children, children who don't speak English, children of different religions--we are going to need all of them to be productive, whether we like it or not.

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