In a recent article, Gregory Ferenstein raised the question of the merit of worrying about the American school system lagging behind the rest of the world. To support his argument the author states that it has never mattered that America has not been at the top of the educational excellence pyramid, because we have always maintained our position as a leader in innovation and as the dominant economic force in the world.
In order to answer the question “does education matter?” one has to look at two very distinct schools of thought. One of which from Mr. Ferenstein simply derides the need for a formalized education and the other which holds education on a sacred pedestal of importance. Since Mr. Ferenstein has eloquently stated his point of view in his article “Why it’s never mattered that America’s schools lag behind
”, it is important in the interest of fairness to consider the other side of the coin first.
There is a strong argument that can be made for the importance of education
, especially when it comes to the basics
and with regard to specific educational skills like mathematics. Switzerland for example has been ranked as 14th in the world for its educational excellence. This performance has been further enhanced by the Swiss Financial Institute and Swiss banking institutions offering advanced PhD degrees to students with an emphasis on teaching wealth management and banking. Naturally, one can see a slightly less than altruistic motivation in offering this particular professional path, but when one looks at the results they speak volumes to the need for these types of educational platforms. In 2009, at the height of the global market shrinkage, Switzerland experienced some of the lowest recorded unemployment rates (at 5.8%). By comparison American unemployment rates surged to 10.2% during October of that same year.
Along those same lines, UNICEF
notes that China has a 99% literacy rate in adults aged 15-24. In the middle of the global downturn of 2009, with economies all over the globe shrinking China was able to maintain a significantly higher Gross Domestic Product. Bolstered by a surge in the fourth quarter, China’s GDP
grew at a rate of 8.7% that year which is very significant when comparing it to that of the United States. GDP for the U.S.
shrank at a rate of (-5%) that same year.
Countries like India, China and Brazil have experienced a great deal of resilience in the tough economic times and have continued to have higher than average GDP performance. The rest of the world meanwhile has struggled, especially the United States and Europe which have been plagued by lower GDP and high levels of unemployment. But, is this a clear indicator that education has a direct impact upon the economy and therefore is a cornerstone on which we should focus a greater portion of our attention when striving to build a stronger economic base for society?
Manuel Rivera, CEO of Global Partnership Schools, definitely thinks so. In a well written article entitled “A Critical Connection: Education and the Economy
”, Mr. Rivera draws on a study done by the Alliance for Excellent Education which found that cutting the dropout rate, in American schools, in half would lead directly to $5.3 Billion in economic growth. Mr. Rivera goes on to state
Connecting classrooms to the real world is foremost to strengthening our economy. The youth of this nation, our future, deserve nothing less.
All in all this is a very convincing argument. One that could cause a reader to be tempted into thinking that the economy, growth, and the global financial markets are all dependent on a solid educational foundation. Who would further be convinced that end we must ensure a well rounded education for our children, dedicating their time and our finances to procuring the finest education possible and thereby securing a spot for America in the top spaces of educational excellence. Which in turn would help us build a stronger and more sustainable national economy and result in a stronger country. The challenge to this point of view however, is like with most coins there is a second side to the argument and it would be remiss for us to ignore it. In light of the continued mantra about how bad our education system is, and with the continued covetous looks America’s political elite are giving European educational practices, it behooves the people to take a closer look. India, China and Brazil are flirting with their own recessions
, potentially debunking the theory that education makes a country like China recession proof.
Before we go into the economics, and in the interest of a focus on schooling, I wanted to take a look at a group of people that are very interesting when viewed through an academic lens. These individuals, in my mind, create a stark contrast to the belief that education is the be all and end all when it comes to wealth creation, stability, and sustainability on a national or even global scale.
The first person is Azim Premji
, the chairman of WIPRO and the man who, virtually single handed, turned WIPRO from an organization that sold vegetable oil into a multinational IT company with a revenue of over $7 Billion in 2012.
Second let’s look at Francois Pinault
, the chairman and chief executive officer of PPR in France. If you have never heard of either of them, it wouldn't be surprising. PPR is a holding company that among its many holdings also owns Gucci, Puma, and Yves St. Lauren to name a few. PPR’s current holdings are valued at around 24.9 billion euro. Francois Pinault is considered to be one of the richest men in Europe and personally has the largest, and arguably the finest, art collection in the world.
Let’s move on to another interesting individual, Roman Abramovich
. Abramovich started his career in the Soviet Army, where he sold stolen gasoline to the officers. A long and storied career in business later and Roman Abramovich is today worth over $14.2 billion dollar’s. He has been considered Russia’s richest man with heady ties to the Kremlin and a personal relationship with Boris Yeltsin, former president of Russia.
To keep things interesting, let’s talk about Anne Beiler
. Anne started a highly successful company that does roughly $356 million in business each year and is virtually a household name, well a mall hold name at least. Auntie Anne’s pretzels have 300 franchisees with more than 1200 locations across the United States and in 24 other countries.
And finally a quick, rather brief look at two more noteworthy individuals.
, valued at $14.2 billion dollars is the co-founder of Microsoft
is the multi-billionaire founder of Yucaipa Foods who today counts among his employees people like former president Bill Clinton
The question is, what exactly do any or all of these people have in common; Other than the fact that they are al fabulously wealthy, successful individuals who plan a dominant role on the world stage? The answer is relatively simple, and most readers would have taken an educated guess already. Each of these individuals dropped out of school and never formally completed their education before going on to achieve amazing things. Their lives were filled with prosperity, their companies employed thousands of people, and their contributions to economic growth are impressive. It should be noted that some of them went back to school, but ultimately the schooling itself had very little to do with the outcome of their lives or the impact they have played on the world stage. These are a mere handful of individuals found on pages upon pages of people who have done the impossible in achieving great success without the blessing of academia.
Back to the national level of economic output and its correlation to education, where small studies have found that there is a consistently positive relationship between schooling and national educational growth. Importantly, however, there are significant caveats and exceptions to this rule. In a recent article by the Brookings Institute
, it was found that Germany has a much stronger economy than France but half as many adults with a college degree. The piece also found that while France had increased its college educated adults by 13%, Germany’s population had not moved at all. Ironically though, in the area of financial growth Germany continued to surpass France consistently during the same 10 year period.
The real concern, for American families, is the cost of a college education in this country today. The estimated cost of college tuition, room, and board in 2010-11 has been estimated to cost around $13,600 for a public university. This price tag rose dramatically, to $36,300, for private universities. With many families unable to afford these kinds of prices, students are forced to take out infamous student loans
When a student takes out a loan in amounts often exceeding $50,000 and at rates of around 6.8%, it means having to pay back this assistance over a period of 10 years plus. During this payback period the student, who would now be a working adult, would be re-paying upward of $600 to the lending institution every single month. They would need to make upward of $90,000 per year to sustain this kind of payment schedule or, as is the case with the majority of student loan holders, would simply refinance and extend their debt to a longer period. Indebtedness begins young in America.
This system virtually forces a person to stay within the established norm, holding a “nice, steady” job and continuing to pay back the loans which got them to that job in the first place. After being indentured for over 10 years, working the system and building a life around the system, it is highly unlikely that this individual is then going to become a free thinker or inventor. They would be highly unlikely start a company or take risks in similar fashion to the high net worth individuals listed above. To be clear, slavery is alive an well in America. Today we are bonded by loans, debt and high interest rates given to us in the guise of promoting our well being and forced upon us by those who chose to mock and deride a lack of higher education as shameful.
Not everyone has the ability or the intellect to be a Paul Allen or a Bill Gates, however, we deserve better than to be stifling Americans youth with continued educational debt, in a system designed to create a class of clerks and mid-level management.
According to that same article by the Brookings Institute, a growing number of researchers are starting to feel that America needs to focus its policy attention on a more explicit and specific education system that trains people into market centric careers. If the goal is to enhance the economy and strengthen the work force we need to shift our focus off being among the top nations in any overall education category. Studies have shown that educating people within specific fields to meet certain job requirements, offering occupational certifications and focusing on testing in cognition and mathematics have a far higher yield when it comes to overall contribution to the national economy. This is, in fact, backed up by the very first case point we looked at earlier in this article.
Switzerland has focused its attention on teaching its students wealth management and banking, and as a result has seen an overall increase in bankers. As such it has also seen a lower unemployment rate and high growth within those sectors specifically. What is needed is specific training for jobs with a high market demand versus using a blunted tool over overarching education that costs too much and teaches far too little.
When it comes right down to the question, “does education matter?” regardless of political point of view or social persuasion It is a slippery slope that has to be tread with a level of delicacy. On the one hand, one cannot agree with Ferenstein’s retort that education has never mattered in America. Education has, and will continue to, make a difference to the middle classes. It will continue to raise the standard of living, and it would be fundamentally wrong to burden our children with a lack of education. It is an embarrassment when our children cannot even point to Iraq
on the map after we have been engaged in a war in that country for the better part of the last decade. This is a circumstance that cannot and must not be allowed to continue.
By the same token one cannot argue for the merits of a college education that practically enslaves a person. By creating a life started on the sharp edge of debt and forcing them to pay back the price of an education, we are creating a nation of non-thinkers that are slaves to the system. A system, by the way, that virtually teaches them nothing about innovation, creation and outside the box thinking. While those in the ivory towers may rage against this point of view, it cannot effectively be argued that education is the only means to success.
The value of education is the ability, above all, to make the right decisions about our own fate and future. In that sense education is very important. We as responsible parents to the next generations must offer and insist on them, at the very least, obtaining a high school degree. At which point taking the lead in exploring the costs, pro's and cons, and value of an education, we can put the decision in the hands of our youth. If we have done a good job of teaching them, both academically and practical real world lessons, our future generations are no fools and will take the path that best suits them and their needs. That, ultimately, is the very best we can hope for in any eventuality.