Education Slowdown Threatens U.S.

via the Wall Street Journal

The emerging train wreck of US Education is the surest sign that the crisis in US capitalism still underway is far deeper and more fundamental than a cyclical phenomenon.  It suggests that, perhaps for the first time in US history, our society is not able to reproduce itself at a higher cultural or economic level. All progress depends on the rising abilities and productivity of our people. The failure of US education is starkly underscored below and betrays the true costs of the refusal of the 1% to invest in the abilities of the people. Inequality is deepening, and this story gives strong evidence that the 99% -- and their children -- will fall even further behind in the coming generations.

Higher education in the U.S. has a problem: More students are getting into college, but they're not finishing. One community college in Maryland has developed a program aimed at getting students to graduation day. WSJ's Neil Hickey reports.

Throughout American history, almost every generation has had substantially more education than that of its parents.

That is no longer true.

When baby boomers born in 1955 reached age 30, they had about two years more schooling than their parents, according to Harvard University economists Claudia Goldin and Lawrence Katz, who have calculated the average years of schooling for native-born Americans back to 1876.

In contrast, when Americans born in 1980 turned 30 in 2010, they averaged about eight months more schooling than their parents.

Michael Friberg for The Wall Street Journal

Alex Gavic, 21, decided not to go to college so he could snowboard full-time in the winter in Park City, Utah. He earns money landscaping in the summer.

This development already has broad ramifications across the U.S. job market: Those with only a high-school diploma had an 8% unemployment rate in March, roughly double that of college graduates, who had a 4.2% unemployment rate. Workers with bachelor's degrees earn 45% more in wages on average than those of demographically similar high-school graduates. And in today's highly automated factories, many manufacturers demand the equivalent of a community-college degree, even for entry level workers.

More serious consequences may be felt in the future. Without better educated Americans, economists say, the U.S. won't be able to maintain high-wage jobs and rising living standards in a competitive global economy. Increasingly, the goods and services in which the U.S. has an edge rely more on the minds of American workers—than on their muscle. "The wealth of nations is no longer in resources. It's no longer in physical capital. It's in human capital," says Ms. Goldin.

The reasons American education levels are no longer increasing as they once did are numerous: Despite years of effort, high-school dropout rates remain stubbornly high. College tuition is rising and the prospect of shouldering heavy debt discourages some high-school graduates from enrolling in college or sticking with it.

Dan Krauss for The Wall Street Journal

Mary Brown, center, didn't want college debt, so she got an associate degree in massage therapy

There is also growing skepticism among some Americans about whether a college degree actually translates into a well-paying job. Particularly during the recent recession, there have been gluts of college graduates in some industries and shortages in others.

For instance, the typical worker with a bachelor's degree in petroleum engineering earned $120,000 a year and those with a degree in math and computer science earned $98,000, according to 2010 census data analyzed by Georgetown University's Center on Education and the Workforce. In contrast, the median worker with a degree in counseling psychology earned just $29,000 and those with degrees in early childhood education earned $36,000.

"Not all bachelor's degrees are the same," Georgetown University's Center on Education and the Workforce said in an extensive analysis issued last year. "While going to college is undoubtedly a wise decision, what you take while you're there matters a lot, too."

Mary Brown, 25, of Woodland Hills, Calif., saw friends who finished college with massive debts and were unable to find jobs in their fields, if at all. She took a different approach, earning an associate degree and a certificate in massage therapy from Anthem Career College in Nashville, Tenn.

"I wanted a college that taught me how to do the work, but didn't make me pay to take a lot of other classes in subjects that are irrelevant to my career," she says.

In contrast, her mother, Irena Tolliver, has a bachelor's in elementary education and a master's in reading education. When Ms. Tolliver was growing up, her parents, Belarussian immigrants, told her to "take advantage of the great educational resources that were available," Ms. Tolliver recalls. "That's what America was all about to them."

But Ms. Brown feels differently. After graduating, she landed a $20-an-hour job at a Rockford, Ill., spa, then moved to California but was unable to find a massage-therapy job. So she recently moved back to Illinois.

All but about $5,000 of the $21,000 she borrowed for her 18-month program has been paid back.

[ED] Michael Friberg for The Wall Street Journal

Mack Smith dropped out of college and now works at Whole Foods training new hires.

"I was working in a career I loved, making a pretty good living, while a lot of my friends were in college and not loving it so much," she says. "Now they are facing tons of debt and I don't have to worry about that."

Ms. Brown isn't unique. Among Americans who turned 25 in the 1970s, only 5% had less education than the parent of the same sex, according to an analysis by Michael Hout and Alexander Janus, sociologists at the University of California, Berkeley. Among those who turned 25 in the 2000s, 18% of men and 13% of women had fewer years of school than their parents.

There is a limit to how much schooling a person can get and to how many Americans have both the ability and interest in a four-year college degree. But the U.S. is nowhere near that point.

Twenty countries have higher high-school graduation rates than the U.S.—including Slovenia, Finland, Japan, the U.K. and South Korea, according to the Organization for Economic Cooperation and Development. In the U.S., about one in five ninth-graders drop out before getting a diploma.

About 30% of American adults have four-year college degrees, and there is little evidence that is a natural ceiling. Thirty years ago, the U.S. led the world in the percentage of 25- to 34-year-olds with the equivalent of at least a two-year degree; only Canada and Israel were close. As of 2009, the U.S. lagged behind 14 other developed countries, the OECD says.

President Barack Obama has vowed to change that. "By 2020," he has said, "America will once again have the highest proportion of college graduates in the world," defining that broadly to include two-year degrees. He has proposed that all states require students to graduate from high school or stay in school until age 18 (as 21 states do already) and pushed successfully for increases in federal student aid.

While not every college grad does better in the job market, statistics consistently show that, on average, the more educated the worker, the better he or she fares in today's job market. For example, 54% of high-school graduates over age 25 were working in March, the Labor Department says, while the rest were either looking for work or out of the labor force altogether. Among those with some college, 64% were working while 73% of those with a bachelor's degree or more were working.

The problem has evolved over the past few decades. Until the mid-1970s, the share of American men and women in their late 20s with four-year college degrees rose steadily, fueled by federal student aid for veterans after World War II and Korea and a further expansion of student aid in the 1960s.

Michael Friberg for The Wall Street Journal

Alex Gavic with his snowboard in the parking lot of the Canyons Ski Resort in Park City, Utah.

Then something changed, particularly among men. The fraction of 25- to 29-year-old men who had earned four-year degrees began a two-decade-long slide around 1975. After that, fewer young men sought refuge from the Vietnam War draft by going to college. Moreover, a decline in the size of the bonus that college graduates commanded, compared with high-school graduates, provided less reason to go to college.

More men began going to college in the early 1990s. Changes in the economy and technology as well as a shortage of educated workers pushed the wages of college grads well above those of high-school graduates. The fraction of men in their late 20s with four-year degrees has been climbing since 1994, hitting 27.8% in 2010. Despite the uptick, however, that is barely above the 27.5% reported for 1976, according to the Census Bureau.

For women, the trend is strikingly different. While male college-going fell off in the 1970s—in part because men were more likely than women to think they could get well-paid construction or factory jobs without degrees—women kept going. In 2010, 36% of women in their late 20s had earned at least a bachelor's degree, up from 20% in 1976.

Michael Friberg for the Wall Street Journal

Mack Smith at his home in Salt Lake City, Utah.

Men drag down the average, though. The net result is that a supply of educated workers is rising much more slowly than the apparent demand. Scholars blame leaks and clogs along the entire educational pipeline.

While college enrollment has risen lately—as often happens when people flee a lousy job market—completion rates are disappointing. "We've become very good at getting people to start college," says Harvard's Mr. Katz. "We are not very good at getting people through college."

About 70% of high-school graduates enroll in a two- or four-year college soon after finishing high school, but many never get a degree or any other credential. At four-year colleges, 43% of those who enrolled as freshmen in 2002 hadn't received a degree six years later, according to the U.S. Department of Education.

Mack Smith, 22, whose father has a bachelor's degree in political science, did one semester at Southern Utah University, dropped out, joined the Marine Corps briefly, and then spent a semester at Salt Lake Community College. Today he is working at Whole Foods training new hires in the meat department. He talks about going back to college, though. "I want to be able to take my kids hunting and be able to afford a house and a car," he says. "I'll need more education to get a job like that."

Dan Krauss for The Wall Street Journal

Mary Brown packs up her belongings in her apartment in Woodland Hills, Calif., as she prepares to return to familiar territory in Illinois.

His dad, Michael Smith, wishes his son had stuck with college. "Sometimes," he says, "it takes kids a while to figure out what they want and then figure out how to get it."

Lately, the rising cost of higher education has emerged as an increasingly visible obstacle to going to—and staying in—college, and the spotlight on the mountain of student debt has discouraged others.

Tuition is up, particularly at public colleges that draw the most students. Over the past 10 years, for instance, average published tuition and fees (not counting room and board) at four-year public colleges rose by 72% to $8,240 from $4,790, adjusted for inflation, according to the College Board. Sticker prices are misleading because student aid has become more bountiful. After grants as well as tax deductions and credits, the average net price rose by a much smaller sum—$1,160—to $2,490 over the decade, but that is still an 87% increase.

Governments and colleges have offered more financial aid, but the complexity of the American system—a dizzying array of grants and loans, tax deductions and scholarships—confuses and sometimes scares off some potential college-goers, says University of Michigan economist Susan Dynarski.

Dan Krauss for The Wall Street Journal

Mary Brown gets help from her brother, Gregory Tolliver, 12, ahead of the move.

Today, student debt outstanding now exceeds Americans' total credit-card debt. In 2009-10, about 55% of public four-year college students graduated with debt; on average, they owed $22,000, the College Board says.

Alex Gavic, 21, is one of those who don't want to take on college debt. As a teenager, he had fleeting thoughts of studying marine biology in college. Instead, he dropped out of high school—eventually receiving a high-school diploma in a second-chance program at a community college.

Today, he makes $12 an hour at a Park City, Utah, landscaping firm during the summer so he can snowboard daily during the winter.

"The greater society told me I had to go to college if I want to make it in life, but it's not true," said Mr. Gavic, who competes semiprofessionally in snowboarding. "I don't care about making a lot of money because I'm happy. I'm just living the life."

Mr. Gavic said he hopes to have his own landscaping business one day. But in the meantime, he doesn't envy his peers who went to college, many of whom have loans to repay and still haven't found jobs.

"You spend all this time in school, then you are in debt, then you have to find a job to spend 20 years paying it back," he said. "That never made sense to me."

Write to David Wessel at and Stephanie Banchero at

A version of this article appeared April 26, 2012, on page A1 in some U.S. editions of The Wall Street Journal, with the headline: Education Slowdown Threatens U.S..

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