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Educating Our Way Out of the Economic Crisis

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Co-authored by Robert Balfanz

The state of our economy -- with high unemployment, a looming fiscal crisis, a growing skills gap, and sticky ladder of social mobility -- rightfully preoccupies our national dialogue. One solution is clear -- we need to educate our way out of the economic crisis. The Chairman of the Federal Reserve, Ben Bernanke, said it well: "the best way by far to improve economic opportunity and to reduce inequality is to increase the educational attainment and skills of American workers." U.S. Secretary of Education Arne Duncan echoed this belief, saying we "need to educate our way to a better economy." They're right.

Over the last generation, the education-to-jobs equation has completely flipped. In 1973, most jobs required only a high school degree or less. Today, most jobs require high school and some college. Over the next decade, the U.S. needs 22 million students to earn a college degree to meet workforce demands, but is expected to fall short by 3 million. Ironically, at a time of high unemployment, 53 percent of leaders at large companies and 67 percent at small companies say it is difficult to recruit employees in the U.S. with the skills, training, and education their companies need. So how are we doing in addressing this need?

Our report released today at the Grad Nation Summit in Washington, D.C. shows progress and challenge in ending the high school dropout epidemic and highlights what's at stake to our economy. Progress is steady and increasing, but too slow to meet national goals. Low graduation rates not only cost individuals millions in lost earnings, but taxpayers billions in lost revenue, lower economic activity and increased social services.

The national graduation rate improved from 72% in 2001 to 75.5% in 2009. About half the states had increases in high school graduation rates, and 12 states accounted for the majority of new graduates over the last decade. But if the rate of progress achieved during the first decade of the 21st Century continues during the second, the nation's graduation rate will be closer to 80 percent than 90 percent -- equated with billions of dollars in lost revenue, lower economic activity and increased social services. In fact, the pace of improvements to the graduation rate must be accelerated more than three-fold to meet the national goal of a 90 percent high school graduation rate by the Class of 2020.

States and school districts in urban, suburban, and rural areas are boosting high school graduation rates, serving as a challenge that others can too. Tennessee and New York led the nation with double-digit gains (+18 and 13 percentage points, respectively) during this time. Wisconsin became the first state to reach the 90% high school graduation goal and Vermont is .4 percent shy of it. From 2002 to 2010, the number of high school "dropout factories" declined 23 percent with 790,000 fewer students attending them. Encouragingly, the rate of decline in dropout factories and students attending them was faster between 2008 and 2010 than it was between 2002 and 2008.

Students who graduate high school make $130,000 more than dropouts; college graduates make $1 million more. If each state had met the national goal of 90% high school graduation rates, we would have 580,000 additional graduates from the Class of 2011. In turn, these graduates would have earned $5.3 billion more in income with a high school diploma, as compared to their earnings as dropouts, creating a ripple effect through the national economy. They would have increased the gross domestic product by $6.6 billion by the midpoint of their careers. Sustaining the goal over additional classes would yield even greater benefits -- to individuals, taxpayers, and the economy.

Leadership matters and the Grad Nation effort includes General Colin and Mrs. Alma Powell of the America's Promise Alliance, Governor Bob Wise of the Alliance for Excellent Education, and organizations representing Governors, State Legislatures, administrators, teachers, parents and community- and youth-serving institutions. U.S. Secretary of Education Arne Duncan, Director of the National Economic Council Gene Sperling, and the President of the Corporation for Public Broadcasting Patricia de Stacy Harrison will share their continuing efforts to strengthen education and our economy at this week's Grad Nation Summit of more than 1,200 partners in this effort.

With the support of these leaders, a Civic Marshall Plan to build a Grad Nation is mobilizing institutions with significant reach into states, districts and schools to target their efforts at the 1,550 high schools that account for the bulk of the nation's dropouts, and at their feeder elementary and middle schools. United Way has agreed to work cooperatively with local communities to identify these feeders and help mobilize the mentors and tutors, together with City Year, Communities in Schools, and Big Brothers Big Sisters, to help those students whose attendance, behavior and course performance in reading and math signal signs of early trouble. Businesses, such as AT&T, Target, State Farm and Pearson, are stepping up to make education a stronger data-driven enterprise and help students with reading, math and the connections between school and work.

Across the educational pipeline throughout the nation, it is time to redouble our efforts to ensure all children have access to a quality education. Their dreams, and the strength of our communities, economy and nation depend on it.

John M. Bridgeland, CEO, Civic Enterprises, and Robert Balfanz, Director, Everyone Graduates Center at Johns Hopkins University, are co-authors of the report, Building a Grad Nation: Progress and Challenge in Ending the High School Dropout Epidemic: Annual Update 2012 along with co-authors Mary Bruce of Civic Enterprises and Joanna Hornig Fox of the Everyone Graduates Center. All of the data in this blog can be found in the Building a Grad Nation report found at