Learning for Life: How Continuous Education Will Keep Us Competitive in the Global Knowledge Economy

SECTION I

THE CONTEXT

The slow job growth in the recovery from the Great Recession of 2008 underscores the disarray of the education and training system in the United States. This section explores how we arrived at this point—and how global economic competitors compare. As you read, please consider the following:

• How has the workforce readiness and development model evolved throughout the history of the United States?

• How do the education and skills of the workforce in the United States compare with the workforce in other developed nations?

CHAPTER 1

How Did We Get Here? A History of Education and Training in the United States

Michelle LaPointe and Jason Wingard

For millennia, skills learned as a novice were honed over decades to increase mastery but were essentially the same skills. Early in the 19th century, the majority of American workers were still employed on farms or self-employed as tradesmen or artisans. The industrial revolution changed the nature of work (see Exhibit P-2 in the Preface). By the end of the 19th century, most people were employed in low-skilled manufacturing work.¹ The pace of change in the economy only increased in the 20th century, when all types of jobs were transformed by technology. Now, in the new knowledge economy of the 21th century, change is constant, and we must continuously improve our professional skills to keep up.

The Economy Recovers to a New State

Although industrialization was introduced almost a century earlier, we can trace the dramatic shift in work and education to the Long Depression of 1873, when a dramatic decline in global demand for silver resulted in a series of bank failures and widespread unemployment (see Exhibit 1-1). As the United States recovered from that depression, the economy was dramatically restructured and became more industrialized. This restructuring opened up categories of work that barely existed earlier in the century—and certainly not on the scale required to industrialize the economy. Eager for work after the Long Depression, workers moved to the new centers of manufacturing from across the United States and Europe. Initially, these new jobs were primarily semi-skilled.² Although immigration produced an almost unlimited number of workers, few trained artisans or laborers sought employment in these new types of jobs. Given a limited supply of skilled workers, factory owners further reorganized the work. Semi-skilled positions were specialized into specific routine tasks to allow for the hiring of less skilled workers.

Exhibit 1-1.   Gap Between Job Skills and Education.

In contrast to the earlier agrarian economy, when youths learned trades and crafts through apprenticeships that lasted years, in the beginning of the industrialized age training was performed almost entirely on the job. Given the low-skilled nature of the work, there was little promotion potential and very flat compensation. Nationally, in the decades immediately following the Long Depression, annual worker turnover exceeded 100%, and 75% of the turnover appeared to be due to employees quitting.³ Despite the constant flux of workers, employers paid little attention to developing the capacity of their workforce or retaining workers in their factories.

This changed during World War I, when immigration into the United States halted. Without a steady stream of workers, employers had to develop their local job markets, enhance the capacity of existing labor, and retain the workers in their factories.⁴ Companies had to compete with one another to hire and retain competent employees. The value of labor and the power of workers increased. Strong unions and increased labor protections further strengthened the position of employees. Employers began investing in their workforce by providing pensions, better working conditions, and training for specialized roles within the factory.

National Policies to Support Workforce Development

The employers’ investments in developing their workforce set a precedent for labor policy in the United States. We have a history of very limited public involvement or investment in improving the quality of work. Formal evidence for this dates to the Cardinal Principles of Secondary Education of 1917, issued by the national Commission on the Reorganization of Secondary Education during the period when secondary education became common in the United States. This period was marked by a debate about the role of education and about whether the focus should be on developing academic skills or work-related skills. The cardinal principles explicitly laid the burden for developing work-related skills on individuals with little if any support from the school*:

The student gets to know him- or herself and a variety of careers so that the student can choose the most suitable career. The student should then develop an understanding of the relationship between the vocation and the community in which one lives and works. Those who are successful in a vocation should be the ones to teach the students in either the school or workplace.⁵

In keeping with those principles, in the United States job training, professional development, and adult education have typically been either offered by employers to increase organizational capacity or paid for by employees themselves to increase their knowledge and skills. The emphasis on private individuals and private companies has impeded the creation of a system for lifelong learning. Employer-sponsored programs have tended to be very job-specific, rather than providing portable skills and credentials or expanding an employee’s career path within the organization. Outside of employer-sponsored training, individuals have primarily relied on trade schools and community colleges. Despite an intention to allow the market to provide training for needed skills, the reality is that, given a lack of information for consumers and loose credentialing of institutions, the market for job training, professional development, and adult education in the United States is inefficient and does not meet the needs of workers.

However limited, public investment in training and education for adults dates to President Franklin D. Roosevelt’s New Deal and was embedded in the Works Progress Administration, the Civic Conservation Corps, and the National Youth Agency. These programs were run through community organizations rather than connected with existing education institutions. These programs touted a new technique in education—that is, education through work.⁶ New Deal investments in job training ended when World War II began.

Job Training for the Disadvantaged

In the 1960s, the federal government created new job training programs with the primary goal of getting the unemployed into jobs—any jobs. These included the Manpower Development Training Act of 1962, which only funded short-term (10- to 15-week) programs and offered job-specific training. In 1973, the Comprehensive Employment and Training Act (CETA) consolidated existing job training programs and gave a greater role to states in designing and implementing programs. In 1982, the Job Training Partnership Act (JTPA) encouraged public–private partnerships to assist employers with worker training. In the 1980s, the federal government created numerous education and training programs, mostly targeted to provide second chances to the unemployed or those who failed to develop basic literacy and numeracy in high school. By 1995, the General Accounting Office reported that the federal government was spending $20.4 billion on 163 training programs, spread across nearly every federal agency. There was no effort to coordinate these programs into a coherent system. The Workforce Investment Act (WIA) of 1998 provided additional funding for training for those who were unemployed and had limited job skills, but the services were mostly informational. Allowable education programs included the general equivalency diploma (GED), adult remedial education, and English as a second language (ESL) classes.* WIA also created and funded One-Stop Centers and Individual Training Accounts. During this time, the federal government implemented Work First and the Personal Responsibility and Work Opportunity Reconciliation Action, which undermined previous efforts for workforce development by emphasizing the need to take any job, rather than building skills for a more stable career.⁶

Formal Education in the United States

In addition to job-based training and development, formal education became more relevant to career readiness in the early 20th century. A recurring debate raged (and still rages) among policymakers: What is the purpose of public education? Many called for increased vocational education in the developing concept of high schools. In 1917, Congress passed the Smith-Hughes Act, which devoted the first federal dollars to vocational education. It was also during this time that secondary education became more common.

In the 1920s, as comprehensive high schools were built across the United States, it became expected that young people would earn a high school diploma. Although secondary education was not mandatory during the Great Depression, it was strongly encouraged, largely to limit the entry of young workers into the already tight job market.⁷

After World War II, U.S. policy encouraged college as a way to expand the middle class, and high schools began to focus on preparing students for higher education. The GI Bill is a famous example of a public policy to support college education. During the 1950s and 1960s, attitudes shifted in support of secondary education programs that emphasized college readiness over job readiness.⁸ This emphasis on college remains the prevailing attitude in the United States, despite the fact that, on the one hand, many professions require additional education beyond a 4-year college degree, and that, on the other hand, an even larger number of jobs require technical skills but not a college degree.

Changes in the Economy, Lags in the Educational System

Although college was increasingly seen as a direct path to a secure middle-class lifestyle, during the 1950s and 1960s it was possible for a factory worker to support a family. Manufacturing dominated the U.S. economy. Jobs were plentiful, and semi-skilled labor was highly valued. By the 1970s, however, manufacturing jobs were disappearing, due in part to mechanization⁹ and in part to competition from the reinvigorated economies of Japan and Germany.

In the new economies of Japan and Germany the role of the worker was quite different from that in the United States. Even on an automated assembly line, manufacturers in those two countries used experienced workers to monitor and control quality on the line.¹⁰ Workers were empowered to stop the assembly line to adjust quality. Accordingly, labor and education policy in those countries invested in developing workers with critical thinking skills and refined technical skills. This autonomy did not exist in the American factory. Factory work in the United States remained semi-skilled.

The last decades of the 20th century marked another transition in the economy with parallel shifts in essential skills. The explosion of the computer and technology industry created many skilled jobs, although not necessarily jobs that require a 4-year college education, especially since higher education has not caught up to the rapid changes in technology. Today, the U.S. economy is characterized by innovation. Perhaps more than a college degree, work in the 21st century requires good skills in communication, collaboration, critical thinking, and creativity (the 4 C’s¹¹). These skills appear to be strong predictors of success in the technology industry and more generally in the knowledge economy.

Despite the new skills required to compete in the knowledge economy, the U.S. system of education and job training is still preparing a majority of youths for semi-skilled work that has not been available since the early 1970s. Adults in this country who are already on the job have few supports to retool their skills for the new economy. Like Japan and Germany, other developed countries have invested in their education and training systems to better provide youths with 21st-century skills when they enter the workforce. As noted before, Germany and Japan have long trained factory workers in problem solving and leadership skills so that they can monitor assembly lines and ensure the quality of the products manufactured. The misalignment of education and work in the United States, combined with lower labor costs in developing countries and better primary and secondary education systems in other developed countries,¹² has driven jobs out of the U.S. economy.

In addition, the financial crash of 2008 reduced demand worldwide, further limiting the need for semi-skilled manufacturing work. But the recession that began in 2008, like the Long Depression of the late 19th century, can serve as a catalyst to better align our systems of education and workforce development with the realities of life and work in the new knowledge economy. Education providers, driven initially by lean budgets, are collaborating with employers to strengthen their programs and connect students with authentic experiences relevant to opportunities in this economy. Employers are realizing that there is so much undeveloped talent, and support for innovative education, focused on the 4 C’s, will provide companies with employees who can adapt to the constant change in the global economy. Public and community agencies have focused reduced resources on combining and aligning investments by employers and education providers. As it did in the late 1890s, the United States is again recovering from an economic downturn to face a new era. Continued prosperity depends on seizing the opportunity to collaborate in the global knowledge economy.

Notes

1. Rosenbloom, J. (2002). Looking for Work, Searching for Workers: American Labor Markets During Industrialization. New York: Cambridge University Press.

2. Ibid.

3. Brissenden, P. & Frankel, E. (1920). Mobility of Labor in American Industry. Monthly Labor Review, 10 (June): 1342–1362.

4. Rosenbloom, Looking for Work.

5. Grubb, N. & Lazerson, M. (2004). The Education Gospel: The Economic Power of Schooling, Cambridge, MA: Harvard University Press, p. 109.

6. Ibid.

7. Walters, P. (1984) Occupational and Labor Market Effects on Secondary and Postsecondary Educational Expansion in the United States: 1922 to 1979. American Sociological Review, 49(5): 659–671.

8. Daggett, B. (2006). Jobs and the Skills Gap. Washington, DC: International Center for Leadership in Education.

9. Walters, Occupational and Labor Market Effects.

10. Helms, M. (2006). History of Continuous Improvement, in Encyclopedia of Management. Available at http://hamidfarid.com/wordpress/wp-content/uploads/2013/05/Encyclopedia-Of-Management-5th-edition_4.pdf#page=158.

11. More information available at www.p21.org.

12. U.S. Department of Education. (2006). Comparative Indicators of Education in the United States and Other G-8 Countries. Available at nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007006; Organization of Economic Cooperation and Development. Strong Performers and Successful Reformers in Education: Lessons from PISA for the United States. Available at http://dx.doi.org/10.1787/9789264096660-en.

* The commission outlined seven cardinal principles: health; command of fundamental processes (reading, writing, oral expression, and math); worthy home membership (art, music, social studies); vocation; civic education; worthy use of leisure; and ethical character. The full text of the report is available at http://tmh.floonet.net/articles/cardprin.html.

* Although these services are typically provided by community colleges, and although community colleges are considered the linchpin of the workforce development and adult education system, few community colleges participate in WIA programs. The mismatched goals and incentives and the bureaucratic nature of WIA programs are disincentives to participate.

CHAPTER 2

Better Skills, Better Jobs, Better Lives

Andreas Schleicher

Skills transform lives, generate prosperity, and promote social inclusion everywhere. And if there is one lesson the global economy has taught us over the last few years, it is that we cannot simply bail ourselves out of a crisis, that we cannot solely stimulate ourselves out of a crisis, and that we cannot just print money to get out of a crisis. A much stronger bet for countries to grow themselves over the long term is to equip more people with better skills to collaborate, to compete, and to connect in ways that drive our economies forward.

If there is one central message emerging from the Organization for Economic Cooperation and Development’s new Survey of Adult Skills, it is that what people know and what they do with what they know has a major impact on their life chances (Exhibit 2-1). For example, across countries, the median hourly wage of workers scoring at level 4 or 5 in literacy—who can make complex inferences and evaluate subtle truth claims or arguments in written texts, is more than 60% higher than for workers scoring at level 1 or below, that is, workers who can, at best, read relatively short texts to locate a single piece of information that is identical to the information given in the question or directive or who can understand basic vocabulary. Those with low literacy skills are also more than twice as likely to be unemployed. The survey also shows that this impact goes far beyond earnings and employment. In all 23 countries surveyed, individuals with poorer foundation skills are far more likely than those with advanced literacy skills to report poor health, to believe that they have little impact on political processes, and not to participate in associative or volunteer activities. The United States is a case in point: Almost a third of low-skilled adults in the United States report having poor or fair health, and the odds of having low levels of health are four times higher for low-skilled adults than for those with the highest skills. That ratio is higher than that for nearly any other surveyed country, and double the across-country average. At the aggregate level, too, the distribution of skills relates closely to how the benefits of economic growth are shared among individuals and social groups.

Exhibit 2-1.   Likelihood of positive social and economic outcomes among highly literate adults (2012).

Increased likelihood (odds ratio) of adults scoring at Level 4/5 in literacy on the OECD Survey of Adult Skills reporting high earnings, high levels of trust and political efficacy, good health, participating in volunteer activities and being employed, compared with adults scoring at or below Level 1 in literacy (adjusted)

Notes: Odds ratios are adjusted for age, gender, educational attainment and immigrant and language background. High wages are defined as workers’ hourly earnings that are above the country’s median.

Source: Based on data from the Survey of Adult Skills (PIAAC) 2012.

So in one way, skills have become the global currency of 21st-century economies. But this currency can depreciate as the requirements of labor markets evolve and individuals lose the skills they do not use. For skills to retain their value, they must be continually developed throughout life.

Furthermore, the toxic coexistence of unemployed graduates and of employers who say that they cannot find the people with the skills they need underlines that more education does not automatically translate into better economic and social outcomes. To succeed with converting education into better jobs and lives, we need to better understand what those skills are that drive outcomes, ensure that the right skill mix is being learned, and help economies to make good use of those skills.

The essential starting point is anticipating and responding to the evolution of skill demands. Government and business need to work together to gather evidence about skill demands, present and future, which can then be used to develop up-to-date instructional systems and to improve education and training systems. During the past few decades there have been major shifts in the economic underpinnings of industrialized countries and, more recently, of many emerging and developing countries, too. In countries such as the United States, the steepest decline in skill demands is no longer in the area of manual skills, but rather in routine cognitive skills. When we can access the world’s knowledge on the Internet, when routine skills are being digitized or outsourced, and when jobs are changing rapidly, accumulating knowledge matters less, and success becomes increasingly about ways of thinking (creativity, critical thinking, problem solving, and judgment), about ways of working (collaboration and teamwork), and about the sociocultural tools that enable us to interact with the world.

The OECD’s Programme for International Student Assessment (PISA) is an attempt to measure schooling outcomes in these terms. It looks at the capacity of 15-year-old students not just to reproduce what they have learned, but to extrapolate from what they know and apply their knowledge in novel situations. The results show that a comparatively large proportion of 15-year-olds in the United States do not acquire even a minimum level of skills in key domains such as mathematics, reading, and science.

Early deficiencies in initial education and training will not go away by themselves. Indeed, the OECD Survey of Adult Skills shows that the performance of the initial schooling system is closely linked to adult skills. Between 2000 and 2009, 15-year-old students in the United States tended to score below the across-country average in the PISA assessment of both literacy and numeracy. Consistent with this findingyoung adults (now in their late teens or twenties) scored below average in the Survey of Adult Skills. Weak basic skills (literacy and numeracy) are now more common in the United States than in many other countries. One in six U.S. adults (about 36 million) have weak literacy skills; in Japan, the comparable figure is one in 20 (Exhibit 2-2). Nearly one third of U.S. adults have weak numeracy skills as compared with an across-country average of 19%. Looking at stronger performers, while one in nine U.S. adults score at the highest level in literacy, similar to the across-country average, only one in 12 score at the highest numeracy level, well below the average. Even in problem-solving skills in technology-rich environments, which are central to the success of the U.S. economy, adults in the United States do not outperform the across-country