About Education and the Economy
The rapid growth of China, India, Brazil and other emerging powers has dramatically altered the complexion of the global economy in recent years. At the same time, rising deficits, high trade imbalances, a declining dollar, and a lingering economic downturn have placed America's position within the global economy in peril—and have policymakers deliberating over the keys to America's economic future. One area often cited as critical to the nation's future economic strength is higher education, particularly that America must dramatically increase the number of college-educated citizens to remain a leading economic power.
Today, just under 40% of Americans 25 to 34 years of age hold a two- or four-year degree. While this number has remained stable for decades, other developed countries have seen a steady increase in their number of college graduates in recent years. America is somewhere in the middle of this group, on par with countries like Australia and Spain. Meanwhile, countries such as South Korea (53%), Japan (54%), and Canada (55%) have pulled considerably ahead of the pack.
Proponents of the resolution argue that since the U.S. can no longer compete with the world on the price of labor, and has even seen a growing number of white collar jobs outsourced, it needs to focus more on sectors where innovation and critical thinking are required. These skills are best acquired in college or graduate school. In this context, the figures cited above are troubling, and illustrate the urgent need to increase the number of college graduates. Falling behind on higher education would cede one of the few remaining advantages of the American workforce in the global economy.
Supporters of the resolution also point to the economic benefits of higher education for individuals. Education has long been a reliable indicator of social mobility and financial attainment. Of particular concern is the growing degree to which minorities and low-income Americans have fallen behind in college attainment. American society will continue its trend toward greater stratification unless college becomes a national priority. With minorities making up the fastest-growing segment of the U.S. population, the long-term impact on the strength of the American workforce could be severe.
Those arguing against the resolution concede that college graduates earn higher wages in the long run, but this does not settle the debate. As the market becomes more saturated with college degrees and the price of higher education continues to rise, the costs may outweigh the benefits for many Americans. In the 2007-08 academic year, the average annual cost (tuition plus room and board) of a four-year degree-granting institution was $19,362; the cost of private institutions was a staggering $30,393. With Americans' personal savings rate at its lowest since the Great Depression, is it sound public policy to urge Americans in this direction?
There is also the fundamental issue of whether the U.S. should forfeit more and more of its manufacturing sectors in favor of an increasingly service-based economy. There are products American manufacturers make well and at a competitive price. To compete with the rest of the world, America must make things. While college is important, policymakers should continue to encourage a well-rounded workforce as a long-term economic strategy.