Our guest blogger today is Shari Prest, President of ARK Associates. Shari's InvestMN articles are for reference and sharing by educational leaders in Minnesota. We encourage our members to use the following as a tool...
Key Message: Unless you invested in the first microwave ovens or were on board with the initiation of Microsoft or Apple, you are unlikely to reap a more significant return on your investment than you will through your investment in public education.
The value of education means different things to different people. To some, value may be how much they or their children earn. Others may see the value of education as the scope of future job opportunities or employers available for the future or the prosperity of the communities and state in which they live. For you, value could mean something different, such as lifetime contributions or the social benefits you gain as an educated person.
The economic benefits of Minnesota’s world-class schools are boundless. The data show that the greatest challenges facing our country – from school dropout rates, to crime, to rising health-care costs, to the necessity of competing in the global marketplace – can only be met by focusing on child development, beginning at birth.1
The report Early Childhood Development with a High Public Return, compares early education investments to other kinds of state investments, with the conclusion that early education investments yield a return that far exceeds the return on most public projects that are considered economic development.
"Public schools are not a drag on the system but a major contributor to the health of our communities." - Barbara Heckman
Economic benefits of high quality public schools, from early childhood through post secondary, for both individuals and society, are enormous: higher employment and lower costs. The process itself provides jobs for employees who in turn spend wages and pay taxes. School systems purchase goods and services. On a longer-term basis, society experiences lower costs for remedial, special education, and grade repetition when schools are wisely led and broadly supported. People who complete high school are more likely to earn more, contribute more in taxes, experience a higher quality of life and require fewer social and criminal justice services.
Nationally, the average high school dropout can expect to earn an annual income of $20,241, according to the U.S. Census Bureau (PDF). That's a full $10,386 less than the typical high school graduate, and $36,424 less than someone with a bachelor's degree. Participation in public education raises wages and lowers unemployment.
The Business, Economic and Community Outreach Network at Salisbury University conducted a study examining the risks and rewards of education in the State of Maryland. Many of those measures are likely replicable in Minnesota and other states as well. Some of the findings follow.
- Cutting statewide public K–12 expenditure by $1 per $1,000 of the state’s personal income would reduce the state’s personal income by about 0.3 percent in the short run and 3.2 percent in the long run and reduce the state’s manufacturing investment in the long run by 0.9 percent and manufacturing employment by 0.4 percent.
- Cutting statewide public K–12 expenditure by 1% of the state’s personal income would reduce the state’s employment by 0.7 percent in the short run and by 1.4 percent in the long run.
- Cutting statewide public K–12 education by $1 per student would reduce the number of small businesses by 0.4 percent in the long run.
The "achievement gap" is not a metaphor. It is a social outcome that we can see and measure. Research shows that the achievement gap appears long before children reach kindergarten – in fact it can become evident as early as age nine months. So let’s examine the impacts of education from early childhood and work our way up.
At-risk children who don't receive a high-quality early childhood education are:1
- 25% more likely to drop out of school
- 40% more likely to become a teen parent
- 50% more likely to be placed in special education
- 60% more likely to never attend college
- 70% more likely to be arrested for a violent crime
Failure is expensive.
If the high school students who dropped out of the Class of 2011 had graduated, the nation’s economy would likely have benefitted from nearly $154 billion in additional income over the course of their lifetimes, according to the Alliance for Excellent Education’s issue brief, The High Cost of High School Dropouts.
Everyone benefits from increased graduation rates. The graduates themselves, on average, will earn higher wages and enjoy more comfortable and secure lifestyles. At the same time, the nation benefits from their increased purchasing power, collects higher tax receipts, and sees higher levels of worker productivity.
- Estimates indicate that approximately 30 percent of federal inmates, 40 percent of state prison inmates, and 50 percent of persons on death row are high school non-completers. Moreover, non-completers are 3.5 times more likely than high school completers to be imprisoned at some point during their lifetime.
- Raising the high school completion rate one percent for all men ages 20- through 60- would save the US $1.4 billion annually in crime related costs.
- Each class of high school dropouts costs the U.S. economy more than $8 billion in incarceration expenses and lost wages per year.
- If the male graduation rate was increased by only five percent, the U.S. could save $7.7 billion a year through reducing crime related costs and increasing earnings.
"[Minnesotans] should not spurn the increase in public costs necessary to give all children the opportunity to achieve their full potential." - Jeff Van Wychen, former fellow for Minnesota 2020
Onward and Upward.
The benefits of greater investment in our children and our schools are clear, but challenges remain. Schools are expected to do more with less. Although a popular maxim, this is not always possible.
- "[The] pressure is growing for our goals to be aligned with individual students' strengths and the fast-evolving needs of society." - Gary Marx, President, Center for Public Outreach and author of Twenty-one Trends for the 21st Century. Greater personalization is an expectation throughout society and one that educators will achieve with adequate support. As our society and its needs grow more diverse, this challenge grows.
- As a portion of personal income, our commitment to public education has not grown at the rate some would have us believe. Real per-capita state general fund is 9 percent less than it was twelve years ago.
- "Advancements in science and technology mean students have a lot more to learn today... leading to an expansion in school curricula and a corresponding increase in public costs." - Jeff Van Wychen, former fellow for Minnesota 2020.
- School leaders, in partnership with teachers, parents and legislators, weigh strategies and ultimately determine the best ways to invest the dollars available to achieve the best social, emotional, physical, and academic outcomes for students.
"One thing we can all agree on, 'Our children deserve to receive the best education our country can provide for them." - United States Senate paper
The sources for these materials include the following: The Business, Economic and Community Outreach Network at Salisbury University, Maryland study; ounceofprevention.org; The High Cost of School Dropouts, Education Alliance for Eduction Excellence, Issue Brief 2011; Art Rolnick and Rob Grunewald, Early Childhood Development: Economic Development with a High Public Return, March 2003; James J. Heckman and Dimitriy V. Masterov, The Productivity Argument for Investing in Young Children, October 2004; Jeff Van Wychen, The High/Scope Perry Preschool Study Through Age 40, November 2004; National Center for Educational Statistics; Gary Marx, Education Week Press, 2014; By the Numbers: Dropping Out of High School, www.pbs.org