Lawrence Mishel

Accurately Assessing High School Graduation Rates.

Recent studies have argued that there is a dropout crisis in the U.S. But Mr. Mishel and Mr. Roy find that this contention is based on flawed analyses of inadequate data. Using a much wider range of sources, they conclude that the situation is not nearly so dire as is commonly believed. ********** CONVENTIONAL wisdom asserts that there is a newly discovered dropout crisis in our high schools. As the National Governors Association states, We know that about a third of our students are not graduating from high school.... About three-fourths of white students graduate from high school, but only half of African American and Hispanic students do. (1) Jay Greene of the Manhattan Institute and Christopher Swanson, formerly with the Urban Institute, are primarily responsible for this claim. They have published reports showing these extraordinarily high dropout rates nationwide, for the states, and for many specific school districts. They also claim that graduation rates have been flat for several decades. (2) Greenes and Swansons advocacy organizations, such as the Alliance for Excellent Education, the Education Trust, and the Harvard Civil Rights Project. (3) We have come to different conclusions. Both Greene and Swanson calculate dropout rates from enrollment and diploma data reported by school districts, collected by the states and forwarded to the federal governments Common Core of Data, which is managed by the National Center for Education Statistics. Using different data sources, including the U.S. Census and several high-quality longitudinal surveys, we have found that graduation rates have improved for decades, particularly for minorities, though less so in recent years. Instead of half of black students graduating with diplomas, as Greene and Swanson maintain, we conclude that three-fourths of black students obtain regular diplomas and, of the 25% who do not graduate, fully half go on to obtain a GED that allows them to enroll in college, enlist in the military, or take advantage of other postsecondary training opportunities. It is a similar story for Hispanics. Rather than indicating stagnant graduation rates, census data show that the high school completion rate for young black adults (aged 25 to 29) was 42% in 1962 and roughly doubled by 2000. (4) There remains a substantial racial gap in high school completion--about 10 percentage points--but it is a far smaller gap than existed 20, 30, or 40 years ago. Trends in Hispanic graduation rates are more difficult to measure over a long period, but it is clear that graduation rates have been steadily improving over the last 20 years: the percentage of Hispanics (aged 20 to 22) who have a high school diploma (excluding GEDs) increased from 62% in 1984 to 76% in 2002. (5) In short, Greenes and Swansons estimates are more pessimistic than ours. Ordinarily, only experts would have to make technical judgments about the relative quality of data sources and methods of analysis. But in this case, important policy implications flow from whether you believe, for example, that the black dropout rate is 50% and stagnant or 25% and falling. Neither rate is acceptable, but education policy makers would approach the problem very differently depending on which story was true. REALITY CHECK When natural or social scientists examine the reliability of data, one of their first challenges is to see whether results are consistent with other facts that they know. If data are implausible, we should be cautious about accepting them until we have carefully checked how they were derived. If, for example, we were suddenly presented with data showing a big drop in manufacturing imports and a jump in exports, we would immediately be skeptical if these data were inconsistent with unemployment figures showing large layoffs of manufacturing workers. Of course, we would still have to investigate why the import/export data were flawed, but until we did so we would be hesitant to accept them. …

America's low.wage path

The economic performance of the United States is sometimes viewed as very successful, especially in comparison to Europe. After all, unemployment has been lower than in Europe and job creation has been higher. The relative superiority of job creation in the United States is frequently exaggerated, however, by comparisons of the absolute numbers of jobs created - a flawed measure because the size of the labor force has been relatively stagnant in Europe while growing in the United States. Moreover, it is infrequently recognised that U.S. job creation in the 1980s was actually inferior to that of the 1970s. Nevertheless, the bigger fault with the claim of U.S. economic superiority (and the implied superiority of flexible, deregulated labor markets and laissez-faire policies) is that it ignores the deterioration in the standard of living of most Americans over the last 15 years. This paper reviews recent income and wage trends in the United States and finds that widespread income problems have been a continuing feature of the U.S.economy in the early 1990s (continuing through the first half of 1995, the latest data) and will likely continue into the foreseeable future.

Improper Diagnosis, Reckless Treatment.

IN THE June Kappan, Marc Tucker summarized the Tough Choices report. We (and others) critiqued it, and he responded. We charged Tucker with trying to stampede policy makers into adopting reckless school reform recommendations by asserting, without evidence, that an emerging international economy made our K-12 schools obsolete and by claiming that adoption of the reports proposals could prevent middle-class living standards from falling. International digital competition is real, but increasing the supply of college graduates will not make wages rise for a group whose earnings are already stagnant. Tough Choices insists that our future competitiveness requires 95% of all students to be college-ready at a new, higher academic standard, but it provides no justification for contradicting the Bureau of Labor Statistics (BLS) projection that fewer than one-third of future jobs will require college degrees at todays lower standard. The BLS also expects not more than another quarter or so of new jobs to require some college training. (1) Tough Choices is the sequel to a report issued in 1990 by a predecessor group, which attributed the nations low productivity growth in the 1970s and 1980s to inadequate American schools. But in the June Kappan we showed that this analysis proved to be spectacularly wrong. Since the mid-1990s, the productivity of American workers (educated in the 1970s and 1980s) has accelerated at historically unprecedented levels and indeed has been rising faster than in any other industrialized nation. This productivity renaissance relied upon the very work force whose skills were criticized in the earlier report. If American middle-class living standards are threatened, we argued, it cannot be because workers lack competitive skills. Rather, the richest Americans have commandeered the fruits of this productivity growth and denied fair shares to the workers, educated in American schools, who have created increased national wealth. (2) The middle class, in short, is threatened not by lack of skills but by poor pay for skilled jobs. Social and economic policy reform, not school transformation, must be the remedy for this middle-class squeeze. As we said in June, we are not satisfied with our schools. We are concerned about the academic, cultural, civic, and moral preparedness of todays young people; we consider it urgent to reduce gaps in outcomes that fall along lines of race, ethnicity, and income. But school inadequacies are not generating economic crisis, and so school reforms motivated by false expectations of economic collapse are bound to be misguided. In any field, proper diagnosis is a precondition for effective treatment. In his June response, Tucker belittled our analysis, claiming that Mishel only wanted to deflect attention to economic policies advocated by his institute and that Rothstein only represented the views of educators who resented being blamed for national economic failures. We will not use our space here to respond in kind to this attack on our motives but urge him to stick to the issues in his rejoinder to this article. Tucker also denied our charge that his report sees skill development as virtually the only policy lever for shaping the economy. But here is how he himself summarized the report: The fact is that education holds the key to personal and national economic well-being, more now than at any time in our history (emphasis added). (3) We judge our summary of this theme to be fair. Tucker next claimed that the past decades productivity surge does not reflect the skills of workers graduating from contemporary American schools; rather, he attributes it to returning World War II veterans educated by the GI Bill and to education advances during the 1950s and 1960s. There is a 50-year lag, he asserted, between educational improvement and productivity growth. While technological change certainly accumulates over many years, returning World War II veterans were in their prime working years back in the 1950s and 1960s. …

Living standards trends in the new economy era: what can we learn?

This article reviews wage trends in the USA during the 1990s. Positive findings include rising living standards and a narrowing of the pronounced income inequality, particularly at the bottom. Explanations discussed include sustained low unemployment, ‘new economy effects, government policy (e.g. minimum-wage increases), and the limited role of the stock market boom. Problems are identified, such as the increased (paid) work effort required. The article closes with an evaluation of the likely consequences of the recent downturn. Cet article examine les tendances salariales aux Etats-Unis dans les années 90. Certains résultats positifs incluent une augmentation du niveau de vie et une diminution dune forte inégalité salariale, particulièrement concernant les très bas salaires. Les explications avancées dans larticle incluent le maintien dun taux de chômage peu élevé, «les effets de la nouvelle économie» et la politique gouvernementale (à savoir, les augmentations du salaire minimum), et le rôle limité de lexplosion du marché boursier. Des problèmes sont identifiés, tels que le rythme accéléré au travail (rémunéré) qui est requis. Larticle se termine par une évaluation des conséquences probables du récente ralentissement économique. In diesem Artikel werden die Entgeltentwicklungen der 90er Jahre in den Vereinigten Staaten untersucht. Als positiv wird verbucht, daß der Lebensstandard gestiegen ist und die Kluft der besonders auffälligen Einkommensungleichgewichte vor allem bei den niedrigsten Einkommen kleiner geworden ist. Die Gründe hierfür werden ebenfalls erörtert, beispielsweise die anhaltend geringe Arbeitslosigkeit, die Auswirkungen der ‘new economy, die Regierungspolitik (z. B. Mindestlohnerhöhungen), und die beschränkte Rolle des Aktienmarktbooms. Daneben werden Probleme aufgezeigt. Hierzu gehört die Notwendigkeit von einem erhöhten Einsatz in der entlohnten Arbeit. Den Abschluss des Artikels bildet eine Einschätzung der denkbaren Konsequenzen der jüngsten Konjunkturabschwächung.