As students of color and diverse ethnicities rapidly become the leading population of public school systems in numerous states, closing educational achievement gaps and providing a quality education to all students can secure the United State’s future economic prosperity, according to a new report from the Alliance for Excellent Education. Noting that two-thirds of the U.S. economy is driven by consumer spending, the report, Inseparable Imperatives: Equity in Education and the Future of the American Economy, argues that raising individuals’ education levels will boost their purchasing power and increase the national economy.
“Historically, the country’s moral failure to provide all children with an adequate and equal education did not incur a noticeable economic cost,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “This is no longer the case. Today, the moral imperative to equitably provide all students with a quality education is now a critical factor in maintaining the United States’s national economic strength.
“Thanksgiving weekend is the year’s busiest shopping period,” Wise continued. “Ask any retailer whether their future depends on consumers earning a high school dropout’s $9 per hour or the $20 per hour of postsecondary achievement.”
As shown in the map above—taken from the report—students of color make up more than half of the K–12 population in twelve states (dark green) and comprise between 40 and 50 percent of the student population in an additional ten states (light green).
At the same time, however, the high school graduation rates of students of color trail those of their white peers by an average of more than 20 percentage points.
Educational disparities continue into higher education where, in 2011, 31 percent of whites age twenty-five and older held at least a bachelor’s degree compared to just 20 percent and 14 percent of blacks and Hispanics, respectively.
According to the report, individuals lacking a quality education will struggle to compete in today’s knowledge-driven economy where 60 percent of jobs require some education after high school. Based on the latest data from the U.S. Bureau of Labor Statistics , high school dropouts are more than three times as likely to be unemployed than are college graduates. Even when employed and at the peak of their earnings career, high school dropouts average about $9 per hour compared to high school graduates and those with bachelor’s degrees, who earn $13 and $25 per hour, respectively, according to an economic model developed by the Alliance for Excellent Education with the support of State Farm®.
As the report notes, individuals earning $9 per hour will face difficulty supporting themselves, much less a family. Making rent and car payments would be even more challenging. And a down payment and a monthly home mortgage payment—the bedrock of family and community stability—would be completely out of reach.
“Two-thirds of the U.S. economy is driven by consumer spending,” said Wise. “A dropout’s subsistence level is a tough situation for any individual and a disaster for any economy based on growing numbers of consumers living this reality,” said Wise. “To be prosperous in this century, the United States must have more than a $9-per-hour economy. As students of color fast become the largest group of consumers, their ability to be major drivers of individual and national economic growth depends upon the quality of their education.”
For example, if every state had reached America’s Promise Alliance’s goal of graduating 90 percent of its students, many of whom are students of color, for just the Class of 2011, America would have more than 750,000 additional high school graduates. These “new graduates”—many of whom would have likely pursued postsecondary education—would earn more during their lifetimes, and in turn, they would spend more with a high school diploma than without, thus driving America’s economic productivity and growth.
Specifically, the additional graduates from just one high school class would likely earn an additional $9 billion each year compared to their earnings without a high school diploma, the report notes. With this additional income, these students would spend more money in their communities. This increased economic activity would create a ripple effect, supporting the creation of as many as 47,000 additional new jobs and $2 billion of increased tax revenue by the time these new graduates reach the midpoint of their careers.
Wise also noted that previous economic research by the Alliance demonstrates that raising the graduation rates for the growing numbers of African American, Latino, Asian American, and Native American students would produce an increasingly significant boost for the economy. “Achieving a 90 percent graduation rate for students of color or ethnicity for just the Class of 2011,” Wise stated, “means an annual gain of as much as $6.4 billion in increased earnings, additional spending creating as many as 34,000 new jobs, and as much as $1.5 billion in increased tax revenues.
“As federal and state policymakers wrestle these next months with how to improve a slow economy,” Wise continued, “this report conclusively demonstrates that in this information age, achieving a successful economy is now directly linked to achieving educational equity.”
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