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Memo to the President: Higher Education Is US

January 14, 2009

What should the top priority of the incoming Obama administration be?

Jamie-Merisotis If you're like most people, you're probably thinking "the economy." Makes sense. Things are bad -- and they're likely to get worse before they get better. But as Jamie Merisotis, president of the Lumina Foundation for Education, argues in a "memo" to the president-elect on the Lumina Web site, the issue isn't just short-term economic recovery; it's about long-term economic transformation. And higher education attainment has to be a key driver of that transformation.

The key to progress, writes Merisotis,

...lies in the development of the knowledge economy, which in turn requires the American workforce to develop the skills that are required in a globally-competitive environment. Higher education attainment is increasingly important to the U.S. economy as the workforce demands education and training leading to higher levels of skills and knowledge. The implications of this shift can scarcely be overstated. For generations, the American economy has created large numbers of middle class jobs that did not require high levels of skills or knowledge. As a consequence of global competition, these jobs are rapidly disappearing. It is not that low-skill jobs do not exist in the United States -- it is that the Americans who hold them are not likely to enter or remain in the middle class. This means they are not likely to have access to quality health care, save for retirement, or assure their children access to higher education. The consequences of failing to reach the middle class are increasingly severe. What has changed is that access to middle class jobs is now mostly dependent on completing some form of postsecondary education.

Higher education attainment rates are rising in almost every industrialized or post-industrial country in the world, except for the United States. Lumina Foundation estimates that at current college graduate production rates there will be a shortage of 16 million college-educated adults in the U.S. workforce by 2025. Today, roughly 39 percent of American adults hold a two- or four-year degree. That attainment rate, which has held steady for four decades, led all other nations for much of the post-war period. Unfortunately, this is no longer the case. Based on data published by the Organization for Economic Development and Cooperation (OECD), our nation now ranks only 10th in the percentage of young adults (25 to 34 years of age) with college degrees. Today in some countries more than half of young adults are degree holders. Even more disturbing for the United States is that attainment rates in these other countries continue to climb while ours remains stagnant....

The clearest evidence that rising attainment rates in the rest of the world reflect real economic demands is that the gap in earnings based on level of education continues to widen. In 29 of the 30 OECD member countries, the gap in earnings between people who have completed some form of postsecondary education and those who have not is widening despite the fact that the proportion of postsecondary graduates in the workforce is increasing. If the economy were not demanding higher levels of skills and knowledge, the gap in earnings would be expected to narrow as the supply of graduates increased -- a case of simple supply and demand. This trend is evident in the United States as well. Since 1975, the average earnings of high school dropouts and high school graduates fell in real terms (by 15 percent and 1 percent, respectively), while those of college graduates rose by 19 percent. In other words, the economic benefits -- both for individuals and the society -- of completing higher education are growing.

Dangerous stagnation is evident in another area as well: Rates of college attainment among our nation's underserved students -- first-generation students, low-income students and students of color -- are significantly lower than those of other students. These achievement gaps have endured for decades, and they're now widening -- an ominous sign when one considers current demographic and economic trends. More than 30 percent of white, non-Hispanic American adults have at least four years of college, but only 18 percent of African Americans and 12 percent of Hispanics have reached the same level of attainment. Because the average income of Americans with a four-year degree is $43,000 per year, compared to $27,000 for those with just a high school diploma, this chronic gap in educational attainment contributes to the disparities in income between racial and ethnic groups in the United States. This issue is of growing importance as the proportion of the population from groups traditionally underrepresented in higher education grows rapidly. Of the total U.S. population growth of 56 million between 2000 and 2020, 46 million will be members of minority groups. The United States is projected to become a "majority minority" country by 2050.

At Lumina Foundation, we have embraced a single, specific goal that will help us address this issue. Our Big Goal is this: to increase the percentage of Americans with high quality degrees and credentials from 39 percent to 60 percent by the year 2025. How do we as a nation achieve this goal?

Click here to read the rest of Merisotis' thought-provoking memo.

-- Mitch Nauffts

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Posted by Scott Rooks  |   January 14, 2009 at 09:10 PM

Sounds like Jamie Merisotis is sounding the calvary charge for the USA.

We need to overall our education system but this is also a states issue as well since property taxes still provide a lot of money for our school systems wether they be post secondary or otherwise.

Also with huge deficits in our federal spending we are doomed to passing legislation like "No child left behind" only to find out that the funding is what got left behind.

I thinks its interesting that we continue to fall behind in education world wide but I think the charge here is a grassroots effort that should be led by local governments and neighborhoods concerned about education.

I'm am glad that the Lumina Foundation is speaking to be heard because that is what will wake up the nation when we all hear the work that needs to be done to stay ahead of other nations.

Posted by DJ  |   January 15, 2009 at 09:43 AM

Maybe Obama can take some of the money from the most expensive inaguration ever and plow it into our education system instead?


Snark aside, we desperately do need school reform, but don't expect to see that happen anytime soon.

Frankly, we spend plenty on schools. Throwing more and more into it like a bottomless pit isn't any real answer anymore.

Posted by Mitch Nauffts  |   January 15, 2009 at 11:38 AM

> Throwing more and more into it like a bottomless pit isn't any real answer anymore.

DJ, you probably feel the same way about the $2 trillion -- and counting -- poured into the bottomless pit created by the geniuses on Wall Street. Snark intended.

Posted by Mitch Nauffts  |   January 15, 2009 at 11:47 AM

Hi Scott --

Education is such a difficult problem precisely because it's both a local (funding, innovation) and national (standards, leadership) issue. Yes, we need leadership at the grassroots, but IMO the federal government also has to be involved -- in a big way. College affordability is one area where the feds can make a real difference. Let's start with an expansion of the Pell Grants program; hell, what about a new G.I. bill? You want an "infrastructure" project that will pay dividends for years to come? How about educating the workforce of the 21st century?

Posted by DJ  |   January 15, 2009 at 12:07 PM

"DJ, you probably feel the same way about the $2 trillion -- and counting -- poured into the bottomless pit created by the geniuses on Wall Street. Snark intended"

......You're comparing the way we've handled our education system to your favorite whipping boys? That's kind of unfair, at least the geniuses on Wall Street turn profits every now and then :)

But I do hope Obama enjoys his lavish party. What was that bit about shared sacrifice again?

In all seriousness, the problems with schools have so many angles to attack from. You can make college as affordable as you want, but the students coming into those colleges need to be able to handle it. That's not really the case in many instances

Posted by Mitch Nauffts  |   January 15, 2009 at 12:25 PM

My favorite "whipping boys"? But they're such an easy target... :-D

Posted by jthomason@gmail.com  |   February 04, 2009 at 02:12 PM

In the long-term your key to progress might be efficient but in my opinion we might be able to recover from the economy crisis much faster. As stated by Med Yones, the US Economy Seer, who foresaw the current economic crisis in Jan 2007 we will be able to achieve an improvement of our economic situation in 2010. “The general economic decline cycle will bottom in 2009 and we could see stability sometime late 2009 or early 2010, then we will be back to modest recovery in late 2010 or early 2011. However, the real estate, construction and financial Industries will bottom in 2010, the recovery could start in 2011“ For additional information please visit



Posted by JC  |   May 26, 2009 at 12:39 PM

While presenting a case such as this to the president is very important, it is even more important for this nations people to truly understand why were are in the current situation. Long term education goals are a good-thing, but without a delivery method (institutions free from government influence), we are poised to repeat the failures seen over the past last 100 years.

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