Monday, February 1, 2010

Rewire Education To Connect U.S.

The Great Recession continues in the United States, not only because of financial impropriety in the mortgage industry and ethical breakdowns in business and social practices but, unfortunately, for a more fundamental reason: our disconnected educational system.

It used to be that the U.S. system was based on the three “Rs” – Reading, Writing and Arithmetic. For about the last decade, however, there has been a negative correlation between educational achievement, hard work, and prosperity.

The model used to be that the higher your “grade level,” the higher the likelihood of financial independence. Those with doctorates were considered experts in their fields and could almost punch their employment ticket. Now, they’re lucky if they can find a job.


We became a sub-prime nation which thought it could borrow its way to prosperity. We became a nation which promised the American dream with nothing down and nothing to pay for years. Credit was so easy to get -- the bank around the corner would borrow the money from China and then lend it to the consumer with minimal, if any, credit checking.

On the other hand, previous generations earned the American dream by applying hard work and education to buy a home or start a business. During the past decade, however, the model shifted increasingly to one relying on financial leveraging by borrowing more money and risking larger business deals.

For example, consumers flipped houses, invested in hedge funds, or purchased volatile stocks. We also witnessed this risky behavior with investment banks and mortgage companies by “bundling” and passing questionable sub-prime mortgages to unsuspecting buyers.

Michelle Rhee, chancellor of the District of Columbia public schools, says "our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges."

Rhee further argues the loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home.

The American worker over the past decade has maintained his or her standard of living by borrowing and over-consuming relative to real income. When the Great Recession wiped out credit and burst asset bubbles, it left many Americans more financially strapped and also without a job. Many found themselves lacking the skills to compete in a global market.

Over the last three decades, we have witnessed the fall of communism, the emergence of new global economies and the creation of hundreds of millions of new and competent global workers.

But many American employers must now hire employees offshore in order to maintain the level of sophistication necessary to compete worldwide. This phenomenon has eroded the earning power of many American jobs since foreign workers are willing to work for substantially less in providing at least equal services and skill sets.

This diminished competitiveness only gets solved when Americans realize where they stand in a global economy. It’s not that we don’t have some of the best institutions of higher learning in this country.

The problem is that we must reverse the work ethic of our children and the current model of public and even private education. Obviously, higher education is affected by this dynamic as well.

More students are coming from abroad. Increasingly, students from countries such as China, Japan, and India are more competitive because their system and culture fosters learning and nurturing from an early age. Parents feel it is their moral duty and obligation to prioritize education. They take responsibility for their children.

It is increasingly difficult to even find grade schools in this country that can teach children to be competitive in a global market. There is no easy solution to this problem but, as a country, we cannot ignore the situation. Sure, many municipalities are running deficit budgets and scrambling to provide a competitive infrastructure.

But if we don’t reverse this systemic problem, our country will only lag behind in a world market. We owe it to our children to provide the tools necessary to compete in this increasingly international market and return to basics, like the three Rs. We know these kinds of values work, and it’s time we change our priorities before it’s too late.

Note: This post comes to We Mean Business from TechMan, who writes on a variety of topics including technology, education and pharmaceuticals.

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