As a healthcare administrator during the 1980s, I had the rewarding experience of serving as a private sector representative to Lamar Alexander during his service as Tennessee's governor. Then, as now, the economy was stagnant and the Governor wanted to do something about it.
As business representatives, our purpose was to provide strategies for improving the state's system of K-12 and higher education in order to expand the state's economy, improve the standard of living, and to do so with no new or additional taxes. With education as the primary driver, the state broke out of the economic doldrums and has been putting on speed ever since, helping lead population growth and diverse economic development in the "new South". Recent examples include a large Google operation and Volkswagen's multi-billion dollar plant in Chattanooga, which I visited a few months ago.
Following his success as Governor, the erudite and affable Alexander went on to head Vanderbilt University, serve as Secretary of Education and is currently a sitting United States Senator.
Despite past successes, though, Tennessee and the rest of the country must put on even more speed if we are to survive in an increasingly educated and competitive world. Estimates indicate a need to increase the percentage of Americans with high-quality, two-year or four-year college degrees and credentials from 39 percent to 60 percent by 2025, an increase of 23 million graduates above current rates.
America's most educated population is reaching retirement age and we are facing a shortage of college-educated workers by 2020. The best estimates show that we need 800,000 more college graduates each year from now through 2025 to replace retiring "boomers" and compete with top-performing nations.
Because the average income of Americans with a four-year degree is $43,000 per year, compared to $27,000 for those who possess a high school diploma, the chronic gap in educational attainment contributes to the disparities in income between racial and ethnic groups, as well. This issue is of growing importance as the proportion of the population from groups traditionally underrepresented in higher education grows rapidly. The United States is projected to become a majority minority country by 2050. Of the projected population growth of 56 million between 2000 and 2020, 46 million will be members of minority groups.
We are also falling behind in international rankings of college attainment. The proportion of the U.S. population with a two-year or four-year college degree has remained constant over the past 40 years at just under 39 percent.
Several decades ago, this level of higher education attainment led the world, and the United States still ranks first in the proportion of college-educated adults between the ages of 55 and 64. Unfortunately, this level of degree attainment is no longer sufficient to meet the levels of other developed countries in Europe and Asia with whom we now compete in an increasingly flat world.
Other nations are reaching higher education attainment rates as high as 54 percent among their young adult population (ages 25-34), compared to a rate of just 39 percent here. Today the United States ranks only 10th in the percentage of the young adult population with college degrees. According to the Organization for Economic Cooperation and Development (OECD), rates of college degree attainment are increasing in almost every OECD country faster than in the United States. As a result, the gap will continue to widen unless the United States significantly improves rates of both college participation and completion. Reaching world-competitive levels of college attainment will require the United States to rapidly find ways to assure that dramatically more residents have improved access and greater opportunity to succeed in higher education.
Higher education attainment is increasingly important to the economy, as the workforce demands higher levels of skills and knowledge. The clearest evidence for this growing shortage is that the gap in earnings based on level of education continues to widen.
Since 1975, the average earnings of high school dropouts and high school graduates fell in real terms, while those of college graduates rose by 19 percent. Of even greater significance, there is clear evidence that the increasing value of higher education in the workforce reflects the skills and competencies developed by graduates while in college.
For many generations of Americans, a high school diploma represented the route to a good job that paid living wages, but times have changed. According to the Georgetown University Center on Education and the Workforce, the percentage of the U.S. workforce requiring some level of postsecondary education rose from 28 percent in 1973 to 59 percent in 2007 and is expected to increase to 63 percent by 2018.
In fact, today's employers attribute 75% of productivity gains to the "knowledge factor".
If we are to ever pay off our staggering debt and regain control of our national destiny, it is imperative that we replenish our rapidly shrinking reserves of intellectual capacity now and increase it in the coming generations.
Isn't it about time to "wise up"?