The Perils of Investing Only in the 'Winners'

The U.S. is lagging behind other countries in its efforts to maximize the potential of all of its people.

US President Barack Obama tours a class at Bladensburg High School April 7, 2014 in Bladensburg, Maryland. Obama visited to school to announce 24 recipients of $107 million in Youth CareerConnect grants, including $7 million for Bladensburg, intended to help better prepare students for higher education.  (AFP/Getty Images)

The money involved was relatively small. But when President Obama on Monday announced a new grant program to encourage communities to develop hybrid high schools that blend a secondary education with career training and college credit, he correctly identified a challenge that is growing steadily more urgent: widening the circle of young Americans with the skills to reach the middle class.

On balance, the evidence doesn't support the often-expressed fear that a shortage of necessary skills — a skills gap — is meaningfully enlarging today's unemployment rate. If employers really lacked enough high-skilled applicants for available openings, wages for such workers would be rising. And there's no sign that is happening, as Bureau of Labor Statistics Commissioner Erica Groshen noted at a National Journal forum this week. But over the long term, a deficit of skilled workers could constrain productivity gains, widen inequality, and prompt employers to locate demanding, high-wage jobs overseas.

The skill level of the adult American workforce follows patterns familiar from the college outcomes for our young people. At its pinnacle, the American higher-education system is a marvel that lures the best and brightest from around the globe. Yet in 11 other countries, a larger share of young people now complete postsecondary degrees than in the U.S. And the American students who cross that threshold tend to be those with the good sense to be born into opportunity: Children whose parents hold college degrees are now five times more likely to graduate themselves than those whose parents do not.

The international Organization for Economic Cooperation and Development found similar results when it conducted a groundbreaking study last fall of the skills held by the adult workforce in major economies around the globe. On tests that measured competency in reading, math, and problem-solving, U.S. adults scored below the international average each time. Brilliant American innovators such as Bill Gates, Steve Jobs, and Mark Zuckerberg have defined the Information Age as much as Rockefeller and Carnegie shaped the industrial one, but overall the U.S. trailed 15 countries (of 23 measured) in reading, 20 in math, and 13 in problem-solving.

Part of the problem was that America's best performers as a group didn't match the standards of the highest fliers in Nordic or Asian countries. But the larger reason for the disappointing U.S. performance is that our results displayed what the OECD authors called a "particularly large gap" between those at the top and the bottom. The spread between the performance of adults with college degrees and adults with only high school degrees was larger in the U.S. than anywhere else. The gap between the performance of adults whose parents had obtained a college degree and those who had not also ranked among the largest. The distance in literacy between workers with the most and least education was more than one-third larger in the U.S. than in chart-toppers Japan and Finland; the literacy gap in the U.S. between workers whose parents had obtained the most and least education was more than twice as large as in Japan and 50 percent larger than in Finland.

These findings send a common message: While the U.S. continues to nurture islands of spectacular achievement, it is less committed than its competitors to maximizing the potential of all of its people. The flagship U.S. colleges and universities, which still recruit disproportionately from affluent white families, spend at least twice as much per student and produce far better results in graduation and employment than the less-selective public four- and two-year institutions that enroll most of the growing numbers of minority students.

Likewise, the OECD study found that the American workers who receive the most training on the job are those with the most-advanced skills to begin with. (This problem is more common in other countries, too.) In the U.S. educational and training system, "we invest only in people who do well," Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, said at the National Journal forum. "Every new dollar in the American system only goes toward the winners."

The Youth CareerConnect grants Obama announced Monday offer one way to push back against those trends. These investments, in institutions from the P-TECH high school affiliated with IBM in New York City to six technology-focused career academies in Los Angeles, build on promising models that allow young people to simultaneously earn high school and community-college credit targeted toward job-specific skills in areas from health to manufacturing, while also apprenticing with employers. "This isn't a panacea, but I think this is a very promising model," Labor Secretary Thomas Perez told me at the forum.

As Carnevale says, "The old American competitiveness model" of tolerating mediocre educational results for most while incubating a world-class elite "is not going to work in the future" as international competitors mint larger numbers of their own top talents. Traditionally, investments in young people from modest backgrounds like the innovative hybrid training programs Obama boosted have been justified mostly on grounds of fairness. But increasingly, such interventions look indispensable to America's competitiveness.