Stanford Progressive

The Other Economic Crisis: The Failure of Education and Its Consequences

By Michael Albada, published March, 2010

Even though the country is just pulling out of the Great Recession, an even greater problem threatens to undermine the vitality of America’s economy in the long term. The failure to invest in education, particularly at the primary and secondary levels, and to offer equal access to education, threatens the long-term competitiveness of the American economy. With the outsourcing of manufacturing and tech jobs to India and China, the developed countries face a challenge in staying economically competitive. Although America’s world class universities and elite private high schools ensure that the wealthiest children receive outstanding educations, far too many working and middle class children are not getting the educations they need and deserve. By not making it to college, these kids who should become primary-care doctors, nurses, and teachers, all professions which are sorely hurting for workers, will end up in jail, fighting America’s wars, and working endlessly in low-paying jobs with no hope of ever becoming middle class. This state of affairs is bad for the individual, the community, the state, the economy, and society at large. The kinds of jobs that will buttress the American economy are those which depend on a highly educated workforce across all lines of race, class, and gender. Sadly, this is something that America is failing to accomplish to provide.

The American education system is failing. A recent report released by the University of Chicago titled “Left Behind in America: The Nations Dropout Crisis” gave a scathing indictment of educational performance in this country. According to the report, nearly 6.2 million students in the U.S. between the ages of 16 and 24 in 2007 dropped out of high school, which is more than 16 percent of all Americans in that age range. According to a recent UNICEF report, America’s graduation rate had fallen to 21st out of 27 industrialized countries, just behind Slovakia. In addition to rising dropout rates, the quality of education has also declined. In a ranking of 15-year-olds from 30 industrialized countries, American students scored just 21st in science and 25th in math.

The main cause of this problem is not how much money is spent on education, but rather how the available funds are used. The U.S. spends an average of $9,963 per student per year, the third highest in the world behind Austria and Switzerland. Discrepancies are enormous between school districts, the wealthiest of which rely on additional donations from parents to subsidize high-quality public education only in their district, and in states like California parents have simply pulled their children out of public schools and placed them into private ones, removing many students whose parents could have contributed to the well being of the school by being active and injecting their money and resources. Although some states (such as California) are truly underfunded, in most states the problem is simply that the money available is not being used effectively. Were the huge inequalities in the U.S. education system to be even modestly leveled out, we would witness large gains in learning and test scores across the board. Centralization, at the state if not the federal level, would be a big step in the right direction.

These investments for education will more than pay for themselves in the mid- to long-term. With each degree earned average earnings increase, so that when poor kids fail to go to college or worse, fail to finish high school their chances of earning a middle class income, and being higher paid contributors to taxes, decrease in this workforce were education is key. By shortchanging the poorest students, the state and federal governments are shooting themselves in the foot by decreasing their tax revenue for years to come. Additionally, in today’s increasingly global economy, education is becoming a necessary component for innovation, growth and development. Investment in education is investment in human capital, and lack of the former equals a lack of the latter. Underinvestment in human capital will amount to a tax on the future of this country and could sabotage the ability of younger generations, particularly the brightest poor kids, to get ahead. The price of education is the cost of competitiveness in tomorrow’s economy, and it is in all Americans’ enlightened self-interest to invest in our future.

Within any capitalist democracy, the twin values of liberty and equality exist in tension. The great compromise that was struck gave room for both: equality of opportunity. No matter how poor you were, you could work hard and make it big. The American Dream is what makes out country great, but if we fail to provide quality education to all in this highly globalized information-based economy, we will continue to witness the continued evaporation of that Dream into an America of parallel societies and a permanent underclass with no hope of success.


  1.  Jaime Carver, May 29, 2010 @ 10:03 pm

    Hehe I am literally the first comment to this incredible post!?

  2.  Crystal Corbett, May 30, 2010 @ 6:20 am

    If I had a dime for each time I came to! Amazing read!

  3.  Valerie Connell, May 30, 2010 @ 2:31 pm

    Wow I am literally the first reply to your amazing article!

  4.  Madeleine, December 14, 2010 @ 3:24 pm

    I would like to draw attention to the fact that a major study by the CED released today has matched findings by the OECD, released earlier this week. Findings: if states continue their current pace of progress, in narrowing achievement gaps between different races, ethnic groups and income levels, it could take decades for lagging student groups in some states to catch up to their better-performing peers.

    When linked to the PISA study (of 65 countries) showing a very wide gap between the top 10% and the bottom 10% of 15-year olds in the U.S these are stark, as is the fact that the U.S. has dropping below the OECD average in mathematics (rank 25) for the first time.

    The issues around inclusion and social equality are becoming ever more pronounced, with just the UK and Luxemburg showing greater social division. Authoritative papers have shown that parents of certain ethnic and social groups are less likely to engage with the school. Schools that offer support to these parents are more likely to engage them in their children’s learning. Online tutoring is able to do this and can therefore complement the lack of specialist teaching in early years math.

    Some facts:

    o Children are self-motivated, however as they get older their confidence dips, which can lead to very negative attitudes towards Maths at the upper age range.
    o Maths-Whizz and Education City report a 1.2 million collective world-wide online monthly usage
    o The State of Hawaii has adopted Math-Whizz on a State wide license

    To combat the US numeracy loss, Maths-Whizz the world’s leading online early years (5-13) personalized math tutor would like to invite comment via free trial registration at, with findings to be incorporated into a funded white paper on the importance of early-years online tutoring.

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