America/'s Perfect Storm
Policy Information Report
America’s Perfect Storm
Three Forces Changing Our Nation’s Future
This.report.was.written.by:
Irwin Kirsch, Henry Braun, and
Kentaro Yamamoto of ETS, and
Andrew Sum of Northeastern
Table of Contents
University.
The.views.expressed.in.this.report.
are.those.of.the.authors.and.do.not.
necessarily.reflect.the.views.of.the.
Preface....................................................................................................2
officers.and.trustees.of.Educational.
Testing.Service.
Acknowledgments..................................................................................2
Additional.copies.of.this.report.can.
be.ordered.for.$15.(prepaid).from:
Executive.Summary...............................................................................3
Policy.Information.Center.
Introduction............................................................................................6
Mail.Stop.19-R.
Educational.Testing.Service.
A.Look.Backward...................................................................................8
Rosedale.Road.
Princeton,.NJ.08541-0001.
The.Three.Forces..................................................................................11
(609).734-5949.
The.Divergent.Skill.Distributions........................................................12
pic@ets.org
View.and.download.the..
The.Economy........................................................................................16
report.and.additional.materials..
at.ets.org/stormreport
The.Demographic.Trends.....................................................................19
A.Look.Toward.the.Future...................................................................21
Copyright.©.2007.by..
Implications..........................................................................................24
Educational.Testing.Service...
All.rights.reserved..Educational.
Appendix...............................................................................................27
Testing.Service,.ETS,.and.the.ETS.
logo.are.registered.trademarks.of..
Educational.Testing.Service.(ETS).
in.the.United.States.of.America..
and.other.countries.throughout..
the.world..
January.2007.
Policy.Evaluation.and.
....Research.Center.
Policy.Information.Center.
Educational.Testing.Service
Preface
Dear God, be good to me;
The.authors.document.and.describe.these.three.
The sea is so wide,
forces.—.divergent.skill.distributions.among.U.S..pop-
And my boat is so small.
ulation.groups,.a.changing.economy,.and.demographic.
trends.of.a.growing,.more.diverse.population..They.
project.the.impact.of.these.interactions.upon.the.na-
These.lines,.from.the.Breton.Fisherman’s.Prayer,.strike. tion.25.years.into.the.future..Kirsch.and.his.colleagues.
an.image.of.vulnerability.for.those.who.may.not.be.
warn.us.that.the.confluence.of.these.factors.can.create.
adequately.prepared.for.a.challenging.environment..
a.powerful.dynamic.that.continually.feeds.the.storm.
A.similar.image.is.cast.by.Kirsch,.Braun,.Yamamoto,.
—.putting.our.nation.at.great.risk..They.offer.hope,.
and.Sum.in.America’s Perfect Storm: Three Forces
however,.that.if.we.act.now.and.invest.in.policies.that.
Changing our Nation’s Future..The.authors.offer.the.
will.help.our.nation.grow.together,.we.can.meet.our.
image.of.our.nation.as.a.nautical.convoy..Some.boats.
ideals.as.a.nation.offering.real.opportunity.for.all.its.
are.large,.well.built,.and.able.to.ride.out.the.heaviest.
citizens.and.continue.our.leading.role.in.the.world.
of.turbulent.seas..Others.are.smaller,.but.still.quite.
sturdy,.and.able.to.survive..But,.many.are.fragile,.mea-
gerly.equipped,.and.easily.capsized.in.rough.waters..
Michael.T..Nettles.
This.convoy.is.in.the.midst.of.a.perfect.storm.that.is.
Senior.Vice.President.
the.result.of.a.confluence.of.three.powerful.forces.
Policy.Evaluation.and.Research.Center.
Acknowledgments
The.authors.wish.to.acknowledge.the.following.reviewers:.
the.American.Federation.of.Teachers..Amanda.McBride.
Paul.Barton,.Richard.Coley,.and.Drew.Gitomer.of.ETS;.
was.the.editor.and.Christina.Guzikowsky.designed.the.
Johan.Uvin.of.the.Rhode.Island.Department.of.Educa-
cover.and.provided.desktop.publishing.services..Errors.
tion;.and.Bella.Rosenberg,.former.Director.of.Research.at.
of.fact.or.interpretation.are.those.of.the.authors.
Executive Summary
Our.nation.is.in.the.midst.of.a.perfect.storm.—.the.
in.an.increasingly.competitive.work.environment..
result.of.the.confluence.of.three.powerful.forces.—.that.
These.skills.are.also.needed.to.function.effectively.
is.having.a.considerable.impact.on.our.country..If.we.
in.our.complex.society,.with.its.large.bureaucratic.
maintain.our.present.policies,.it.is.very.likely.that.we.
institutions.and.its.complex.legal,.health.care,.and.
will.continue.to.grow.apart,.with.greater.inequity.in.
retirement.systems..
wages.and.wealth,.and.increasing.social.and.political.
•. More.importantly,.these.skills.are.not.evenly..
polarization..If,.however,.we.recognize.the.power.of.
distributed.across.groups.defined.by.race/ethnicity,.
these.forces.as.they.interact.over.the.years.—.and.we.
country.of.birth,.and.socioeconomic.status..In.fact,.
change.course.accordingly.—.then.we.have.an.oppor-
there.are.substantial.differences.in.average.profi-
tunity.to.reclaim.the.American.dream.in.which.each.of.
ciencies.among.these.groups.that.influence.their.
us.has.a.fair.chance.at.sharing.in.any.future.prosperity..
social,.educational,.and.economic.opportunities..
What.are.the.three.forces.comprising.this.perfect.
•. International.surveys.of.student.and.adult..
storm?.They.are.divergent.skill.distributions,.the.
populations.indicate.that.while.our.average..
changing.economy,.and.demographic.trends.
performance.is.no.better.than.mediocre,.our.degree.
The.first.force.contributing.to.our.country’s.perfect.
of.inequality.(the.gap.between.our.best.and.least.
storm.is.the.wide.disparity.in.literacy.and.numeracy.
proficient).is.among.the.highest.in.OECD.countries..
skills.among.our.school-age.and.adult.populations..
The.second.force.comprises.the.seismic.changes.
•. High.school.graduation.rates.peaked.at.77.percent.
in.our.economy.that.have.resulted.in.new.sources.of.
in.1969,.fell.back.to.70.percent.in.1995,.and.have.
wealth,.novel.patterns.of.international.trade,.and.a.
stayed.in.this.range.into.the.current.decade..The.
shift.in.the.balance.between.capital.and.labor..These.
graduation.rate.for.disadvantaged.minorities.is.
changes.have.been.driven.by.both.technological.in-
thought.to.be.closer.to.50.percent..A.recent.report.
novation.and.globalization,.resulting.in.a.profound.
by.the.Organisation.for.Economic.Co-operation.
restructuring.of.the.U.S..workplace..Indeed,.the.labor.
and.Development.(OECD).indicates.that.the.United.
markets.of.today.are.markedly.different.from.those.of.
States.ranked.16th.out.of.21.OECD.countries.with.
earlier.decades..For.example:
respect.to.high.school.graduation.rates.1
•. In.1950,.manufacturing’s.share.of.total.employment.
•. Data.from.the.National.Assessment.of.Educational.
in.the.United.States.was.33.1.percent..By.1989,.it.was.
Progress.(NAEP).reveal.that.between.1984.and.
down.to.18.2.percent.and,.by.2003,.it.was.10.7.percent.
2004.reading.scores.among.13-.and.17-year-olds.
•. Between.1984.and.2000.the.number.of.employed.
remained.flat,.and.the.achievement.gaps.were.large.
persons.16.years.of.age.and.older.grew.by.29..
and.relatively.stable..For.mathematics.the.story.is.
percent,.or.some.30.million..At.the.same.time,.
only.slightly.different..While.the.mean.scores.for.
employment.in.jobs.associated.with.college-level.
both.the.nation’s.13-.and.17-year-olds.improved.
education.grew.by.some.20.million,.accounting.for.
slightly,.they.did.so.across.all.groups,.with.the.result.
two-thirds.of.the.job.growth.
that.the.average.size.of.the.Black-White.and.His-
panic-White.achievement.gaps.remained.large.and.
•. The.country’s.employment.growth.is.expected.to.
relatively.stable..
continue.through.the.rest.of.this.decade.and.into.
the.next,.with.college.labor.market.clusters..
•. National.surveys.of.our.adult.population.indicate.
(professional,.management,.technical,.and.high-
that.large.numbers.of.our.nation’s.adults,.16.years.
level.sales).expected.to.generate.about.46.percent..
of.age.and.older,.do.not.demonstrate.sufficient.liter-
of.all.job.growth.between.2004.and.2014.
acy.and.numeracy.skills.needed.to.fully.participate.
1..A.number.of.alternative.methodologies.have.been.developed.by.educational.researchers.to.estimate.high.school.graduation.rates..For.a.
discussion.and.review.of.various.approaches.see.Gary.Orfield.(ed.),.Dropouts in America: Confronting the Graduation Rate Crisis,..
Cambridge,.MA,.Harvard.Education.Press,.2004.
One.important.consequence.of.this.shift.in.the.com-
•. In.2004,.nearly.57.percent.of.the.16-.to.64-year-old.
position.of.jobs.in.our.country.has.been.the.increasing.
Hispanic.population.in.the.United.States.was.for-
economic.returns.to.schooling.and.skills..For.example:
eign-born,.up.from.46.percent.in.1990..More.than.
half.of.these.immigrant.Hispanics.lacked.a.high.
•. The.expected.lifetime.earnings.of.males.with.a.bach-
school.diploma.
elor’s.degree.in.1979.were.51.percent.higher.than.
their.peers.with.only.a.high.school.diploma..By.2004,. •. The.lack.of.a.high.school.diploma.by.such.a.large.
however,.this.difference.had.widened.to.96.percent.
proportion.of.Hispanic.immigrants.is.of.concern.
given.the.fact.that.almost.80.percent.of.immigrants.
•. The.earnings.premiums.accruing.to.a.particular.
who.have.not.earned.a.high.school.diploma.report.
level.of.educational.attainment.(e.g.,.high.school.
not.speaking.English.well.or.at.all.
diploma,.bachelor’s.degree).are.substantially.larger.
for.individuals.at.that.level.who.have.higher.cogni-
These.three.forces.—.substantial.disparities.in.the.
tive.skills,.indicating.that.both.education.and.skills.
distributions.of.skills,.economic.restructuring,.and.
contribute.to.individual.opportunities..These.oppor-
demographic.trends.—.are.each.powerful.in.their.
tunities.include.not.only.higher.paying.jobs.but.also. own.right..But.as.they.play.out.together.over.time,.the.
the.chance.for.individuals.to.take.advantage.of.em-
result.is.truly.a.perfect.storm.that,.unlike.the.storm.
ployer-sponsored.training.to.enhance.and.broaden.
chronicled.by.Sebastian.Junger2,.continues.to.gain.
their.skills.throughout.their.working.lives.
strength.with.no.end.in.sight.
The.third.force.involves.sweeping.demographic.
•. Employing.demographic.projections.combined.
changes..The.U.S..population.is.projected.to.grow.
with.current.skill.distributions,.we.estimate.that.by.
from.nearly.300.million.in.2005.to.more.than.360.mil-
2030.the.average.levels.of.literacy.and.numeracy.in.
lion.in.2030..Over.this.period,.our.population.will.be-
the.working-age.population.will.have.decreased.by.
come.increasingly.older.and.more.diverse,.with.immi-
about.5.percent.while.inequality.will.have.increased.
gration.having.a.significant.impact.on.the.composition.
by.about.7.percent..Put.crudely,.over.the.next.25.
of.the.workforce,.as.well.as.of.the.general.population..
years.or.so,.as.better-educated.individuals.leave.the.
workforce.they.will.be.replaced.by.those.who,.on.
•. The.U.S..labor.force.is.projected.to.grow.more.
average,.have.lower.levels.of.education.and.skill..
slowly.over.the.next.20.years.than.it.did.between.
Over.this.same.period,.nearly.half.of.the.projected.
1980.and.2000..None.of.this.growth.is.predicted.to.
job.growth.will.be.concentrated.in.occupations.as-
come.from.native-born.workers.of.prime.working.
sociated.with.higher.education.and.skill.levels..This.
age.(25.to.54).
means.that.tens.of.millions.more.of.our.students.
•. During.the.1980s,.international.migration.account-
and.adults.will.be.less.able.to.qualify.for.higher-
ed.for.about.21.percent.of.our.nation’s.population.
paying.jobs..Instead,.they.will.be.competing.not.
growth;.with.that.contribution.rising.to.31.percent.
only.with.each.other.and.millions.of.newly.arrived.
in.the.1990s..Moreover,.the.U.S..Census.Bureau..
immigrants.but.also.with.equally.(or.better).skilled.
expects.that.between.2000.and.2015,.net.interna-
workers.in.lower-wage.economies.around.the.world.
tional.migration.will.account.for.more.than.half.
As.we.argue.in.this.report,.it.is.both.the.growth.of.
of.our.nation’s.population.growth..
human.capital.and.how.it.is.distributed.that.is.impor-
•. Fueled.both.by.higher.birth.rates.and.by.immigra-
tant.for.the.United.States..Human.capital.is.critical,.
tion,.the.Hispanic.share.of.the.population.is.expect-
however,.not.just.because.of.the.economic.implica-
ed.to.grow.from.14.percent.in.2005.to.slightly.more.
tions..Benjamin.Friedman3.links.our.economic.well-
than.20.percent.by.2030..
being.to.the.fabric.of.our.society,.arguing.that.individ-
uals.and.societies.are.more.trusting,.more.inclusive,.
2..Sebastian.Junger.authored.The Perfect Storm: A True Story of Men Against the Sea..Published.in.1997,.Junger’s.book.recounts.the.tale.of.the.
October.1991.“perfect.storm,”.focusing.on.the.loss.of.the.Gloucester.sword-fishing.boat.Andrea.Gail.off.the.coast.of.Nova.Scotia..
3.See.Benjamin.M..Friedman,.“Meltdown:.A.Case.Study,”.Atlantic Monthly,.July/August.2005.
and.more.open.to.change.when.they.see.their.futures.
and.that.of.their.children.as.bright.and.secure..He..
concludes.that.“Economic.growth.is.not.merely.the.
enabler.of.higher.consumption;.it.is.in.many.ways.the.
wellspring.from.which.democracy.and.civil.society.flow.”.
•. Given.the.forces.described.in.this.report,.a.looming.
question.is.whether.we.will.continue.to.grow.apart.
or,.as.a.nation,.we.will.invest.in.policies.that.will.
help.us.to.grow.together..We.strongly.believe.the..
latter.is.the.better.course.of.action.over.the.long.term..
•. While.new.policies.focusing.only.on.education.and.
skills.will.not.solve.all.the.challenges.associated.
with.existing.inequalities,.if.our.society’s.overall.lev-
els.of.learning.and.skills.are.not.increased.and.the.
existing.gaps.are.not.narrowed,.there.is.little.chance.
that.economic.opportunities.will.improve.among.
key.segments.of.our.population.
Introduction
On.a.continent.bounded.by.two.oceans,.our.society.has.
The.second.set.of.forces.is.driven.by.the.fact.that.
often.employed.nautical.metaphors.to.generate.evoca-
the.U.S..economy.has.undergone.significant.changes.
tive.images..National.political.leaders.used.to.speak,.
in.recent.years..The.labor.markets.of.today.are.mark-
for.example,.of.the.“ship.of.state,”.and.President.John.
edly.different.from.those.of.earlier.decades.as.a.result.
F..Kennedy,.in.arguing.the.case.for.economic.growth.
of.several.developments,.including.industrial.and.
in.the.early.1960s,.claimed.that.“a.rising.tide.lifts.all.
corporate.restructuring,.declines.in.unionization,.
boats.”4.Given.our.country’s.growing.demographic.
technological.change,.and.globalization..The.last.set.
diversity,.however,.perhaps.it.would.be.more.appro-
of.changes.were.made.possible.by.the.combination.of.
priate.now.to.imagine.our.nation.as.a.convoy..Some.
a.series.of.international.trade.agreements,.the.rapid.
of.the.boats.are.large,.well.built,.and.able.to.ride.out.
development.and.diffusion.of.information.and.com-
the.heaviest.of.seas..Others.are.somewhat.smaller,.
munications.technology.(ICT).infrastructure,.advances.
less.well-equipped,.but.still.quite.sturdy..But.many.
in.logistics,.and.foreign.investment.in.developing.
are.fragile,.meagerly.equipped,.and.easily.swamped.in.
countries..An.important.consequence.of.technologi-
rough.waters..That.convoy.—.the.individuals,.families.
cal.change.and.globalization.is.increasing.economic.
and.communities.that.make.up.our.nation.—.is.in.the.
returns.to.higher.levels.of.education.and.skills.8.For.
midst.of.a.“perfect.storm,”.the.result.of.the.confluence.
workers.who.possess.these.characteristics,.opportuni-
of.three.powerful.sets.of.forces:.divergent.skill.distribu-
ties.abound..But.for.those.who.lack.them,.the.econom-
tions,.a.changing.economy,.and.demographic.trends..
ic.future.can.be.quite.dismal..
The.first.set.of.forces.is.evident.in.the.findings.of.
The.third.set.of.forces.is.powered.by.demographic.
a.number.of.large-scale.national.and.international.
trends..The.U.S..population.is.projected.to.grow.from.
surveys.conducted.over.the.past.decades,.which.show.
nearly.300.million.in.2005.to.more.than.360.million.
that.large.numbers.of.our.nation’s.adults.do.not.have.
by.the.year.2030..Certain.minority.groups,.especially.
sufficient.command.of.the.literacy.and.numeracy5.
Hispanics,.represent.a.considerable.and.growing.pro-
skills.needed.to.function.effectively.in.an.increasingly.
portion.of.the.population..Immigration.has.accounted.
competitive.work.environment..Moreover,.skills.are.
for.an.increasingly.large.fraction.of.U.S..population.
not.evenly.distributed.across.groups.defined.by.race/
growth.over.the.past.few.decades.and.is.projected.to.
ethnicity,.nativity,6.and.socioeconomic.status..In.fact,.
do.so.over.the.remainder.of.this.decade.—.and.at.least.
there.are.substantial.differences.in.average.literacy.
into.the.near.future..According.to.the.U.S..Census.Bu-
levels.among.these.groups..In.younger.cohorts,.these.
reau,.these.immigration.patterns,.coupled.with.differ-
differences.are.mirrored.by.critical.differences.in.
ences.in.birth.rates,.will.result.in.substantial.increases.
academic.achievement.and.educational.attainment..
in.the.racial/ethnic.diversity.of.the.nation’s.population.
Moreover,.comparisons.made.possible.by.a.number.
over.the.next.20.to.25.years.and.beyond..For.example,.
of.international.assessments,.including.PISA.(Pro-
Hispanics,.who.now.constitute.about.14.percent.of.the.
gramme.for.International.Student.Assessment).and.
population,.will.constitute.more.than.20.percent.by.
IALS.(International.Adult.Literacy.Survey),.indicate.
2030;.and.non-Hispanic.African.Americans,.who.now.
that.our.younger.cohorts.are.losing.ground.relative.to.
constitute.some.12.5.percent.of.the.population,.will.
their.peers.in.many.developed.nations.7.
4..President.Kennedy.used.this.expression.on.a.number.of.occasions.during.the.1960s..The.earliest.cited.time.was.during.the.presidential.
campaign.of.1960..
5..The.construct.of.numeracy.was.used.in.the.Adult.Literacy.and.Life.Skills.(ALLS).survey.and.was.defined.as.the.knowledge.and.skills..
required.to.effectively.manage.and.respond.to.the.mathematical.demands.of.diverse.situations.
6.The.term.nativity.is.used.to.distinguish.those.who.were.born.in.the.United.States.from.those.born.outside.of.the.United.States.
7..See.Organisation.for.Economic.Co-operation.and.Development,.Learning for Tomorrow’s World: First Results from PISA 00,.Programme.
for.International.Student.Assessment,.Paris,.2004,.and.Andrew.Sum,.Irwin.Kirsch,.and.Robert.Taggart,.The Twin Challenges of Mediocrity
and Inequality: Literacy in the U.S. from an International Perspective,.Policy.Information.Report,.Center.for.Global.Assessment,.Policy.Infor-
mation.Center,.ETS,.2002.
8..See.Richard.J..Murnane.and.Frank.Levy,.Teaching the New Basic Skills,.New.York,.The.Free.Press,.1996..For.a.review.of.the.economic.im-
pacts.of.these.basic.skills.on.the.weekly.and.annual.earnings.of.workers.in.the.United.States,.see.Andrew.Sum,.Literacy in the Labor Force,.
National.Center.for.Education.Statistics,.Washington,.D.C.,.1999,.and.Andrew.Sum,.Irwin.Kirsch,.and.Kentaro.Yamamoto,.Pathways to
Labor Market Success: The Literacy Proficiency of U.S. Adults,.Policy.Information.Report,.Policy.Information.Center,.ETS,.2004.
then.constitute.nearly.14.percent..Over.that.same.pe-
On.the.other.hand,.if.we.respect.the.storm’s.power.
riod,.Asian.Americans.will.see.their.share.of.the.popu-
and.change.course.appropriately,.we.still.have.a.
lation.increase.from.4.percent.to.almost.7.percent..
chance.to.help.more.Americans.share.in.any.future.
prosperity..Surely,.our.nation.will.be.different.than.the.
This.is.not.the.first.report.to.take.note.of.one.or.
one.that.sailed.into.the.storm.more.than.a.decade.ago.
more.of.these.forces,.or.to.warn.of.the.challenges.we.
—.but.it.will.retain.many.of.the.characteristics.that.
face.as.a.nation..Some.of.the.reports.discussed.in.
have.distinguished.it.from.those.of.other.countries..If,.
the.next.section.also.talk.about.our.mediocrity.and.
as.a.nation,.we.agree.that.strengthening.the.convoy.
inequality.in.literacy.and.numeracy.skills,.as.well.as.
and.preserving.its.distinctiveness.are.important,.then.
the.strong.associations.among.education,.literacy,.and.
(perhaps).we.will.act.more.in.concert.with.our.ideals.
economic.success.9.This.report.uses.data.from.recent.
of.a.nation.having.real.opportunity.for.all.
national.and.international.surveys.to.report.on.the.
skill.distributions.of.our.school-age.and.adult.popula-
tions..It.also.looks.at.shifts.taking.place.in.the.work-
force,.and.at.demographic.projections.made.by.the.
U.S..Census.Bureau..Using.statistical.methodologies,.
we.project.what.the.literacy.skills.of.the.next.genera-
tion.will.look.like.if.projected.changes.in.our.demo-
graphics.are.allowed.to.interact.with.existing.skill.
distributions..
While.critics.of.the.earlier.reports.sometimes.sug-
gest.that.their.rhetoric.exaggerates.America’s.challeng-
es,.our.analyses.indicate.that.their.rhetoric.is.not.over-
blown..We.are.in.the.midst.of.a.perfect.storm.in.which.
these.three.powerful.forces.are.combining.to.generate.
waves.that.already.have.had.a.considerable.impact.on.
our.nation..Unlike.the.perfect.storm.chronicled.in.the.
novel.written.by.Sebastian.Junger,.the.forces.behind.
this.storm.continue.to.gain.strength,.and.calm.seas.are.
nowhere.in.sight..We.can’t.hope.to.ride.this.one.out..If.
we.continue.on.our.present.heading.and.fail.to.take..
effective.action,.the.storm.will.have.a.number.of.pre-
dictable.and.dire.implications.for.future.generations,.
with.consequences.that.extend.well.beyond.the.economic.
realm.to.the.ethos.of.our.society..
9..Mediocrity.and.inequality.refer.to.the.performance.of.the.United.States.on.international.surveys.relative.to.other.highly.industrialized.
nations..These.terms.are.taken.from.the.title.of.a.report.written.by.Andrew.Sum,.Irwin.Kirsch.and.Robert.Taggart,.The Twin Challenges of
Mediocrity and Inequality: Literacy in the U.S. from an International Perspective,.Policy.Information.Report,.Policy.Information.Center,.ETS,.
February.2002.
A Look Backward
Historically,.the.United.States.has.provided.eco-
pre-eminent.position.in.the.global.economy..The.
nomic.opportunity.for.most.of.those.willing.to.work.
United.States.led.most.of.the.industrialized.world.in.
hard,.invest.in.themselves,.and.act.responsibly..For.
the.percentage.of.adults.with.a.high.school.and.college.
the.most.part,.we.still.subscribe.to.that.promise,.and.
education.and.accounted.for.a.disproportionate.share.
both.the.civil.rights.and.women’s.rights.movements.
of.world.gross.domestic.product.
have.extended.this.promise.to.groups.often.neglected.
Several.other.post-World.War.II.events.are.worthy.
in.previous.decades..As.the.nation.changed.from.a.
of.note..The.launch.of.Sputnik.in.1957,.as.well.as.the.
predominantly.agrarian.society.to.an.industrial.one.
apparent.growing.economic.power.of.the.Soviet.Union.
in.the.late.19th.and.early.20th.centuries,.labor-market.
in.the.1950s.and.early.1960s,.alerted.the.nation.to.
success.increasingly.depended.on.attaining.at.least.a.
the.need.for.strengthening.mathematics.and.science.
modest.level.of.formal.education,.along.with.a.willing-
education..The.“War.on.Poverty,”.initially.declared.by.
ness.to.“do.a.day’s.work.for.a.day’s.pay.”.Over.time,.as.
President.Johnson.in.1964,.committed.the.federal.gov-
the.structure.of.jobs.and.the.economy.changed,.occu-
ernment.to.reducing.poverty.partly.by.improving.edu-
pational.and.basic.literacy.skills.became.more.essential. cation.investments.in.the.poor.from.pre-school.(Head.
for.obtaining.a.decent.job.and.advancing.in.the.work-
Start).through.adulthood..The.Civil.Rights.Act.of.1964.
force..Eventually,.a.high.school.diploma.emerged.as.a.
represented.an.attempt.to.use.federal.legislation.to.spur.
key.credential.for.economic.success..Through.much.of.
greater.equality.in.U.S..society.—.in.part.through.provid-
the.20th.century,.the.proportion.of.high.school.gradu-
ing.more.equitable.access.to.educational.opportunity.11.
ates,10.as.well.as.the.proportion.of.adults.who.gradu-
ated.from.college,.increased.with.each.successive.age.
Over.the.past.two.decades,.a.series.of.reports.have.
cohort.—.although.those.proportions.differed.substan-
been.published.that.focus.on.the.links.between.educa-
tially.by.race/ethnicity.and,.in.some.cases.(e.g.,.college.
tional.performance,.literacy.skills,.and.the.U.S..econ-
education),.by.gender..
omy..In.1983,.the.National.Commission.on.Excellence.
in.Education.(sometimes.referred.to.as.the.Bell..
After.World.War.II,.the.GI.Bill.of.Rights.provided.
Commission).issued.a.report.on.the.state.of.the..
the.initial.impetus.for.a.rapid.expansion.in.college..
nation’s.educational.system..In.that.report,.the..
attendance.and,.eventually,.the.number.of.college.
commission.made.the.following.widely.cited.statement.
graduates..Although.this.policy.was.motivated.by.
about.the.quality.of.our.school.system:
domestic.policy.considerations,.it.was.certainly.con-
sistent.with.the.American.ethos.and.led.to.the.develop-
The.educational.foundations.of.our.society.
ment.of.a.stronger.human.capital.base.that.helped.to.
are.presently.being.eroded.by.a.rising.tide.of.
drive.productivity.and.economic.growth..Not.only.did.
mediocrity.that.threatens.our.very.future.as.a.
the.education.and.skill.levels.of.U.S..workers.increase.
nation.and.a.people..What.was.unimaginable.
during.this.period,.so.did.the.number.of.individuals.
a.generation.ago.has.begun.to.occur.—.others.
who.were.entering.the.workforce..Thus,.businesses.
are.matching.and.surpassing.our.educational.
had.a.growing.base.of.both.men.and.women.who.
attainments.....we.have.allowed.this.to.happen.
were.better-educated.and.better-skilled.than.those.they.
to.ourselves.12
replaced..This.unprecedented.fund.of.human.capital,.
Shortly.following.the.publication.of.A Nation at
together.with.the.fact.that.the.United.States.(unlike.
Risk,.the.Committee.for.Economic.Development.is-
Europe.and.Japan).had.escaped.the.worst.ravages.of.
sued.its.own.report,.Strategy for U.S. Industrial Com-
World.War.II,.enabled.this.country.to.achieve.a..
petitiveness,.which.called.for.a.variety.of.economic,.
10..See.Paul.Barton,.One-Third of a Nation: Rising Dropout Rates and Declining Opportunities,.Policy.Information.Report,.Policy.Information.
Center,.ETS,.February.2005..In.this.report,.Barton.notes.that.the.percentage.of.high.school.graduates.as.a.percentage.of.our.nation’s.17-
year-olds.peaked.at.77.percent.in.1969,.dropped.to.70.percent.in.1995,.and.has.stayed.close.to.that.level.at.least.through.2001..
11..Unlike.previous.initiatives,.the.Civil.Rights.Act.was.an.explicit.attempt.to.address.the.social.and.economic.inequalities.that.continue.to.
exist.in.our.country.
12..National.Commission.on.Excellence.in.Education,.A Nation At Risk: The Imperative for Educational Reform,.U.S..Government.Printing..
Office,.Washington,.D.C.,.1983.
educational,.and.technological.reforms.to.boost.the.
Concerns.with.slow.productivity.growth,.real-wage.
future.competitiveness.of.the.U.S..economy.13.The.re-
stagnation,.rising.wage.inequality,.and.international.
port.identified.the.quality.of.education,.particularly.at.
competitiveness.continued.throughout.the.remainder.
the.primary.and.secondary.levels,.as.a.key.determinant. of.the.1980s..In.1990,.the.National.Center.on.Educa-
of.the.future.ability.of.the.U.S..labor.force.to.adjust.
tion.and.the.Economy.published.a.report.on.the.work-
to.workplace.changes.that.would.be.produced.by.new.
force-development.challenges.facing.the.American.
technologies.designed.to.improve.labor.productivity..
economy.if.it.wished.to.maintain.high.wages.for.the.
future.workforce.16.The.report.identified.a.number.of.
In.1986,.the.Carnegie.Corporation’s.Forum.on.Edu-
critical.choices.the.nation.must.make.about.the.strate-
cation.and.the.Economy.published.a.report.document-
gies.it.would.pursue.to.bolster.its.economic.competi-
ing.the.changing.structure.of.the.economy,.its.likely.
tiveness..The.Commission.on.the.Skills.of.the.Ameri-
impacts.on.the.education.and.skill.requirements.of.
can.Workforce,.co-chaired.by.two.former.Secretaries.
jobs,.and.the.consequences.for.the.nation’s.schools.and.
of.Labor,.William.Brock.and.Ray.Marshall,.called.for.a.
the.teaching.profession..In.A Nation Prepared: Teachers
wide.array.of.actions.by.national,.state,.and.local.gov-
for the st Century,.the.commission.argued.that
ernments.and.private-sector.firms.to.increase.invest-
If.America.wants.to.compete.on.the.same.terms.
ments.in.the.education.and.training.of.both.youth.and.
as.it.did.in.the.past.—.making.the.most.of.the.
adults.to.allow.the.country.to.maintain.a.high-produc-
workers.with.low.skill.levels.—.then.it.must.ac-
tivity/high-wage.trajectory.
cept.prevailing.world.wage.levels.for.low-skilled.
In.2003,.the.Hoover.Institution’s.Koret.Task.Force.
and.semi-skilled.labor..That.is.we.must.be.
on.K-12.Education.issued.its.report.on.an.appraisal.of.
prepared.for.a.massive.decline.in.our.standard.
the.state.of.the.nation’s.educational.system,.updating.
of.living..The.alternative.is.to.revise.our.view.
findings.that.originally.appeared.in.A Nation at Risk.17.
of.the.role.of.the.worker.in.the.economy..In.the.
Their.report.was.titled.Our Schools and Our Future:
future,.high-wage.level.societies.will.be.those.
Are We Still at Risk?.The.limited.progress.of.the.nation.
whose.economies.are.based.on.the.use.of.a.wide.
since.the.initial.report,.with.respect.to.both.improv-
scale.of.very.skilled.workers,.backed.up.by.the.
ing.high.school.graduation.rates.and.strengthening.
most.advanced.technologies.available.14.
the.literacy.and.numeracy.skills.of.our.students,.was.
The.growing.importance.of.basic.academic.skills.
cited.by.the.task.force..In.their.final.report,.the.Koret.
(reading,.math,.and.writing).in.determining.an.array.
Task.Force.described.the.accelerated.consequences.of.
of.educational,.labor.market,.and.social.outcomes.for.
globalization.since.the.publication.of.A Nation at Risk:.
America’s.youth.was.identified.in.a.1988.monograph.
The.shrinking.globe.has.made.it.easier.than.
published.by.the.Ford.Foundation’s.Project.on.Social.
anyone.in.1983.could.have.imagined.for.invest-
Welfare.and.the.American.Future.15.In.Toward a More
ments.and.jobs.to.go.anywhere.on.the.planet.
Perfect Union,.the.authors.identified.important.associa-
that.seems.likeliest.to.succeed.with.them..Here.
tions.between.basic.academic.proficiencies.of.youth.
we.must.look.to.our.schools.to.produce.the.
and.their.school.performance,.graduation.rates,.college.
highly.educated.citizenry.on.which.America’s.
attendance.rates,.childbearing.behavior,.experience.
future.economic.vitality.depends.18
with.the.criminal.justice.system,.and.annual.earnings.
13..Committee.for.Economic.Development,.Strategy for U.S. Industrial Competitiveness,.New.York,.1984.
14..Carnegie.Forum.on.Education.and.the.Economy,.A Nation Prepared: Teachers for the st Century,.Carnegie.Corporation.of.New.York,..
New.York,.1986.
15..Gordon.Berlin.and.Andrew.Sum,.Toward a More Perfect Union: Basic Skills, Poor Families, and Our Economic Future,.Ford.Foundation.
Project.on.Social.Welfare.and.the.American.Future,.New.York,.1988.
16..Commission.on.the.Skills.of.the.American.Workforce,.America’s Choice: High Skills or Low Wages!,.National.Center.on.Education.and.the.
Economy,.Rochester,.New.York,.1990.
17..See.Koret.Task.Force.on.K-12.Education,.Our Schools and Our Future: Are We Still at Risk?.Hoover.Institution,.Stanford.University,.2003.
18..A.condensed.version.of.the.Koret.Task.Force.report.also.appeared.in.the.following.article:.“Our.Schools,.Our.Future:.Are.We.Still.at.Risk?”.
in.Education Next,.Spring.2003,.pp..9-15.
In.November.2005,.the.National.Center.for.Pub-
recently.in.2002.with.the.passage.of.the.No.Child.Left.
lic.Policy.and.Higher.Education.warned.that.un-
Behind.Act..This.legislation.explicitly.addresses.the.
less.states.made.significant.efforts.to.improve.the.
importance.of.having.every.child.meet.state-man-
educational.attainment.of.all.residents,.the.personal.
dated.standards.of.proficiency.and.sets.out.a.system.of.
income.of.Americans.would.decline.over.the.next.15.
school.and.district.accountability.measures.to.encour-
years.19.Similarly,.the.National.Academy.of.Sciences.
age.compliance..While.educational.analysts.often.
issued.its.own.report,.warning.the.nation.that.it.was.
disagree.over.the.types.of.reforms.needed.to.achieve.
“on.a.losing.path”.in.global.economic.competition.20.
these.objectives,.there.is.general.agreement.that.too.
The.report,.titled.Rising Above the Gathering Storm,.
many.children.are.leaving.school.too.early,.and.too.
contained.a.series.of.recommendations.to.bolster.the.
many.of.those.who.persist.to.earn.(say).a.high.school.
nation’s.long-run.economic.competitiveness,.including. diploma.emerge.with.weak.skills.and.insufficient.
a.strengthening.of.the.math.and.science.proficiencies.
knowledge.21.
of.the.nation’s.K-12.students.and.increased.national.
As.the.next.section.of.this.report.will.show,.these.
commitments.to.basic.research.and.the.training.and.
warnings.and.concerns.about.our.educational.system.
recruitment.of.scientists.
and.its.influence.on.wages.and.the.economy.are.well-
In.response.to.these.and.other.concerns,.federal.
grounded..Unless.we.are.willing.to.make.substantial.
involvement.in.education.over.the.past.three.decades.
changes,.the.next.generation.of.Americans,.on.average,.
has.evolved.through.successive.reauthorizations.of.
will.be.less.literate.and.have.a.harder.time.sustaining.
the.Elementary.and.Secondary.Education.Act,.most.
existing.standards.of.living.
19..The.National.Center.for.Public.Policy.and.Higher.Education,.Income of U.S. Workforce Projected to Decline if Education Doesn’t Improve,.
Policy.Alert,.November.2005.
20..Committee.on.Prospering.in.the.Global.Economy.of.the.21st.Century:.An.Agenda.for.American.Science.and.Technology,.Rising Above the
Gathering Storm,.National.Academy.of.Sciences,.Washington,.D.C.,.2005.
21.For.a.review.of.alternative.views.on.the.problems.of.our.schools.and.the.need.for.reform,.see.the.Spring.2003.issue.of.Education Next.
0
The Three Forces
In.the.following.sections,.we.analyze.each.of.the.three.
Finally,.we.use.information.provided.by.the.U.S..
sets.of.forces.that.constitute.America’s.perfect.storm..
Bureau.of.the.Census.to.examine.recent.and.projected.
First,.we.examine.the.divergent.skill.distributions,.us-
demographic.changes..According.to.these.projections,.
ing.data.from.recent.national.and.international.sur-
the.U.S..population.will.continue.to.grow,.but.will.be-
veys..Skill.distributions.have.a.prominent.role.in.this.
come.increasingly.older.and.more.diverse..Immigration.
report,.not.only.because.they.are.strongly.associated.
will.continue.to.have.a.significant.effect.on.both.the.
with.key.social.and.economic.outcomes.of.adults,.but.
general.population.and.those.who.enter.the.workforce..
also.because.they.have.been.shown.to.be.associated.
According.to.David.Ellwood,.America’s.labor.force.will.
with.these.outcomes.over.and.above.their.effects.on.
grow.much.more.slowly.over.the.next.20.years.than.it.
educational.attainment..Differences.in.the.distribution.
did.between.1980.and.2000,.with.almost.none.of.the.
of.both.educational.attainment.and.skills.by.major.
growth.coming.from.native-born.workers.of.prime.
subgroups.in.our.population.mirror.the.variation.in.
working.age.(i.e.,.25.to.54.years).22.Between.2000.and.
earnings,.income,.and.wealth.seen.in.American.society.
2005,.two-thirds.of.the.nation’s.civilian.labor-force.
Next.we.summarize.key.aspects.of.the.economic.
growth.and.86.percent.of.its.employment.growth.was.
forces.that.are.changing.the.nature.of.work.for.many.
generated.by.new.immigrant.arrivals.
Americans..There.has.been.a.shift.in.the.composition.
of.jobs.toward.those.employing.individuals.with.high-
er.levels.of.education.and.skills..This.shift.is.predicted.
to.continue.through.the.remainder.of.this.decade.and.
well.into.the.next,.with.important.implications.for.
who.is.most.likely.to.gain.access.to.these.jobs.
22..See.David.Ellwood’s.contribution.to.the.report.Grow Faster Together or Grow Slowly Apart: How Will America Work in the st Century?..
The.Aspen.Institute,.1998.
The Divergent Skill Distributions
One.of.the.implications.of.a.globalized,.technologi-
increasingly.complex.society..Performance.in.Levels.
cally-driven.economy.is.that.the.notion.of.what.charac-
3.and.higher.is.considered.to.be.a.minimum.standard.
terizes.high-skilled.workers.is.changing.as.well..Murnane. for.success.in.the.labor.market.26.Findings.from.the.
and.Levy.have.written.about.the.“new.basic.skills,”.
National.Adult.Literacy.Survey.(NALS).indicate.that.in.
which,.they.argue,.comprise.a.broader.range.of.both.
1992.slightly.more.than.half.of.the.U.S..adult.popula-
cognitive.skills.(the.traditional.three.R’s).along.with.a.set.
tion.ages.16.to.65.years.of.age.performed.in.Level.3.
of.the.so-called.“soft.skills.”23.In.fact,.one.can.argue.that.
or.higher.on.each.of.the.three.scales..A.decade.later,.
most.critical.are.those.foundational.skills.that.enable..
results.from.the.Adult.Literacy.and.Life.Skills.Survey.
individuals.to.learn.throughout.their.lifespan.and,.thus,.be. (ALLS).showed.that.the.percentages.decreased.to.be-
able.to.adapt.to.changing.work.conditions.and.demands.
low.50.percent.27.
On.that.score,.we.are.no-
where.near.where.we.need.to.
be.as.a.nation..Over.the.past.
Figure 1
15.years,.a.number.of.literacy.
Percentage of Adults in Each Prose Literacy
surveys.of.nationally.representa-
Proficiency Level, by Race/Ethnicity
tive.samples.of.adults.have.been.
carried.out.24.In.these.surveys,.
60
adult.proficiencies.were.mea-
All Adults
Asian
Black
Hispanic
White
sured.along.three.distinct.scales.
50
49
(prose.literacy,.document.litera-
cy,.and.quantitative.literacy.[nu-
44
41
meracy]).25.For.each.proficiency.
40
scale,.adults.were.categorized.
35
32
33
33
33
into.one.of.five.levels,.with.Level.
30
30
30
28
1.being.the.lowest.and.Level.5.
centage
the.highest..Adults.in.Levels.1.
Per
20
20
and.2.are.characterized.as.pos-
20
17
sessing,.at.best,.basic-.or.inter-
13
14
12
mediate-level.skills,.respectively..
10
9
Although.few.of.these.adults.
3
3
would.be.considered.illiterate.
0
in.the.historical.meaning.of.the.
1 2 3 4/5
1 2 3 4/5
1 2 3 4/5
1 2 3 4/5
1 2 3 4/5
Low
High
Low
High
Low
High
Low
High
Low
High
term,.only.a.small.percentage.
Prose Literacy Level
were.judged.to.have.the.skills.
needed.to.fully.participate.in.an.
Source: Adult Literacy and Life Skills (ALLS) Survey, 2005
23.Murnane.and.Levy,.1996..
24..These.surveys.include.the.National.Adult.Literacy.Survey.(NALS,.1992),.the.International.Adult.Literacy.Survey.(IALS,.1995),.the.Adult.
Literacy.and.Life.Skills.Survey.(ALLS,.2005),.and.the.National.Assessment.of.Adult.Literacy.(NAAL,.2005).
25..NALS.and.IALS.employed.a.quantitative.literacy.scale,.but.ALLS.employed.a.numeracy.scale.instead..While.the.quantitative.scale.dealt.
primarily.with.arithmetic.skills.embedded.in.texts,.the.numeracy.scale.focuses.more.on.mathematical.reasoning.and,.as.such,.represents.
a.broader.construct.that.is.more.relevant.to.technologically.advanced.societies..Relatively.speaking,.adults.performed.least.well.on.the.
numeracy.scale.in.the.ALLS.survey..
26..A.number.of.national.and.state.organizations.in.the.United.States,.including.the.National.Governor’s.Association,.identified.proficiency.
in.Level.3.as.a.minimum.for.success.in.today’s.labor.market..See,.for.example,.John.Comings,.Andrew.Sum,.and.Johan.Uvin,.New Skills
for a New Economy: Adult Education’s Role in Sustaining Economic Growth and Expanding Opportunity,.Massachusetts.Institute.for.a.New.
Commonwealth,.Boston,.December.2000.
27..See.Irwin.Kirsch,.Ann.Jungeblut,.Lynn.Jenkins,.and.Andrew.Kolstad,.Adult Literacy in America: A First Look at Results of the National
Adult Literacy Survey,.U.S..Department.of.Education,.September.2003..See.also.Organisation.for.Economic.Co-operation.and.Develop-
ment.and.Statistics.Canada,.Learning a Living: First Results of the Adult Literacy and Life Skills Survey,.Paris,.2005.
An.equally.disturbing.picture.emerges.when.the.profi-
Asian.adults..Readers.interested.in.more.detail.on.these.
ciencies.of.adults.from.various.subgroups.of.the.popula-
literacy.data.are.referred.to.Appendix.Tables.A1.and.A2.
tion.are.compared..Figure.1,.using.ALLS.data,.shows.
Does.it.really.matter.where.one.falls.on.these.lit-
the.percentages.of.adults.ages.16.to.65.in.each.prose.
eracy/numeracy.scales?.Yes..In.fact,.data.from.these.
proficiency.level.by.race/ethnicity..According.to.the.ALLS. same.surveys.reveal.substantial.differences.by.literacy.
data,.Black,.Hispanic,.and.Asian.adults.are.significantly.
level.in.labor-force.participation.rates,.job.skill-level.
more.likely.to.perform.in.the.lowest.level.on.the.prose.
requirements,.weekly.and.annual.earnings,.and.access.
scale.when.compared.with.White.adults..The.percentage.
to.lifelong.learning..For.example,.only.49.percent.of.
of.Hispanic.adults.who.demonstrate.skills.in.the.lowest.
adults.in.Level.1.on.the.prose.scale.reported.partici-
of.the.five.literacy.levels.is.four.times.that.of.White.adults. pating.in.the.workforce.(i.e.,.being.either.employed.or.
(49.percent.compared.with.12.percent)..Among.Black.
unemployed.and.looking.for.work)..This.percentage.
adults,.this.ratio.is.2.8.times,.while.for.Asian.adults.it.is.
increased.to.77.percent.for.adults.in.Level.3,.and.to.91.
2.3..Not.surprisingly,.therefore,.much.smaller.percentag-
percent.for.those.in.Level.5..Similar.trends.were.found.
es.of.these.three.racial/ethnic.groups.demonstrate.skills.
for.the.document.and.quantitative/numeracy.scales..
in.the.highest.two.levels.on.the.prose.scale..Here.we.
see.17.percent.of.White.adults.perform.in.Levels.4.and.
These.differences.in.literacy.skills.and.labor-market.
5.compared.with.only.3.percent.of.Black.and.Hispanic.
participation.rates.also.are.accompanied.by.consider-
adults.and.9.percent.of.Asian.adults.
able.gaps.in.earnings.28.In.1992,.average.weekly.earn-
ings.were.about.$355.for.adults.in.Level.1,.about.$530.
Additional.insight.into.the.sources.of.these.differ-
for.those.in.Level.3,.and.about.$910.for.those.in.Level.
ences.can.be.gained.by.considering.these.subgroups.
5.on.the.prose.scale..That.is,.the.weekly.earnings.of.
further.divided.by.nativity.status..In.2003,.according.to.
adults.in.Level.5.were.some.2.6.times.those.of.adults.
the.U.S..Bureau.of.the.Census,.foreign-born.individuals.
in.Level.1..Furthermore,.adults.with.higher.literacy/
represented.some.12.percent.of.the.U.S..population,.with. numeracy.skills.were.more.likely.to.participate.in.for-
about.25.percent.coming.from.Asia.and.more.than.50.
mal.education.and.training.than.those.with.more.lim-
percent.coming.from.Latin.America..When.we.compare.
ited.skills..The.ALLS.report.noted.that.adults.in.Level.
the.average.differences.in.literacy.scores.with.White.
3.were.nearly.four.times.more.likely.to.participate.
adults.of.the.same.nativity,.there.are.some.interesting.
in.these.types.of.programs.compared.with.adults.in.
patterns..Non-native.Black.adults.perform.better.on.the.
Level.1,.with.this.ratio.increasing.to.almost.six.times.
prose.scale.than.their.native-born.peers.—.the.average.
for.adults.in.Levels.4.and.5.on.the.prose.scale..Thus,.
skills.gap.among.native.Black.adults.compared.with..
not.only.are.less-skilled.adults.less.able.to.adapt.to.a.
native.White.adults.is.three.times.larger.than.it.is.among.
changing.employment.climate,.they.are.less.likely.to.
non-native.Black.and.White.adults.(42.points.compared.
have.the.opportunity.to.develop.the.requisite.skills.29
with.14.points.on.the.prose.scale)..In.contrast,.among.
Hispanics,.the.skills.gap.between.non-native.Hispanic.
One.might.argue.that.while.concerns.about.today’s.
and.White.adults.almost.doubles,.increasing.from.an.
gaps.in.literacy.and.numeracy.are.understandable,.
average.of.32.points.to.an.average.of.61.points..Yet.an-
the.current.focus.on.educational.improvement,.the.
other.pattern.holds.for.Asians:.Native-born.Asian.adults.
institution.of.national.and.state.standards,.along.with.
outscore.native-born.White.adults.by.more.than.30.
increased.spending.on.K-12.education,.ensure.that.the.
points.on.the.prose.scale,.while.non-native.White.adults.
gaps.are.closing..Unfortunately,.recent.reports.on.high.
perform.only.slightly.better.(11.points).than.non-native.
school.graduation.rates30,.as.well.as.on.student.per-
28.Estimates.are.based.on.those.persons.who.reported.full-time.employment.(i.e.,.working.at.least.35.hours.per.week).
29..Sum,.Kirsch,.and.Yamamoto,.2004,.Organisation.for.Economic.Co-operation.and.Development.and.Statistics.Canada,.2005.
30..A.number.of.alternative.methodologies.have.been.developed.by.educational.researchers.to.estimate.high.school.graduation.rates..For.a.
comprehensive.review.of.alternative.estimates.of.high.school.dropout.rates.in.the.United.States,.and.variations.across.regions,.states,.and.
demographic.groups,.see.Orfield,.2004;.Andrew.Sum.et.al.,.The Hidden Crisis in the High School Dropout Problems of Young Adults in the
U.S.: Recent Trends in Overall School Dropout Rates and Gender Differences in Dropout Behavior,.report.prepared.by.the.Center.for.Labor.
Market.Studies,.Northeastern.University,.Boston,.for.the.Business.Roundtable,.Washington,.D.C.,.2002.
formance.in.reading.and.mathematics,.suggest.other-
content.area,.performance.is.described.on.measures.
wise..The.2001.public.high.school.on-time.graduation.
that.range.from.0.to.800,.with.an.overall.mean.of.500..
rates.for.Black.(50.percent).and.Hispanic.(53.percent).
On.the.composite.math.scale,.for.example,.the.
students.were.well.below.those.of.White.(75.percent).
mean.score.of.U.S..15-year-olds.was.483,.which.was.
and.Asian.(77.percent).students.31.International.com-
17.points.below.the.OECD.average.score.of.500..The.
parisons.offer.no.comfort:.For.calendar.year.2003,.the.
difference.is.statistically.significant,.with.the.United.
United.States.ranked.16th.out.of.21.OECD.countries.
States.ranked.24th-highest.among.the.29.OECD.
with.respect.to.high.school.graduation.rates..Our.
countries.for.which.data.were.available..In.fact,.the.
graduation.rate,.estimated.to.be.73.percent,.was.well.
U.S..score.was.significantly.lower.than.those.of.20.
below.the.90.percent.or.more.reported.for.Germany,.
countries,.statistically.the.same.as.three.countries,.and.
Greece,.Ireland,.Japan,.Norway,.and.Switzerland.32
significantly.above.only.five.OECD.countries..On.the.
Performance.data.from.national.surveys.are.no.
science.assessment,.the.U.S..mean.score.was.9.points.
more.promising..Data.from.the.National.Assessment.
below.the.OECD.average..This.performance.merits.a.
of.Educational.Progress.(NAEP).indicate.that.be-
rank.of.20th.among.29.OECD.countries..On.the.read-
tween.1984.and.2004.average.reading.scores.of.both.
ing.assessment,.the.U.S..results.were.more.nearly.in.
the.nation’s.13-year-olds.and.17-year-olds.have.been.
the.middle.of.the.pack..The.value.added.by.instruction.
essentially.flat..During.this.same.period,.the.Black-
through.age.15.for.many.students.seems.to.be.consid-
White.and.Hispanic-White.achievement.gaps.have.
erably.lower.than.in.many.other.industrial.countries.35
remained.large.and.relatively.stable..In.math,.the.story.
is.somewhat.brighter..Between.1986.and.2004,.average.
math.scores.in.NAEP.increased.significantly.for.both.
13-year-olds.and.17-year-olds..The.growth.in.math.was. Table 1
shared.among.all.groups.of.students,.but.the.average.
Comparative Performance of U.S. 15-Year-Old
size.of.the.Black-White.and.Hispanic-White.achieve-
Students on the 2003 PISA Math, Reading, and
ment.gaps.remained.large.and.relatively.stable.33.There. Science Assessments
is.also.considerable.evidence.that.these.gaps.are.sub-
stantial.even.for.students.attending.the.same.schools.34.
Math
Reading
Science
Readers.interested.in.more.detail.on.NAEP.scores.are.
U.S. Average Score
483
495
491
referred.to.Appendix.Tables.A3.and.A4.
OECD Average
500
494
500
Looking.beyond.our.borders,.data.from.PISA.reveal.
U.S.-OECD Difference
-17
+1
-9
that.in.no.area.of.achievement.is.the.United.States.
among.the.world’s.leaders.in.terms.of.average.educa-
U.S. Rank Among
24th
15th
20th
tional.output.or.yield.at.age.15.—.despite.the.fact.that.
29 Countries
we.are.among.the.leaders.in.per-pupil.spending..Select-
Source: PISA, 2003.
ed.results.from.the.mathematics,.reading,.and.science.
assessments.for.2003.are.displayed.in.Table.1..In.each.
31..Christopher.B..Swanson,.“Sketching.a.Portrait.of.Public.High.School.Graduation:.Who.Graduates?.Who.Doesn’t”.in.Dropouts in America:
Confronting the Graduation Rate Crisis,.Cambridge,.MA,.Harvard.Education.Press,.2004..
32..Organisation.for.Economic.Co-operation.and.Development,.Education at a Glance,.OECD.Indicators,.2005..
33..Marianne.Perie,.Rebecca.Moran,.and.Anthony.D..Lutkus,.NAEP 00 Trends in Academic Progress: Three Decades of Student Performance in
Reading and Mathematics.(NCES.2005-464),.U.S..Department.of.Education,.Institute.of.Education.Sciences,.National.Center.for.Educa-
tion.Statistics,.Washington,.D.C.,.July.2005.
34..Henry.Braun.et.al.,.“The.Black-White.Achievement.Gap:.Do.State.Policies.Matter?”.Education Policy Analysis Archives,.14.(8),.March.20,.
2006..Retrieved.4-20-06.from.http://epaa.asu.edu/epaa/v14n8/.
35..Herbert.J..Walberg,.“Examinations.for.Educational.Productivity,”.in.Williamson.Evers.and.Herbert.J..Walberg.(eds.),.Testing Student
Learning, Evaluating Teacher Effectiveness,.Hoover.Institution.Press,.Stanford.University,.Stanford,.2004;.and.Herbert.J..Walberg,.Spending
More While Learning Less: U.S. School Productivity in International Perspective,.Thomas.B..Fordham.Foundation,.July.1998.
This.mediocre.performance.is.not.limited.to.our.
The.combination.of.our.relative.(mediocre).position.
school-age.populations..Data.from.the.IALS.shown.
with.respect.to.average.performance.and.our.leading.
in.Table.2.provide.a.basis.for.comparing.U.S..adults.
position.with.respect.to.inequality.in.performance.
to.adults.in.19.other.participating.high-income.coun-
leads.to.concern.about.the.growing.danger.to.the.well-
tries..Only.on.the.prose.scale,.where.the.United.States.
being.of.our.nation..This.disparity.in.skills.is.related.to.
ranked.9th.highest,.was.the.U.S..score.significantly.
the.disparity.we.see.in.the.educational.attainment.of.
higher.than.the.mean.for.all.20.high-income.countries.. our.population.and.to.the.growing.disparities.in.social.
Again,.on.none.of.the.literacy.measures.is.the.United.
and.economic.outcomes..Ignored,.these.differences.
States.a.world.leader..In.fact,.on.each.of.the.three.
may.not.only.reduce.our.ability.to.compete.interna-
scales,.the.U.S..average.is.approximately.one-third.to.
tionally.on.a.high-wage.strategy,.but.also.will.surely.
one-half.of.a.standard.deviation.below.the.two.interna-
threaten.the.cohesiveness.of.the.nation.
tional.frontrunners:.Sweden.and.Norway..On.the.IALS,.
as.on.PISA,.the.U.S..average.is.just.that.—.average..
Table 2
We.are.among.the.world.leaders,.however,.in.the.
amount.of.variability.in.our.score.distributions.—.the.
Comparison of Mean Scores on IALS for the
gap.between.our.best.and.worst.performers..In.IALS,.
United States and 20 High-Income Countries
the.United.States.was.ranked.either.first.or.second.
High-Income
on.this.measure..Similarly,.in.PISA.2000,.the.United.
U.S.
Countries
U.S. Rank
States.was.among.the.countries.with.the.highest.
Prose Literacy
273
267
9th
standard.deviation.on.the.overall.reading.scale..Only.
Document Literacy
267
267
13th
Belgium,.Germany,.and.New.Zealand.were.reported.to.
Quantitative Literacy
274
270
13th
have.larger.standard.deviations..
Source: IALS, tabulations by authors, 2002.
The Economy
The.reorganization.of.work.in.the.United.States.under.
ing.not.only.of.manufacturing.jobs.but.also.of.so-called.
competitive.pressures,.and.the.impetus.of.technologi-
knowledge.worker.jobs.is.becoming.increasingly.com-
cal.changes.(particularly.the.introduction.of.informa-
mon.37.From.call.centers.and.help.desks.to.software.
tion.technologies),.has.had.—.and.will.continue.to.have. development,.income.tax.form.preparation,.financial.
—.a.substantial.impact.on.the.structure.of.jobs.and.
research,.engineering.and.architectural.design,.and.
the.demand.for.certain.skill.sets.in.our.labor.market..
medical.diagnosis,.it.is.both.feasible.and.economically.
Computerization.and.globalization.have.changed.
attractive.to.have.work.performed.where.wages.and.
manufacturing.enormously..To.cite.but.one.example,.
the.cost.of.benefits.are.much.lower.than.in.the.United.
technological.developments.within.the.industry,.such.
States..In.Thomas.Friedman’s.memorable.phrase,.“the.
as.computer-controlled.lathes,.automated.assembly.
world.is.flat.”38.That.is,.barriers.to.the.flow.of.work.have.
lines,.and.robotic.quality.control,.have.altered.auto-
been.significantly.reduced,.with.both.positive.and.nega-
mobile.production.so.that.significantly.fewer.—.but.
tive.effects.on.U.S..workers.and.consumers,.with.the.
higher.skilled.—.workers.are.needed.to.produce.a.fixed.
former.facing.downward.pressures.on.wages.and.the.
number.of.vehicles..These.shifts.have.been.accelerated.
latter.benefiting.from.lower.prices..
by.international.trade.agreements.that.have.increased.
There.also.has.been.a.dramatic.shift.in.the.com-
the.share.of.imports.in.the.industry,.further.reducing.
position.of.the.job.distribution.in.America.toward.
domestic.employment..In.other.areas,.such.as.textiles,.
professional,.management.and.management.support,.
large.international.wage.differentials.and.dramatic.
technical,.and.high-level.sales.positions.39.Many.of.the.
reductions.in.the.cost.of.shipping.make.it.possible.
faster-growing.private-sector.services.and.financial.
to.send.raw.materials.halfway.around.the.world,.use.
industries.employ.a.greater.proportion.of.individuals.
them.to.manufacture.garments,.and.return.the.com-
in.these.college-labor-market.occupations..At.the.same.
pleted.garments.to.the.United.States.at.a.fraction.of.
time,.changes.in.technology.and.the.mix.of.industries.
what.it.would.cost.to.manufacture.the.same.garments.
in.manufacturing.have.also.increased.the.demand.for.
on.our.shores..
workers.with.these.skills..For.example,.in.1984,.only.
At.the.same.time,.large,.structural.trade.deficits.
21.percent.of.those.employed.in.the.nation’s.manufac-
mirror.the.dramatic.losses.in.employment.in.the.
turing.industries.held.a.job.in.a.professional,.mana-
nation’s.manufacturing.industries..Between.1999.and.
gerial,.or.technical.occupation.40.By.2000,.nearly.28.
2004,.payroll.employment.in.the.nation’s.manufactur-
percent.of.workers.in.manufacturing.were.employed.
ing.industries.declined.from.17.3.million.to.slightly.
in.these.occupations.
under.14.4.million,.a.drop.of.nearly.17.percent..
From.1984.to.2000,.the.number.of.employed.per-
Looked.at.over.a.longer.period,.the.situation.is.even.
sons.age.16.and.older.(wage.and.salary.workers,.as.
worse..In.1950,.manufacturing’s.share.of.total.employ-
well.as.self-employed.workers).increased.by.more.than.
ment.was.33.1.percent..By.1989,.it.was.down.to.18.2.
30.million..This.represented.an.increase.of.nearly.29.
percent.and,.by.2003,.it.was.10.7.percent.36
percent.over.the.16-year.period..Within.each.of.the.
More.recently,.with.the.advent.of.substantial.
management,.professional,.technical,.and.high-level.
amounts.of.worldwide.broadband.capacity,.outsourc-
sales.categories,.job.growth.exceeded.that.for.all.U.S..
36..Eamonn.Fingleton,.Unsustainable: How Economic Dogma is Destroying American Prosperity,.New.York,.Nation.Books,.2003.
37..For.a.review.of.outsourcing.developments.and.their.impacts.on.U.S..workers,.see.C..Alan.Garner,.“Offshoring.in.the.Service.Sector:.Eco-
nomic.Impact.and.Policy.Issues,”.Federal.Reserve.Bank.of.Kansas.City,.Economic Review,.3rd.Quarter,.pp..5-37,.and.Timothy.Sturgeon.
and.Frank.Levy,.Measuring the Offshoring of Service Work and Its Impact on the United States,.MIT,.Cambridge,.MA,.March,.2005..
38..Thomas.Friedman,.The World Is Flat: A Brief History of the st Century,.New.York:.Farrar,.Straus,.and.Giroux,.2005..For.a.more.nuanced.
view.of.Friedman’s.book,.see.Edward.Leamer,.A Flat World, a Level Playing Field, a Small World, After All, or None of the Above?.Available.at.
uclaforecast.com/reviews/Leamer_FlatWorld_060221.pdf.
39..Under.the.occupational.coding.system.used.by.the.U.S..Census.Bureau.in.the.CPS.survey.until.2003,.occupations.were.classified.on.this.
1990.Census.occupational.coding.structure..From.2003.onward,.the.U.S..Census.Bureau.shifted.to.the.new.SOC.Occupational.Classifica-
tion.System.that.utilizes.a.different.system.for.categorizing.jobs.into.occupational.clusters..We.have.combined.SOC.categories.for.the.
2000-2005.and.2004-2014.periods.to.closely.match.the.earlier.concepts.of.management,.professional,.and.technical.positions..
40.See.U.S..Bureau.of.Labor.Statistics,.Employment and Earnings,.January.1985,.Table.25,.p..183.
workers..Employment.growth.in.these.four.college-
These.changes.in.the.occupational.structure.in.the.
labor-market.occupation.clusters.exceeded.20.million;.
United.States.have.important.consequences.for.the.
that.is,.they.accounted.for.two-thirds.of.all.of.the.job.
educational.and.literacy.requirements.of.jobholders..
growth.in.the.nation.even.though.they.represented.
The.demand.for.college-educated.and.more.highly.lit-
only.one-third.of.all.of.the.nation’s.workers.at.the.
erate.workers.has.increased.over.the.past.two.decades,.
start.of.this.period.in.1984..The.two.fastest-growing.
enhancing.the.economic.returns.to.schooling.and.
occupational.categories.were.management-related.
skills..The.literacy.and.numeracy.proficiencies.of.U.S..
positions,.which.increased.by.nearly.71.percent,.and.
adults,.as.well.as.their.educational.attainment,.have.a.
professional.employment,.which.increased.by.nearly.
strong.influence.on.their.ability.to.gain.access.to.the.
59.percent,.both.more.than.doubling.the.average.for.
more.highly.skilled.professional,.management,.and.
all.occupations.41.
technical.occupations.—.the.job.categories.that.also.
provide.more.opportunities.to.apply.reading,.writing,.
Over.the.2000.to.2005.period,.civilian.employment.
and.math.skills.as.well.as.to.participate.in.employer-
is.estimated.by.the.U.S..Bureau.of.Labor.Statistics.
sponsored.training..
to.have.risen.by.only.some.5.million,.or.3.7.percent..
Employment.in.management-related,.professional,.and.
The.proportion.of.employed.adults.who.held.profes-
technical.occupations.combined.grew.by.2.9.million,.
sional,.management-related,.technical,.or.high-level.
or.6.4.percent.—.more.than.double.the.growth.rate.for.
sales.occupations.at.the.time.of.the.1992.NALS.was.
all.other.occupations.in.the.labor.market.42.The.profes-
strongly.associated.with.their.completed.years.of.post-
sional,.management-related,.and.technical.occupations.
secondary.schooling.and.their.prose.and.quantitative.
generated.just.under.60.percent.of.the.net.growth.in.
proficiency.scores..Among.both.associate.degree.and.
employment.between.2000.and.2005..If.high-level.sales.
bachelor’s.degree.recipients,.the.likelihood.of.an.em-
workers.are.included.in.the.total,.then.their.share.of.net. ployed.person.holding.a.college-labor-market.job.was.
job.growth.comes.closer.to.65.percent.43
strongly.and.consistently.correlated.with.their.prose.
and.quantitative.proficiencies.(see.Table.3)..
National.employment.projections.by.the.U.S...
Bureau.of.Labor.Statistics.foresee.a.strengthening.of.
Interestingly,.college.graduates.with.weak.literacy.
job.growth.over.the.2004.to.2014.period,.with.the.total. and.numeracy.proficiencies.were.much.more.likely.
number.of.employed.persons.increasing.by.some.19.
than.their.more.highly.skilled.peers.to.be.underem-
million,.or.13.percent..If.these.projections.hold.true,.
ployed.—.holding.jobs.that.did.not.require.a.college.
then.professional,.management,.technical,.and.high-
degree.and.paid.considerably.less.than.their.more.
level.sales.positions.will.generate.about.46.percent.of.
highly.skilled.counterparts..For.example,.less.than.half.
all.job.growth.in.the.nation.over.the.2004-2014.de-
of.employed.four-year.college.graduates.whose.prose.
cade.44.Of.the.remaining.mix.of.jobs.in.our.economy,.
proficiency.placed.them.in.Level.1,.and.only.a.slight.
only.service.occupations,.many.of.which.are.relatively.
majority.of.those.in.Level.2,.were.working.in.college-
low-skilled,.are.projected.to.grow.at.an.above-average.
labor-market.occupations.
pace.(19.percent)..Employment.of.clerical/administra-
The.ALLS.survey.found.that.U.S..workers.with.
tive.support.and.production.workers.will.increase.at.a.
strong.skill.profiles.were.much.more.likely.to.have.
rate.well.below.the.average.for.all.occupations..Readers.
jobs.that.required.them.to.engage.in.reading.and.writ-
interested.in.more.data.on.changes.in.the.employment.
ing.tasks.at.work.45.In.particular,.the.survey.revealed.
structure.are.referred.to.Appendix.Tables.A5,.A6,.and.A7.
41..The.occupational.employment.estimates.for.calendar.year.2000.are.based.on.the.use.of.population.weights.from.the.1990.Census..These.
employment.estimates.were.later.revised.by.the.Bureau.of.Labor.Statistics.(BLS).to.reflect.new.population.weights.from.the.2000.Census,.
but.they.did.not.revise.the.occupational.employment.estimates.under.this.coding.system.
42..Between.2000.and.2005,.the.rate.of.growth.for.all.other.occupations.was.only.2.6.percent.
43..In.the.SOC.classification.system,.we.consider.sales.supervisors.and.sales.representatives.as.high-level.sales.workers,.but.we.exclude.real.estate.brokers.
44..For.a.more.detailed.review.of.the.employment.outlook.for.the.nation,.see.U.S..Bureau.of.Labor.Statistics,.“Employment.Outlook:.2004-14,”.
Monthly Labor Review,.November.2005.
45..Organisation.for.Economic.Co-operation.and.Development.and.Statistics.Canada,.Learning a Living: First Results of the Adult Literacy and
Life Skills Survey,.Paris,.2005.
Table 3
Percentage of All Employed Workers and Two-Year and Four-Year College Graduates with Jobs in
Professional, Technical, or Management Occupations, by Prose Proficiency Level, 1992
Schooling
Level 1
Level 2
Level 3
Level 4
Level 5
Overall
Two-Year Degree
28%
29%
37%
43%
40%
38%
Four-Year Degree or Higher
46
56
64
75
83
71
All Employed Workers
5
14
26
50
72
27
Source: Andrew Sum, Literacy in the Labor Force: Results from the National Adult Literacy Survey, 1999.
very.strong.links.between.the.literacy.proficiencies.of.
information.that.comes.our.way..As.the.likelihood.of.
workers.and.their.access.to.knowledge-expert,.mana-
long-term.employment.declines,.and.as.greater.num-
gerial,.and.high-skill.information-processing.jobs.46.
bers.of.individuals.will.be.required.to.assume.more.re-
For.example,.only.13.percent.of.U.S..adults.were.at.
sponsibility.for.managing.various.aspects.of.their.lives.
Levels.4.or.5.on.the.numeracy.scale,.but.they.repre-
(including.career.planning,.health.care,.and.retire-
sented.36.percent.of.the.workers.in.knowledge-expert.
ment),.higher.levels.of.skills.will.be.required.for.full.
jobs.and.one-fifth.of.those.in.high-skill.information-
participation.in.our.society..The.growing.divergence.in.
processing.occupations..Nearly.three-fourths.of.the.
labor-market.outcomes.and.prospects.based.on.educa-
workers.in.low-skill.service.occupations.had.numeracy. tion.and.skills,.and.the.implications.these.trends.have.
skills.at.or.below.Level.2..
for.our.society,.deserve.serious.attention.from.policy-
makers.at.all.levels.
The.average.weekly.pay.gap.between.workers.in.
knowledge-expert.and.management.positions.and.
Figure 2
those.in.low-skill.service.occupations.is.quite.size-
able,.with.the.former.earning.a.positive.premium.of.
Estimated Weekly Earnings Premiums of
68.percent,.and.the.latter.a.negative.premium.of.50.
Workers in Selected Occupations in the United
percent.relative.to.the.estimated.weekly.earnings.of.
States Relative to Manufacturing-Related
manufacturing-related.occupations.(Figure.2)..These.
Occupations (in Percentages)
differential.premiums.translate.into.a.salary.ratio.of.
more.than.3-to-1.
80
68
In.fact,.the.relative.wage.gap.in.the.United.States.
60
57
between.knowledge.experts.or.managers.and.low-
skill.service.workers.was.the.second.highest.of.the.six.
40
countries.studied.in.the.2003.ALLS.assessment..Only.
Canada’s.was.larger.
21
20
We.can.speculate.as.to.the.cause.and.effect.of.the.
cent
increasing.return.on.education.and.skills.that.we.have.
Per
0
seen.in.recent.years;.that.is,.whether.it.has.resulted.
from.a.greater.demand.for.credentials.to.gain.access.
-20
to.existing.jobs.or.from.actual.changes.in.education.
-20
and.skill.requirements.of.jobs..Regardless,.higher.
-40
levels.of.skill.and.education.are.important.not.only.for.
gaining.access.to.better.jobs,.but.also.for.negotiating.
-50
our.bureaucratic.society.and.its.complex.legal,.health.
-60
Knowledge
Managers
Information
Information
Service
care,.and.retirement.systems,.and.for.accessing.and.
Experts
High Skills
Low Skills
Low Skills
comprehending.the.seemingly.limitless.amount.of.
Source: OECD and Statistics Canada, Learning a Living, 2005.
46..Organisation.for.Economic.Co-operation.and.Development.and.Statistics.Canada,.Learning a Living,.“Chapter.Six:.Skills.and.the.Nature.of.
the.Workplace,”.Paris,.2005.
The Demographic Trends
The.U.S..population.is.diverse.and.becoming.more.
gration..Mexico.has.been.by.far.the.largest.source.of.
so..In.recent.years,.foreign.immigration.to.the.United.
new.immigrants,.with.the.2.17.million.arrivals.from.
States.has.reached.levels.not.seen.in.almost.a.century..
that.country.constituting.one-third.of.the.total..Only.
This.immigrant.population.has.contributed.at.an.in-
one.of.the.other.12.countries,.Canada,.was.a.predomi-
creasingly.high.rate.to.the.nation’s.population.growth.
nantly.English-speaking.country..Although.a.number.of.
and,.especially,.to.growth.in.the.nation’s.civilian.labor.
the.highly.educated.immigrants.from.several.of.these.
force.47.During.the.1980s,.net.international.migration.
countries.did.study.English.before.coming.to.the.United.
accounted.for.only.21.percent.of.the.nation’s.population.
States,.relatively.few.immigrants.arrive.in.the.United.
growth,.but.its.contribution.to.population.growth.rose.to.
States.with.a.strong.base.of.English-speaking,.-reading,.
31.percent.in.the.1990s.48.The.U.S..Census.Bureau.projects. and.-writing.skills..
that,.over.the.2000-2015.period,.net.international.migra-
New.immigrants.to.the.United.States.are.quite.
tion.will.continue.to.increase.in.both.absolute.terms.and.
heterogeneous.with.respect.to.both.their.educational.
as.a.percentage.of.the.nation’s.overall.population.growth..
attainment.and.their.English-speaking.skills..As.shown.
In.fact,.it.will.likely.account.for.more.than.half.of.the.
in.Table.4,.among.new.immigrants.age.18.and.older.
nation’s.population.growth.during.that.period.
who.were.living.in.the.United.States.in.2004,.approxi-
From.April.2000.to.July.2005,.the.U.S..popula-
mately.one-third.lacked.a.high.school.diploma.while.
tion.grew.by.about.15.million,.with.net.international.
some.28.percent.held.a.bachelor’s.or.higher.academic.
migration.of.6.3.million.constituting.about.42.percent.
degree..Not.surprisingly,.the.educational.attainment.of.
of.the.growth..The.impact.foreign.immigration.has.
these.new.immigrants.varied.considerably.by.region.
had.on.the.labor.force.and.on.employment.growth.
of.origin..While.62.percent.of.the.immigrants.from.
over.the.same.five.years.has.been.even.greater.because. Mexico.and.Central.America.lacked.a.high.school.di-
(1).a.large.proportion.of.foreign.immigrants.are.of.
ploma,.only.9.percent.of.the.immigrants.from.Europe.
working.age.and.(2).foreign.immigrants,.particularly.
lacked.a.high.school.diploma..A.majority.(56.percent).
men,.participate.at.a.relatively.high.rate.in.the.nation’s.
labor.force..It.is.estimated.that.between.2000.and.
Table 4
2005.new.immigrants.contributed.two-thirds.of.the.
The Distribution of New Immigrants (Age 18 and
nation’s.labor.force.growth.and.nearly.86.percent.of.
older) into the United States, by Educational
the.country’s.net.employment.growth,.including.more.
Attainment, 2000-2004
than.100.percent.of.the.growth.in.jobs.held.by.males..
Clearly,.as.these.numbers.illustrate,.foreign.immigra-
Number
tion.constitutes.an.increasingly.important.factor.in.the.
Educational Attainment
(thousands)
Percent
U.S..economy.(see.Appendix.Table.A8).
1 to 12 years, no diploma
1,671
34
12 years, high school diploma
1,147
23
As.one.might.expect,.new.immigrants.to.the.United.
or GED
States.over.the.2000.to.2004.period.came.from.al-
13 to 15 years
777
15
most.every.locale.around.the.globe..A.large.propor-
tion,.however,.came.from.a.relatively.small.number.of.
Bachelor’s degree
828
17
countries.(see.Appendix.Table.A9)..The.13.countries.
Master’s degree or higher
556
11
sending.100,000.or.more.immigrants.during.this.
Total
4,979
100
period.accounted.for.about.two-thirds.of.all.immi-
Source: 2004 American Community Surveys, public use files. Tabulations by the authors.
47..For.a.recent.review.of.the.effects.of.new.foreign.immigration.on.population,.labor.force,.and.employment.growth.in.the.United.States.
since.2000,.see.Andrew.Sum,.Paul.Harrington,.and.Ishwar.Khatiwada,.New Foreign Immigrants and the United States Labor Market: The
Unprecedented Effects of New Foreign Immigration on the Growth of the Nation’s Labor Force and Its Employed Population, 000-00,.pa-
per.presented.to.the.U.S..Congress,.House.Subcommittee.on.Immigration,.Border.Security.and.Claims,.May.4,.2005.
48..Net.international.migration.represents.the.difference.between.the.flow.of.new.immigrants.into.the.United.States.and.the.flow.of.U.S..residents.
(including.former.immigrants).to.other.countries..The.1980s.estimates.were.derived.from.The Statistical Abstract of the United States, -..
Reference.Press,.Austin,.Texas,.1994..The.1990s.estimates.of.net.international.migration.were.based.on.U.S..Census.Bureau.estimates.for.the.
April.1990.–.July.1999.period;.but.they.were.made.before.the.2000.Census.findings,.which.revealed.a.larger.total.and.immigrant.population.
of.the.new.immigrants.from.Asia.held.a.bachelor’s.or.
native-born.counterparts.on.recent.literacy.and..
higher.degree,.and.46.percent.of.those.from.Europe.
numeracy.assessments..For.example,.on.the.1995.
did.so..However,.only.6.percent.of.the.immigrants.
IALS,.the.average.proficiency.scores.of.U.S..immi-
from.Mexico.and.Central.America.held.a.four-year..
grants.were.typically.more.than.one.standard.devia-
college.degree.or.a.more.advanced.degree..
tion.below.those.of.their.native-born.counterparts.on.
each.of.the.three.literacy.scales.49.The.median.score.
The.self-reported.English-speaking.proficiencies.of.
of.immigrants.on.the.composite.literacy.scale.ranked.
these.new.immigrants.also.varied.quite.widely,.with.
only.at.the.17th.percentile.on.the.U.S..test.distribution.
32.percent.reporting.that.they.either.spoke.English.or.
on.that.same.scale.
spoke.it.well,.while.about.half.claimed.that.they.either.
did.not.speak.English.at.all.(23.percent).or.not.well.
As.noted.at.the.outset,.the.Hispanic.population.is.
(26.percent)..The.English-speaking.skills.of.these.new.
projected.to.grow.substantially.over.the.next.25.years..
immigrants.were.strongly.associated.with.their.for-
By.2030,.its.share.of.the.U.S..population.will.increase.
mal.educational.attainment,.as.shown.in.Table.5..For.
from.14.percent.to.some.20.percent..This.growth.is.
example,.nearly.8.of.10.new.immigrants.lacking.a.high. being.fueled.both.by.higher.birth.rates.and.by.elevated.
school.diploma.reported.that.they.either.could.not.
immigration.rates..According.to.the.findings.of.the.
speak.English.at.all.or.could.not.speak.it.well..Among.
American Community Surveys,.in.2004,.nearly.57.per-
those.with.a.master’s.degree.or.higher,.however,.only.
cent.of.the.16-.to.64-year-old.Hispanic.population.in.
15.percent.indicated.an.inability.to.speak.English.or.
the.United.States.was.foreign-born,.up.from.46.percent.
speak.it.well..
in.1990..Slightly.more.than.half.of.these.immigrant.
Hispanics.lacked.a.high.school.diploma..By.contrast,.
Not.surprisingly,.the.formal.educational.attain-
only.slightly.more.than.one-fourth.of.their.native-born.
ment.of.immigrants.and.their.English-speaking.skills.
counterparts.lacked.a.high.school.diploma..The.high.
were.very.strong.predictors.of.their.scores.on.national.
proportion.of.immigrants.among.the.Hispanic.adult.
literacy.assessments,.including.the.IALS.surveys..
population,.coupled.with.the.limited.schooling.and.
Overall,.with.their.more.limited.years.of.schooling.and. English-speaking.proficiencies.of.many.of.these.immi-
weak.English-speaking.proficiencies,.the.immigrant.
grants,.accounts.for.the.relatively.weak.performance.of.
population.in.the.United.States.scored.well.below.their. Hispanics.on.national.literacy.assessments..
Table 5
Distribution of New Immigrants into the United States, Age 16 and Older, by Self-Reported
English-Speaking Proficiency and by Educational Attainment, 2000-2004
Speaks
Does Not
Does Not
Only Speaks
English Very
Speaks
Speak English
Speak
Educational Attainment
English
Well
English Well
Well
English
1 to 12 years, no diploma
6%
6%
9%
32%
47%
12 years, high school diploma or GED
9
16
19
36
21
13 to 15 years
16
30
24
21
9
Bachelor’s degree
14
36
28
17
5
Master’s degree or higher
11
48
27
12
3
Total
10
22
19
26
23
Source: 2004 American Community Surveys, public use files. Tabulations by the authors.
49.Sum,.Kirsch,.and.Yamamoto,.2004.
0
A Look Toward the Future
The.three.sets.of.forces.we.have.described.—.highly..
The.story.is.similar.for.the.document.and.quantita-
divergent.skill.distributions;.labor-market.restructuring,. tive.scales..On.each.of.the.literacy.scales,.the.average.
including.the.forces.of.globalization;.and.demographic.
score.is.predicted.to.decrease.about.5.percent,.and.the.
trends.—.are.each.powerful.in.their.own.right..But..
variability.of.the.distribution.is.expected.to.increase.by.
as.they.interact.over.time,.their.consequences.can.be..
about.6.to.8.percent.51.One.consequence.of.this.change.
truly.momentous..Let’s.try.to.track.the.trajectory.of..
in.the.distribution.of.skills.is.that.there.will.be.tens.of.
this.perfect.storm..
millions.more.adults.(in.Levels.1.and.2).who.lack.the.
education.and.skills.they.will.need.to.thrive.in.the.new.
Of.course,.predicting.the.future.is.fraught.with.
economy..They.will.be.less.competitive.with.equally.or.
uncertainty..However,.trends.in.globalization.and.basic.
better-skilled.workers.in.lower-wage.economies,.and.
demographic.projections.provide.a.reasonably.solid.
will.not.be.well.prepared.to.compete.for.higher-pay-
foundation.for.prognostication..Although.we.are.less.
ing.jobs.in.our.economy..Obtaining.access.to.higher.
certain.about.future.trends.in.overall.skill.levels,.as.well. earning.opportunities.as.opposed.to.obtaining.jobs.will.
as.the.distribution.of.skills.for.different.segments.of.
become.the.more.formidable.challenge.
the.population,.let’s.assume.that.the.skill.distributions.
within.racial/ethnic.and.age.groups.remain.much.the.
Figure 3
same.as.they.are.now..While.this.may.seem.pessimistic,.
it.is.consistent.with.recent.observations.and.it.will,.at.
The Distribution of Prose Literacy Proficiency from
the.very.least,.provide.us.with.a.plausible.scenario.
the 1992 NALS Compared with the Distribution
Projected for 203052
As.we.have.already.noted,.two.minority.groups.that.
will.see.increases.in.their.proportions.of.the.popula-
1992 NALS
tion.between.now.and.2030.are.Hispanics.and.non-
2030 Projection
Hispanic.Blacks..Both.groups.lag.considerably.behind.
non-Hispanic.Whites.and.Asians.in.their.average.
literacy.and.numeracy.skills..We.can.combine.the.cur-
rent.skill.distributions.by.racial/ethnic.groups.and.age.
groups.with.demographic.projections.to.predict.what.
the.distribution.of.skills.for.the.nation.as.a.whole.will.
look.like.in.2030.
Figure.3.shows.the.distribution.of.prose.literacy.
proficiency.as.it.was.in.1992.and.as.it.is.projected.to.
be.in.2030..Changes.are.shown.for.each.level.in.prose,.
document,.and.quantitative.literacy.in.Figure.4.(also,.
< Level 1
Level 1
Level 2
Level 3
Level 4
Level 5
175
225
275
325
375
425
see.Appendix.Table.A10)..It.is.clear.from.these.graphs.
Prose Proficiency Distribution
that.the.distribution.of.skills.is.expected.to.shift.to.the.
left,.corresponding.to.a.substantial.reduction.in.the.
Source: Data for 1992 from National Adult Literacy Survey, 1992; data for 2030 projected by
the authors. Data are for adults ages 16 to 65.
percentage.of.adults.in.Levels.3.and.4,.with.a.con-
comitant.—.and.dramatic.—.increase.in.the.percent-
age.of.adults.at.or.below.Level.1,.which.jumps.from.
These.literacy.projections.arise.from.the.confluence.
17.percent.to.27.percent..Equally.troubling.is.the.fact.
of.two.of.the.forces:.the.existing.skill.distributions.and.
that.the.distribution.of.prose.proficiency.becomes.less.
the.projected.shift.in.demographics..What.about.the.
peaked.at.Level.3.and.more.dispersed.overall.50.
third.force?.How.will.changing.proficiency.distribu-
50..The.levels.on.each.of.the.literacy.scales.are.defined.as.follows:.Level.1.=.0.to.225;.Level.2.=.226.to.275;.Level.3.=.276.to.325;.Level.4.=.326.
to.375;.Level.5.=.376.and.higher.
51..An.increase.in.variability.corresponds.to.an.increase.in.inequality.in.the.sense.that,.relatively.speaking,.there.are.more.individuals.at.the.
low.and.high.ends.of.the.scale.
52..While.the.graph.focuses.on.prose.literacy,.similar.results.were.found.for.the.document.and.quantitative.literacy.scales..These.data.for.all.
three.scales.are.shown.in.Figure.4.on.the.following.page.and.Table.A10.in.this.report’s.Appendix.
Figure 4
Change in the Distribution of Prose, Document, and Quantitative Literacy, 1992 and 2030 (Projected)
40
1992
2030
35
34
33
30
28
28
28
28
27
26 27
27
26
26
26 25
20
19
19
19
centage
17
17
18
16
Per
14
14
10
5
3 4
4
4
2
0
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Low
High
Low
High
Low
High
Prose Literacy Levels
Document Literacy Levels
Quantitative Literacy Levels
Source: Data for 1992 from National Adult Literacy Survey, 1992; data for 2030 projected by authors. Data are for adults, ages 16 to 65.
tions.interact.with.the.continuous.economic.restruc-
important.to.recognize,.however,.that.individuals.with.
turing.that.is.placing.a.premium.on.higher.literacy.
the.same.level.of.educational.attainment.can.have.very.
and.numeracy.skills?.What.are.the.likely.consequences. different.literacy.skills..Since.earnings.are.influenced.by.
for.the.nation’s.future.economic.and.social.structure?.
both.educational.attainment.and.skills,.increasing.the.
former.without.increasing.the.latter.will.likely.not.result.
A.recent.report.issued.by.the.National.Center.for.
in.the.desired.outcomes..
Public.Policy.and.Higher.Education.cites.U.S..Census.
data.indicating.that,.in.2000,.White.adults.ages.25.to.
Further,.recent.data.from.the.National.Longitudi-
64.were.twice.as.likely.as.African.American.adults.to.
nal.Survey.of.Youth.(NLSY.1979).and.the.National.
have.a.bachelor’s.degree.and.almost.three.times.as.
Education.Longitudinal.Study.of.1988.reveal.that.lit-
likely.as.Hispanic.adults.53.According.to.the.report,.
eracy/numeracy.skills.are.a.critical.factor.in.determin-
these.differences.in.educational.attainment,.coupled.
ing.who.in.the.long.run.earns.a.bachelor’s.or.higher.
with.substantial.increases.in.the.proportions.of.African. degree..Analyses.of.these.data.by.one.of.the.authors.of.
American.and.Hispanic.adults.comprising.the.working-
this.report.reveals.that.almost.76.percent.of.36-.to.43-
age.population,.could.result.in.a.less-educated.workforce. year-olds.in.the.10th.(top).decile.of.the.basic.academic.
over.the.next.20.years..One.notable.consequence.would.
skills.distribution.from.the.NLSY.1979.cohort.earned.
be.a.decline.in.personal.income.per.capita.across.the.
a.bachelor’s.or.higher.degree,.compared.with.only.15.
United.States.in.the.absence.of.strengthened.investments. percent.of.those.in.the.6th.decile.and.only.2.percent.
in.the.schooling.of.these.groups.54.
of.those.in.the.lowest.decile.55.This.strong.relation-
ship.between.academic.skills.and.ultimate.educational.
That.report.calls.on.the.states.to.do.a.better.job.of.
attainment.holds.regardless.of.gender.or.racial/eth-
improving.the.educational.levels.of.all.residents..It.is.
nic.background.(see.Appendix.Table.A11).56.Formal.
53..The.National.Center.for.Public.Policy.and.Higher.Education,.Income of U.S. Workforce Projected to Decline if Education Doesn’t Improve,.
Policy.Alert,.November.2005.
54..That.is,.crudely.speaking,.as.better-educated.White.non-Hispanics.leave.the.workforce.over.the.next.two.decades,.increasingly.their.places.
will.be.filled.by.workers.from.minority.groups.with.lower.levels.of.education..
55..Analyses.of.the.National.Longitudinal.Survey.of.Youth.1979.cohort..Data.reported.here.and.shown.in.Appendix.Table.A11.are.from.the.
2002.survey.round.
56..It.is.interesting.to.note.that,.at.the.lower.deciles,.the.likelihood.of.earning.a.bachelor’s.or.higher.degree.favors.women.over.men,.and..
minority.groups.over.Whites..That.is,.except.at.the.highest.decile,.Blacks.are.more.likely.to.obtain.a.college.degree.than.White.non-.
Hispanics.within.the.same.decile.(i.e.,.having.similar.levels.of.cognitive.skills).
schooling.and.literacy/numeracy.skills.clearly.are.be-
among.segments.of.our.population,.especially.among.
coming.the.great.sorter.in.American.society..As.former. key.racial/ethnic.groups.
President.Clinton.noted.in.a.1995.address.to.a.national.
Trends.in.family.formation.in.the.United.States.also.
convention.of.newspaper.editors:.“....the.technology.
play.a.role.in.rising.inequality.in.education.and.family.
revolution.and.the.global.economy..These.are.dividing.
income..Findings.from.the.00 American Community
opportunity.at.home.and.abroad..The.middle.class.is.
Surveys,.shown.in.Figure.5,.indicate.that.at.least.44.
splitting.apart,.and.the.fault.line.is.education.”57
percent.of.all.births.to.women.under.age.30.were.out.of.
Indeed,.differences.in.educational.levels.and.initial.
wedlock..Among.Black.mothers.in.this.age.group,.this.
skills.translate.into.gaps.in.annual.earnings.that,.over.
proportion.reaches.77.percent..The.vast.majority.of.these.
the.past.two.decades,.have.been.widening..The.lifetime. out-of-wedlock.births.have.taken.place.among.women.
earnings.differences.between.adults.with.a.bachelor’s.
with.either.no.high.school.diploma.or.with.no.postsec-
degree.and.those.with.only.a.high.school.diploma.
ondary.education.(see.Appendix.Tables.A16.and.A17)..
widened.considerably.between.1979.and.2004.(see.
This.trend.in.single-parent.families,.if.it.continues,.will.
Appendix.Table.A12)..As.young.adults.age,.the.relative.
lead.to.ever-greater.family.income.inequality,.in.view.of.
size.of.the.gap.in.the.mean.annual.earnings.between.
the.low.earnings.potential.of.many.of.these.mothers...
high.school.and.college.graduates.grows.considerably..
Moreover,.children.raised.in.low-income,.single-
Analysis.of.longitudinal.data.from.the.NLSY.1979.
parent.families.often.suffer.from.a.number.of.critical.
survey.reveals.that.the.mean.annual.earnings.of.23-.to.
cognitive,.health,.and.nutritional.deficits.that.are.likely.
30-year-old.adults.with.16.or.more.years.of.school-
to.limit.their.future.academic.achievement.and.edu-
ing.in.1988.were.58.percent.higher.than.those.of.high.
cational.attainment..To.return.to.our.metaphor,.the.
school.graduates..Nine.years.later,.the.gap.in.mean.
result.will.be.an.increase.in.the.number.and.relative.
earnings.between.these.two.groups.had.widened.to.
proportion.of.small,.poorly.equipped.boats.in.our.fleet.
81.percent.—.and.would.increase.to.101.percent.by.
that.will.find.it.difficult.to.thrive.—.let.alone.survive.
2001..By.2001,.those.adults.(now.36.to.43.years.of.age). —.in.the.turbulent.seas.ahead.59
with.16.or.more.years.of.schooling.had.mean.earnings.
twice.as.high.as.those.of.their.peers.with.only.a.high.
school.diploma..Perhaps.more.notable.is.the.fact.that.
Figure 5
the.premiums.for.education.are.substantially.greater.
Percentage of Out-of-Wedlock Births to Women
for.individuals.with.higher.scores.on.a.measure.of.cog-
Under Age 30, by Racial/Ethnic Group, 2003-2004
nitive.skills.than.for.individuals.with.lower.scores.58.
All
44
These.and.other.data.reveal.that.both.educational.
Asian
16
attainment.and.skills.are.strongly.and.positively.as-
Black
77
sociated.with.annual.earnings.and.access.to.the.more.
Hispanic
highly.skilled.professional.and.management.positions.
46
in.the.U.S..labor.market.(for.additional.data,.see.Ap-
Mixed Race
60
pendix.Table.A14)..Thus,.while.reducing.inequalities.in.
White
34
education.and.skills.will.not.solve.all.the.challenges..
0
20
40
60
80
100
associated.with.existing.economic.inequalities,.without.
Percentage
narrowing.the.overall.skills.and.education.gaps.there.is.
little.chance.of.improving.the.economic.opportunities.
Source: 2004 American Community Surveys, public use files.
Tabulations by Center for Labor Market Studies.
Note: Out-of-wedlock births are modestly underreported on the ACS surveys.
57..The Boston Globe,.Saturday,.April.5,.1995,.p..1.
58..For.example,.for.individuals.who.scored.near.the.bottom.of.the.Armed.Forces.Qualification.Test.(AFQT).distribution,.the.premium.for.a.
college.degree.over.a.high.school.diploma.was.14.percent.in.1998,.rose.to.18.percent.in.1997.and.to.29.percent.in.2001..By.comparison,.
for.individuals.who.scored.near.the.top.of.the.AFQT.distribution,.the.premium.was.69.percent.in.1988.and.122.percent.in.2001..The.data.
can.be.found.in.Appendix.Table.13..
59..Data.reported.here.are.from.the.00 American Community Surveys..They.were.tabulated.by.one.of.the.authors.of.this.report.and.are.
shown.in.Appendix.Tables.A15,.A16,.and.A17.
Implications
Continuous.industrial.restructuring,.technologi-
important.factor.in.achieving.continuous.economic.
cal.changes.in.the.workplace,.as.well.as.accelerated.
growth.and.in.reducing.the.current.inequalities.in.
outsourcing.of.services.that.were.previously.insulated.
earnings.and.wealth.overall.and.among.recognizable.
from.the.forces.of.international.competition.mean.that.
subgroups..Unfortunately,.current.skill.gaps.coupled.
more.and.more.types.of.jobs,.including.professional.
with.demographic.trends.portend.diminishing.human.
and.management-support.jobs,.will.be.up.for.grabs.in.
capital.among.the.future.prime-working-age.popula-
a.global.marketplace..To.make.matters.worse,.less-
tion.of.the.United.States.61
educated.U.S.-born.workers.also.face.increased.com-
Accordingly,.we.must.set.a.national.goal.of.equip-
petition.from.newly.arrived.immigrants.with.limited.
ping.most.(if.not.nearly.all).adults.with.the.ability.to.
schooling.and.skills..To.prosper.in.this.new.labor-mar-
perform.work.that.is.highly.valued.in.the.marketplace.
ket.environment,.individuals.must.possess.the.skills,.
and.the.capability.to.periodically.renew.themselves.as.
knowledge,.flexibility,.and.credentials.that.will.allow.
the.nature.of.that.work.evolves..In.fact,.with.secure,.
them.to.compete.successfully..
long-term.employment.becoming.rarer.and.society.
If.we.continue.on.our.current.course,.however,.it.is.
becoming.more.complex,.there.is.a.growing.need.for.
likely.that.our.nation.will.gradually.lose.ground.in..
all.individuals.to.become.better.educated.and.more.
relation.to.other.countries,.becoming.more.divided.
skilled..Individuals.must.have.a.broad.set.of.literacy.
both.socially.and.economically.in.the.process..In.a.
and.numeracy.skills.to.successfully.manage.the.vari-
recent.Wall Street Journal.editorial,.former.Treasury.
ous.aspects.of.their.lives:.from.planning.their.careers,.
Secretary.Robert.Rubin.argued.for.changing.our.eco-
to.nurturing.and.guiding.their.children,.to.navigat-
nomic.strategies.—.in.part.to.achieve.a.prosperity.that.
ing.the.health-care.system,.to.taking.more.personal.
is.more.widely.shared,.stating:.“Broad.participation.in.
responsibility.for.their.financial.future.
economic.well-being.and.growth.is.critical,.both.as.a.fun-
Why.is.the.current.distribution.of.educational.at-
damental.value.and.to.realize.our.economic.potential.”60.
tainment.and.academic.achievement.so.problematic.
If.we.are.unable.to.substantially.close.the.existing.
—.quite.apart.from.the.large.and.persistent.racial/eth-
skill.gaps.among.racial/ethnic.groups.and.substantially. nic.gaps?.Early.dropouts,.as.well.as.many.holders.of.
boost.the.literacy.levels.of.the.population.as.a.whole,.
high.school.diplomas.or.GEDs,.typically.lack.strong.
demographic.forces.will.result.in.a.U.S..population.in.
foundational.skills.and.the.key.noncognitive.skills.
2030.with.tens.of.millions.of.adults.unable.to.meet.the. that.would.enable.them.to.benefit.from.learning.and.
requirements.of.the.new.economy..Moreover,.a.sub-
training.experiences.later.on.in.life..In.fact,.the.lack.of.
stantial.proportion.of.those.adults.will.be.members.of.
both.cognitive.and.the.so-called.“soft.skills”.(e.g.,.per-
disadvantaged.minority.groups.who.will.likely.con-
sistence,.teamwork.skills,.and.communication.skills).
sider.themselves.outside.the.economic.mainstream..
makes.it.more.difficult.for.them.to.obtain.and.retain.
Clearly,.this.is.not.the.preferable.direction.for.the..
employment,.especially.for.those.jobs.offering.the..
nation.to.be.moving..
potential.for.advancement..The.employment.they.do.
find.is.unlikely.to.offer.them.opportunities.to.improve.
Of.course,.a.nation’s.economic.competitiveness.is.
their.skills.either.on.the.job.or.in.formal.training..
not.solely.determined.by.the.efficiency.and.effective-
programs.funded.by.the.employer..
ness.of.its.education.system,.or.the.literacy.skills.of.its.
workforce..Many.other.factors,.including.the.health.
In.contrast,.individuals.at.the.high.end.of.the.skill.
and.transparency.of.its.financial.system,.the.strength.
distribution.are.much.more.likely.to.find.satisfactory.
of.its.infrastructure,.its.regulatory.and.rule-of-law.
employment.as.well.as.opportunities.to.enhance.or.
environment,.natural.resources,.entrepreneurship,.
broaden.their.skills.over.their.working.lives..In.the.
economic.flexibility,.monetary.and.fiscal.policies,.
United.States,.employer.investment.in.the.education.
and.culture.all.play.key.roles..In.the.long.run,.how-
and.training.of.their.workforce.is.strongly.linked.to.
ever,.a.broadly.educated.and.skilled.workforce.is.an.
60.Robert.E..Rubin,.“We.Must.Change.Policy.Direction,”.The Wall Street Journal,.January.24,.2006,.p..A-20.
61.The.National.Center.for.Public.Policy.and.Higher.Education,.2005;.Aspen.Institute,.1998.
the.educational.attainment.and.literacy.proficiencies.
While.the.data.from.the.large-scale.national.and.
workers.bring.with.them.to.the.job.62.Because.they.
international.surveys.show.that.literacy.proficiencies.
have.an.adequate.foundation,.workers.who.possess.
appear.to.have.a.significant.impact.on.labor-market.
these.proficiencies.are.able.to.take.full.advantage.of.
outcomes.over.and.above.years.of.schooling,.they.do.
those.opportunities..
not.address.an.important.macroeconomic.question:.
Do.these.proficiencies.contribute.to.the.overall.GDP.
These.different.dynamics.at.the.two.ends.of.the.
and.productivity.growth.of.a.country?.A.recent.study.
skills.continuum.have.led.to.a.widening.gap.between.
by.a.group.of.economists.using.IALS.data.from.14.
the.haves.and.have-nots..Other.factors.also.contrib-
OECD.countries.found.that.not.only.do.direct.mea-
ute.to.this.dynamic..Globalization.and.the.diffusion.
sures.of.literacy.have.a.significant.and.positive.effect.
of.information.and.communication.technologies,.as.
on.levels.of.per.capita.GDP.and.productivity,.they.do.
well.as.recent.trade.agreements,.have.given.employers.
a.better.job.than.measures.of.educational.attainment.in.
and.corporations.more.leeway.in.reducing.their.com-
predicting.economic.growth..The.study.found.that.human.
mitments.to.workers,.because.they.are.less.bound.by.
capital.as.measured.in.these.surveys.is.important.for.
national.borders.63.This.means.that.a.great.many.indi-
societal.as.well.as.for.individual.growth.64.
viduals.and.families.are.just.one.crisis.away.from.di-
saster..For.example,.in.New.Orleans,.those.with.more.
As.we.argue.in.this.report,.the.growth.of.human.
resources.were.better.able.to.weather.the.onslaught.of.
capital.and.how.that.growth.is.distributed.are.both.
Hurricane.Katrina.
important.for.America..Human.capital.is.important,.
however,.not.just.because.of.the.economic.implica-
It.is.not.likely.we.will.grow.our.way.out.of.this.
tions..A.recent.book.by.Benjamin.Friedman.also.links.
problem.any.time.soon..Evidence.from.NAEP.has.
our.economic.well-being.to.the.very.fabric.of.our.
shown.little.improvement.in.reading.and.only.mod-
society.65.Friedman.argues.that.economic.growth.and.
est.improvement.in.math.achievement.of.the.nation’s.
stability.are.tied.to.the.quality.of.our.democracy..He.
13-.and.17-year-olds.over.the.past.20.years,.and.almost. shows.that.the.history.of.the.20th.century.is.replete.
no.change.in.the.gaps.between.White.and.minority.
with.examples.in.which.democratic.institutions.suf-
students..What.if.we.are.unsuccessful.in.substan-
fered.during.periods.of.economic.stagnation.and.
tially.improving.formal.educational.attainment.and.
downturns..Friedman.reasons.that.individuals.and.
academic.achievement.over.the.course.of.the.next.20.
societies.are.more.trusting,.more.inclusive,.and.more.
years?.When.we.combine.current.skill.distributions.
open.to.change.when.they.see.their.futures.and.the.
of.the.adult.population.with.current.and.projected.
futures.of.their.children.as.bright.and.secure..He.con-
demographic.trends.to.obtain.a.plausible.projection.of. cludes.that.“Economic.growth.is.not.merely.the.enabler.
skill.distributions.in.the.future,.the.result.is.a.nation.
of.higher.consumption;.it.is.in.many.ways.the.well-
characterized.by.lower.average.skills.and.increased.
spring.from.which.democracy.and.civil.society.flow.”
variation..Today,.skill.distributions.are.mirrored.by.
substantial.variations.in.employment.rates,.access.to.
America’s.perfect.storm.is.greater.than.the.simple.
skilled.jobs,.incarceration.rates,.earnings,.incomes,.
sum.of.the.three.sets.of.forces.that.are.discussed.in.
wealth,.health.status,.degree.of.civic.participation,.and. this.report..The.confluence.of.those.forces.can.create.a.
so.on..These.gaps.prevail.across.subgroups.including.
powerful.dynamic.that.continually.feeds.the.storm.—.
gender,.racial/ethnic,.and.whether.or.not.individuals.
putting.at.risk.not.only.greater.numbers.of.individuals.
were.born.in.the.United.States..
but.the.very.fabric.of.our.nation..A.future.reflecting.
62.Evidence.on.this.issue.is.based.on.the.IALS.data;.see.Sum,.Kirsch,.and.Yamamoto,.2004.
63.Jeff.Faux,.The Global Class War,.Hoboken,.NJ:.John.Wiley.&.Sons,.2006.
64..Serge.Coulombe,.Jean-Francois.Trembly,.and.Sylvie.Marchand,.Literacy Scores, Human Capital, and Growth Across Fourteen OECD Coun-
tries,.Ottawa:.Statistics.Canada,.June.2004.
65..See.Benjamin.M..Friedman,.“Meltdown:.A.Case.Study,”.Atlantic Monthly,.July/August.2005..For.a.more.comprehensive.discussion,.see.
Benjamin.M..Friedman,.The Moral Consequences of Economic Growth,.New.York:.Knopf,.2005.
the.projected.changes.in.demographics.and.skill.dis-
tributions.is.one.in.which.there.would.be.fundamental.
changes.in.existing.economic.and.social.structures..
The.implicit.promise.of.every.individual.having.a.fight-
ing.chance.to.improve.his.or.her.station.in.life.would.
be.replaced.by.the.reality.of.what.columnist.David.
Brooks.has.called.an.“inherited.meritocracy.”.66.
There.are.those.in.business.and.government.who.
are.not.troubled.by.the.recent.concentration.of.wealth.
and.power.that.contrasts.with.the.more.broadly.
shared.prosperity.America.experienced.in.the.decades.
following.World.War.II..While.there.is.little.doubt.that.
America.will.continue.to.grow.and.prosper,.the.chal-
lenge.we.face,.given.the.forces.described.in.this.report,.
is.to.decide.whether.we.allow.our.country’s.popula-
tions.to.continue.to.grow.apart.or,.as.a.nation,.we.will.
invest.in.efforts.to.help.us.grow.together..The.authors.
of.this.report.believe.the.latter.course.is.better.for.
America.—.and.that.the.time.to.act.is.now.
.
.
66.David.Brooks,.“Psst!.Human.Capital,”.The New York Times,.November.13,.2005,.p..A12.
Appendix Tables
Table A1
Table A2
Average Scores of U.S. Adults 16 to 65 Years of
Trends in Average NAEP Scores for 13- and
Age and Percentages in Levels 3 and Higher on
17-Year-Old Students in Reading and Math
the Literacy and Numeracy Scales
NAEP Assessment Years
NALS
ALLS
1984
1990
1996
2004
Mean Percent in
Mean
Percent in
Reading
Score
Level 3+
Score
Level 3+
Age 13
257
257
258
259
Prose
280
58
269
47
Age 17
289*
290
288
285
Document
276
54
270
48
1986
1992
1996
2004
Quantitative
279
57
Math
Numeracy
261
42
Age 13
269*
273*
274*
281
Age 17
302*
307
307
307
Source: National Adult Literacy Survey 1992 and Adult Literacy and Life Skills Survey 2005.
Tabulations by the authors.
Source: Marianne Perie, Rebecca Moran, and Anthony D. Lutkus, NAEP 2004 Trends in
Academic Progress: Three Decades of Student Performance in Reading and Mathematics
(NCES 2005-464), U.S. Department of Education, Institute of Education Sciences, National
Center for Education Statistics, Washington, D.C., July 2005.
*Significantly different from 2004.
Table A3
Distribution and Average Proficiency of Adults on the ALLS Prose Scale,
by Race/Ethnicity and Origin of Birth
Level 1
Level 2
Level 3
Levels 4/5
Mean Prose Score
Total Adult Population
20
32
35
13
269
White (total)
12
30
41
17
282
Native
11
30
42
17
284
Non-Native
27
28
34
11
263
Black (total)
33
44
20
3
242
Native
34
43
20
3
242
Non-Native
20
60
17
3
249
Hispanic (total)
49
33
14
3
225
Native
30
38
27
5
252
Non-Native
67
27
5
1
202
Asian (total)
28
33
30
9
256
Native
5
21
52
22
297
Non-Native
29
34
30
7
252
Source: Adult Literacy and Life Skills (ALLS) Survey 2005. Tabulations by the authors.
Table A4
Table A5
Trends in Average White-Black and White-Hispanic Changes in the Number of Employed Persons
Differences Among 13- and 17-Year-Old Students
(Age 16+), Total and by Major Occupational Group,
in Reading and Mathematics
1984-2000: United States (Annual Averages,
Numbers in 1,000s)
1984
1994
2004
Reading
Occupational
Absolute Percent
Group
1984
2000(1)
Change
Change
White-Black
All 16+
105,005 135,208
30,203
28.8
Age 13
26
31*
22
Professional
13,286
21,113
7,827
58.9
Age 17
32
30
29
Managers, execu-
11,571
19,774
8,203
70.9
White-Hispanic
tives, and manage-
Age 13
23
30*
24
ment support
Age 17
27
33
29
Technical
3,172
4,385
1,213
38.2
1986
1996
2004
Sales
Math
• High-level
6,685
9,452
2,767
41.4
White-Black
• Lower-level(2)
5,897
6,889
992
16.8
Age 13
24
29
27
Administrative
16,722
18,717
1,995
11.5
support
Age 17
29
27
28
Service workers
14,151
18,278
4,127
29.2
White-Hispanic
Farm, forestry,
3,600
3,399
-201
-5.6
Age 13
19
25
23
fishing
Age 17
24
21
24
Precision produc-
13,057
14,882
1,825
14.0
tion, craft/installa-
Source: Marianne Perie, Rebecca Moran, and Anthony D. Lutkus, NAEP 2004 Trends in
tion, repair
Academic Progress: Three Decades of Student Performance in Reading and Mathematics
(NCES 2005-464), U.S. Department of Education, Institute of Education Sciences, National
Production work-
12,451
12,876
425
3.4
Center for Education Statistics, Washington, D.C., July 2005.
ers and transport
* Significantly different from 2004.
operatives
Laborers, helpers,
4,413
5,443
1,030
23.2
cleaners
Source: U.S. Bureau of Labor Statistics, Employment and Earnings January 1985 and
Employment and Earnings January 2001.
(1) The occupational employment estimates for calendar year 2000 are based on the popu-
lation weights from the 1990 Census. These employment estimates were later revised by
Bureau of Labor Statistics to reflect new population weights from the 2000 Census, but they
did not revise the occupational employment estimates under this coding system.
(2) Lower-level sales workers include sales clerks, cashiers, counter clerks, door-to-door
salespersons, and newspaper vendors.
Table A6
Table A7
Estimated Changes in Civilian Employment in Se-
Projected Changes in Occupational Employment
lected Major Occupational Groups, United States:
in the United States, in Selected Occupational
2000-2005 (Numbers in 1,000s, Annual Averages)
Groups, 2004-2014 (in 1,000s, Annual Averages)
Occupational
Absolute Percent
Occupational
Absolute Percent
Group
2000
2005
Change
Change
Group
2004
2014
Change
Change
All
137,101 142,127
5,026
3.7
All
145,612 164,540
18,928
13.0
Management
14,348
14,707
359
2.5
Management,
14,987
17,142
2,155
14.4
occupations
business, and
Business and fi-
5,277
5,771
493
9.4
financial
nancial operations
occupations
Professional and
26,740
28,835
2,096
7.8
Professional and
28,544
34,590
6,064
21.2
technical, all
technical, all
• Architecture and
2,990
2,794
-196
-6.6
High-level sales
5,325
5,818
466
8.7
engineering
Retail Sales
8,445
9,382
937
11.1
• Computer and
3,318
3,245
-73
-2.2
Service
27,673
32,930
5,257
19.0
mathematical
occupations
science
Office and admin-
23,907
25,287
1,380
5.8
• Education, train-
7,239
8,129
891
12.3
istrative support
ing, and library
Construction
7,738
8,669
931
12.0
• Health care
5,909
6,759
850
14.4
and extraction
practitioner and
Installation,
5,747
6,404
657
11.5
technical
maintenance,
Management,
46,365
49,313
2,948
6.4
and repair
professional,
Production
10,562
10,483
- 79
- .7
and technical
combined
Transportation and
10,098
11,214
1,116
11.1
material moving
Source: 2000 and 2005 Current Population Surveys, public use files.
Tabulations by the authors.
Source: Daniel Hecker, “Occupational Employment Projections to 2014,” Monthly Labor
Review, November 2005.
Table A8
The Contributions of Net International Migration to U.S. Population Growth,
Selected Time Periods, 2000 to 2005
Net Immigration as a
Net International
Percent of Population
Time Period
Population Growth
Migration
Change
April 2000-July 2005 (actual)
14,985,502
6,333,941
42
2005-2010, projected (1)
13,428,447
6,727,438
50
2010-2015, projected (2)
13,430,206
7,124,863
53
Source: U.S. Census Bureau, www.census.gov.
Note: (1) Sum of net international migration is for the 2006-2010 period only, since new immigrants in 2005 are included in the population count for that year. (2) Sum of net international
migration is for the 2011-2015 period only, since new immigrants in 2010 are included in the population count for that year.
Table A9
Table A11
Listing of Countries Sending 100,000 or
Percentage of 36- to 43-Year-Olds Who Have 16 or
More Immigrants to the United States
More Years of Schooling, by Gender, Race/Ethnicity,
Between 2000 and 2004 (All Ages)
and Decile of the AFQT Distribution (2002)
Country
Number of Immigrants
Decile
All
Men
Women White Black Hispanic
Mexico
2,170,794
Total
26.5
25.8
27.2
30.3
14.9
14.6
India
345,063
First
1.6
1.7
1.4
0.0
2.6
0.8
China
235,115
decile
Philippines
202,314
Second 2.2
1.7
2.7
0.7
4.3
2.6
decile
Puerto Rico*
185,364
Third
4.3
4.0
4.7
2.7
8.3
5.3
El Salvador
160,712
decile
Guatemala
129,131
Fourth 8.8
6.4
11.0
6.3
15.1
12.9
Brazil
120,223
decile
Colombia
112,795
Fifth
8.8
9.8
8.1
7.0
18.4
10.0
Canada
109,962
decile
Cuba
109,939
Sixth
15.4
9.0
20.9
13.6
26.5
19.9
decile
Japan
109,898
Seventh 21.7
18.2
24.8
20.8
36.2
22.2
Dominican Republic
107,283
decile
Source: 2004 American Community Surveys, public use files.
Tabulations by the authors.
Eighth 32.8
31.5
33.9
33.1
44.1
33.9
decile
* The authors recognize that Puerto Rico is a U.S. territory with com-
monwealth status, but the island does have a language and culture of
Ninth
51.4
45.1
58.1
50.4
73.6
62.5
its own. Data show that the island’s residents who come to the mainland
experience some of the same challenges as immigrants who come to the
decile
United States from other countries. In addition, the United States does
not include residents of Puerto Rico in its official population counts of
Tenth
76.2
75.8
76.7
76.5
72.1
79.5
labor force numbers. A resident of Puerto Rico who migrates to the
decile
United States adds to the nation’s population similar to that of an
immigrant from another country.
Source: National Longitudinal Survey of Youth. Tabulations by the authors.
Table A10
Percentage of Adults Ages 16 to 65 in Each Skill Level, 1992 NALS
and Projections for 2030
1992 NALS Data
Projected Distribution 2030
Prose
Document
Quant
Prose
Document
Quant
Level 1
17
19
18
27
26
26
Level 2
26
28
26
27
27
25
Level 3
35
34
33
28
28
28
Level 4
19
17
19
14
14
16
Level 5
3
2
4
4
4
5
Mean (sd)
280 (63)
275 (63)
279 (67)
266 (68)
262 (68)
266 (71)
Source: National Adult Literacy Survey data and authors’ projections.
0
Table A12
Mean Lifetime Earnings of 18- to 64-Year-Old Males in the United States, by Educational Attainment,
(in Constant 2005 CPI-U Dollars)
Educational Attainment
(A)
(B)
(C)
(D)
1979
2004
Absolute Change
Percent Change
No high school diploma or GED
$1,577,466
$960,365
-$617,101
-39.1
H.S. diploma/GED, no completed years of college
$1,814,595
$1,380,636
-$433,957
-23.9
1-3 years of college, including Associate’s degree
$2,007,712
$1,738,411
-$269,301
-13.4
Bachelor’s degree
$2,736,270
$2,702,793
-$33,478
-1.2
Master’s or higher degree
$3,039,355
$3,506,939
$467,584
15.2
All
$1,879,696
$1,902,375
$22,679
1.2
Source: 1980 Census of Population and Housing, PUMS files, tabulations by the authors; and 2004 American Community Surveys, public use files, tabulations by the authors.
Table A13
Relative Mean Annual Earnings of U.S. Adults* in Selected Educational Attainment and AFQT Decile
Groups, 1988, 1997, 2001
Year
HS Grad to Some College B.A.+ to HS B.A.+ Avg Skills to
B.A.+ Top Skills to
B.A.+ Low Skills to
HS Dropout
to HS Grad
Grad
HS Grad Avg Skills HS Grad. Top Skills
HS Grad Low Skills
1988
1.38
1.20
1.58
1.01
1.69
1.14
1997
1.31
1.14
1.81
1.35
1.68
1.18
2001
1.35
1.17
2.01
1.47
2.22
1.29
Sources: National Longitudinal Survey of Youth (NLSY 1979), 1989, 1998, 2002 survey records. Tabulations by one of the authors.
Note: Average skills defined as AFQT in 5th to 6th decile; top skills as AFQT in 9th to 10th decile; and low skills as AFQT in 2nd to 3rd decile.
* The sample of adults were 23- to 30-years-old in 1988 and 36- to 43-years-old in 2001.
Table A14
Mean Weekly Earnings of U.S. Full-Time Employed Adults (Age 16 and Older) by Prose Proficiency Level
and Educational Attainment
Educational Attainment
Level 1
Level 2
Level 3
Level 4
Level 5
Overall
0 to 8 years
$298
$351
---
---
---
$313
9 to 12 years
$364
$357
$414
---
---
$373
GED
$333
$364
$489
$529
---
$431
High school diploma
$369
$420
$436
$493
---
$430
Some postsecondary
$367
$455
$491
$597
---
$509
Two year degree
$386
$504
$578
$610
$630
$574
Four year degree or higher
$586
$677
$739
$866
$993
$830
Source: NALS Survey, 1992.
Note: --- Indicates that the number of cases is too small to provide reliable estimates.
Table A15
Table A17
Total Births to Women Under Age 30, and
Percentage of Births to Women Under Age 30
Number and Percentage That Were Out of
That Were Out of Wedlock, by Educational
Wedlock, by Race/Ethnicity of Mother,
Attainment and Race/Ethnicity of the Mother,
United States: 2003-2004
United States: 2003-2004
Out-of-
Percent
Educational
Black
White
Hispanic
Total
Wedlock
Out of
Attainment
Mothers
Mothers
Mothers
Group
Births
Births*
Wedlock
<12 or 12, no
89.9
60.7
50.0
All
2,298,318
1,011,187
44.0
diploma
Asian
77,173
12,586
16.3
12 years,
80.0
42.1
48.6
Black
381,738
291,846
76.5
diploma or GED
Hispanic
525,799
242,622
46.1
13 to 15 years
69.1
28.0
38.6
Mixed Race
335,517
19,972
60.0
Bachelor’s degree
41.0
8.0
28.0
White, not Hispanic
1,242,260
420,467
33.8
Master’s degree
11.3
3.3
15.3
or higher
Sour
ce: 2004 American Community Surveys, public use files. Tabulations by the authors.
*Out-of-wedlock births are modestly underreported on the ACS surveys.
Source: 2004 American Community Surveys. Tabulations by the authors.
Table A16
Number and Percentage of Births to Women Under
Age 30 That Were Out of Wedlock, by Educational
Attainment of the Mother, United States: 2003-2004
Out-of-
Percent
Educational
Total
Wedlock
Out of
Attainment
Births
Births*
Wedlock
<12 or 12, no
563,288
350,847
62.2
diploma
12 years,
743,151
381,060
51.3
diploma or GED
13 to 15 Years
666,328
242,920
36.7
Bachelor’s degree
268,238
33,669
12.6
Master’s degree
62,313
2,691
4.3
or higher
All
2,298,318
1,011,077
44.0
Source: 2004 American Community Surveys, public use files. Tabulations by the authors
*Out-of-wedlock births are modestly underreported on the ACS surveys.
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