Study: Education failing America

Poor productivity, not a lack of money, is one of the biggest problems in American education.

And this is one area where education reformers could learn a thing or two from business.

Education is the least productive sector of the U.S. economy, according to a new Hudson Institute study by Lewis J. Perelman. For example, Perelman found labor costs in K-12 education account for 93% of school district costs, compared with 54% for the average U.S. business.

Perelman also found that during the 1980s annual spending in our 16,000 school districts on K-12 education jumped from $160 billion to $200 billion. But student achievement, according to tests, has barely improved.

That's not the only bad news. Our education system, says Perelman, seems to be out of touch with the rest of U.S. society. The education system is simply not meeting our needs anymore.

"The average high-school dropout in 1940 was better prepared for the job market than a high-school graduate is today," he says.

As the baby boom generation matures, the U.S. faces a growing labor shortage. But we also face a growing "skills gap."

"We can't afford to throw away a large percent of our workforce because they aren't prepared for the labor market," he says.

Perelman's answer to the crisis in education is to make education act more like business.

First, he would force education to respond to the needs of a market.

All learners, whether K-12 students or adults, should be given a choice of where they go to school, he says. This would force schools to respond to their needs. Competition for students would motivate schools to build in quality control systems, like industry has.

Second, Perelman would increase investments in technology to improve productivity in our schools. Educators spend up to 1000 times less on R&D and acquiring new technology than most companies do.

Computer-assisted instruction and so-called distance learning, using modern telecommunications technology can increase choices for students, especially in rural or inner-city areas. In the information age, teachers are not so much experts in a subject as they are facilitators who can teach students how to learn on their own.

Education utilities, which provides access to large data bases, and extension services to improve teaching skills are other examples.

"We can have as many different schools as we have cable television channels," Perelman says. "America is not shortchanging education. Education is shortchanging America."

Expanding choices and applying technology are fundamental requirements for improving education.

Throwing more money at the existing system and existing strategies that are not working will result only in higher spending, not higher achievement. Calls for more spending are the easy way out.

What we need is fundamental change in the way we do things.