Change Through Education

By Ray Marshall

Vol. 11, No. 1, 1989, pp. 1-6

EDITOR'S NOTE: "Change Through Education" was the theme of the 1988 Annual Meeting of the Southern Regional Council, held in November in Atlanta. The keynote speaker for the event was Dr. Ray Marshall, president of the Southern Labor Institute, vice president of the Southern Regional Council, chairman of the National Action Council for Minority Achievement, professor of economics and public affairs at the LBJ School of Public Affairs at the University of Texas, and former U.S. Secretary of Labor. His edited remarks appear below.

QUALITY EDUCATION FOR ALL OF OUR people is the single most important problem that the country faces. We have great difficulty getting quality education, but if we don't it is going to cause us a great deal of trouble, not only the trouble in individual lives which we are already having but also a lot of trouble for the country, a continuation of our decline. If I had to bet, I would bet that that is what we are going to do.

Quality education is especially critical today because fundamental shifts have occurred in the economy in which most U.S. workers earn their livings.

We are losing our competitiveness in the international arena. It is in the high techs as well as the smoke stacks. Our real wages were lower in 1988 than they were in 1973. Our income distribution is more unequal than at any time since we have been keeping numbers. That is a very serious matter.

One of the things that we did in this country and in other industrialized countries after the period of industrialization was to change the income distribution. Preindustrial income distribution was like a pyramid-a few people at the top, most people at the bottom. Industriali-


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zation and democracy made income distribution more like a diamond than a pyramid-most people in the middle.

That strengthens democracy.

The economic system that produced this change was able to use the abundant natural resources of this country within a mass production system that was based on one principle economies of scale. We were able to improve our standard of living easily because of economies of scale which made possible by a large internal American market using our abundant resources.

When the system broke down during the 1930s, we coupled it with Keynesian economics to keep it going. The big problem in the 1930s was that we knew how to produce a lot more stuff than we could sell. The basic idea behind the New Deal was to put some money in people's pockets so that they could buy the output of all that industry, making possible a higher standard of living. Then we coupled that with unionization of the plants where you were getting this economy of scale and the right of people to organize and bargain collectively, causing the non-union industries to treat their people better than they would have otherwise. A lot of working people got middle-class living standards for the first time. Therefore we got this diamond-shaped income distribution.

During the 1970s and 1980s, income distribution is becoming more like an hourglass. We are polarizing, the rich are getting richer and the poor are getting poorer. That is not good for democracy.

Workers particularly are a lot worse off. All you have to do is isolate particular groups of workers to see the extent to which that is the case. I think you can make the case that the democratic system is strained by polarization of income distribution. I guess it was Franklin Roosevelt who said we would not have enduring prosperity in this country unless all of our people shared in it. I think that still is the case. Most people do not share in the benefits of the system. Eighty percent are worse off now than they were in 1973. In a nutshell, part of what has happened is political, the trend to make it hard for workers and low-income people to use the political system to maintain this diamond-shaped income distribution. That is what the conservative trend is about. Lower-income people with limited economic power historically have been able to use their political power to change the situation. In recent years the ability to use the political system to offset economic weaknesses has diminished a great deal, though there is more to it than just politics.

Fundamental changes are underway in the world's economy that greatly alter the way we have to do business if we really want to change income distribution and we really want people to have relatively good incomes. Instead of economies of scale and the easy improvements in our standard of living which that made possible, we now have to be a lot more concerned about competitiveness and productivity and quality and adaptability and adjusting to change. In other words, the days of easy improvements in our standard of living are over. We have had easy improvements because we had all these natural resources. Natural resources are, now relatively unimportant. Technological changes have broken the connections between natural resources and output.


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Economies of scale depended heavily on a monopoly on the internal market. We had the American market all to ourselves which meant that we could produce lots of cars or whatever and could build up such output that we could improve our standard of living relatively easily. We have lost that. Internationalization means that we no longer even have the American market. Our ideological commitment to free trade means that we are no longer willing even to use that market to cause other people to open their markets. Therefore our competitors, like the Japanese, are able to have the second-largest market all to themselves and get economies of scale and hit our market, which we no longer have to ourselves. They have a strategy, in other words, and we do not. We have a passive policy, they have an active policy.

There is even more to it than that. New technology means that spreading output over large physical units-producing a million units with the same plant and therefore reducing the cost per unit-is no longer economically and technologically viable. We now have technology that makes possible flexible manufacturing and targeted markets. At a Ford plant I went through some months ago, they have different products coming down the line. That would have been impossible twenty years ago. Now they tell a computer to make some red ones and some green ones. They do not have to retool. They reprogram. That is a very different way to produce. That whole production system requires that we do things differently than in the past.

Another reason that previously we were able to get relatively easy improvements in our standard of living was what economists call interindustry shifts. Many of us probably improved our income by moving out of agriculture and into urban manufacturing. Personally, I was born in north Louisiana in an area that had very low productivity; I am one of the few people born in the twentieth century that also lived in the nineteenth, because it was very low income. The movement into manufacturing improved everybody's standard of living. Now the movement is out of high value- added manufacturing and into services. In other words, the interindustry shifts are now against us.

So what is the way out? The only way we are likely to be able to maintain relatively high incomes is to have a high-quality work force. This production system requires people to be well-educated and well-trained and in very different ways. The essence of our problem is that we are having to adjust from a system that was very different into one where we do not know exactly what to do. We do not know how it works its way out. What we do know is that education will be a very important determinant of our ability to move out of that system.

Essentially the information technology has made mass amounts of information available to us. Unless we know what to do with it, it is not doing us any good. We have to learn to analyze information, to think, to solve problems, to deal with change, to learn, to communicate with great precision. We have to have people who can be innovative and creative in order to be able to deal with this system. That is the essence of our challenge.

THE OLD SYSTEM of education was a dual system. It was a two-track system. It did not cause us too much damage in the mass-production, goods-producing world. You had one system for the elite.

They had the elite schools, elite families, elite jobs, elite learning systems. Those people were taught to think and to be creative. They had good teachers and small classes and did traveling.

Then you had the system for most of us. In fact, the mass production system was imposed on the schools. The assumption was that you did not have to think to put bolt number thirty-five on the left rear wheel. You were taught to do routine things. You were taught by rote, not to deal with change. The basic idea behind the system was to get some low-paid teachers-and that is the reason we started using women-who would be blue-collar workers in the system, and then you would get some men to run the system like you do a factory. They would be the elites. The basic idea was to turn out a standardized product that could go to the fields and go into the factories.

Now, it is a false assumption that that you can continue to have one system for the elites and another system for the rest of us-that is the really important challenge we have to face. The only way to keep a world-class economic system--and to strengthen the democratic system--is to see that all


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of our people have quality education. Not just the elites.

That is the basic case.

WHEN YOU SAY that education is a requirement to be world-class, and that education has been important and improves people's condition, some will immediately say, "Nonsense, we have always had people who have been well-educated." When I was responsible for the Job Corps, 20 percent of the high school graduates coming in were still illiterate. Therefore how can you say they're educated? The first thing you have to recognize is that there is a difference between schooling and education. Education is ideas, skills and knowledge, and not time that you spend in the school.

When we think about education, we must think about all of the learning systems that go with the school. One is the family. One of the reasons that family income is the greatest predictor of educational achievement is because some families can be efficient learning systems and some cannot. Poverty does not cause you to have an efficient learning system. Therefore the presence of poverty hurts learning, which is why interventions like the Women Infants and Children program and Headstart can compensate for the inefficiencies in poor learning systems, poor families.

One of the false distinctions we make is between health and education. Education improves health. People's ability to think, to make decisions, to read, to appropriate health technology will make it possible to improve their condition. One of the greatest predictors of dropout is the birth weight of babies when they are born. We can assign a probability that it is going to cause higher dropouts. The education of the mother has a lot to do with the education of the children. All the early childhood work suggests that the kind of education and nurturing young children get will determine the ability of those children The main point of that is a lot of kids are behind because they come from poor families when they start to kindergarten. Therefore we have to think of overcoming that with interventions that improve health. Probably the best way to break the inter-generation of poverty is to concentrate on the education and the health care of the mothers, so that they can then do a better job of educating their children. A lot of your basic learning traits, I am told by the experts in this matter, are fixed by the time you are three to five years old. So if you have not had a good learning experience up until then, you're likely to be in big trouble.

Little kids come into this world as expert learners. They are little scientists. They are busily stating hypotheses and checking them and getting the data and learning is fun. They are very efficient at it. Something happens when we get them into first grade that tends to make it un-fun. It makes it hard and no longer challenging.

Another important learning system is communities-the reinforcing that kids get. Some kids come into the world being told by their families that they are smart, that they can learn, that they are programmed for success. Poor kids come into this world programmed for failure. They will tell you you cannot learn. They will track you when you get into first grade if you are the wrong color. They will call you things like, "educable mentally retarded." Therefore you communicate to the kid that you cannot learn and therefore


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we will keep you here, we will give you schooling, but we will not give you education. Then you get the reinforcement of that from the community structure, whereas the elites get reinforcing that they can make it, they are smart, they are destined for the elite work.

One of the most important learning systems that tends also to perpetuate the elitist system is the corporate classroom. There are eight million students in American corporations. Corporations spend $220 billion on them. About eighteen companies will now give you a degree. The main people who get those learning chances in those corporations are white males. The least chances go to black males and the middle chances go to women, black, white or brown. Tony Carnivales the director of the American Society of Training and Development says that eighty-five percent of what we need to know in order to improve our incomes during our lives comes from work.

Therefore we need to think of all these learning systems.

IN SPITE OF THE FACT that we have had a two-tier system, education has always been an important cause of improvements in income and standard of living. But it is becoming even more important. In this new kind of world that we are in, it will no longer be possible for a person with relatively little education to make a good living. We will no longer get economies of scale. People will no longer be able to go to work in the big factory or get a highly-unionized job that will pay a middle-class income even if they only have six years of schooling. In this kind of world education becomes much more important than ever before. Why? Part of it is the internationalization of the economy which puts a premium on productivity and quality and ability to adapt to change. Part of it is the competitiveness of the international economy.

What does competitiveness mean? It means to me, unlike most economists, how we operate in such a way that will make it possible for us to maintain and improve our incomes. To most economists maintaining income is not important. It is how do you clear your markets that is important. We have cleared our markets since the early 1970s by cutting our income. We have put everything on sale and have lowered real standards of living as a result of that. We have delayed the cut during the 1980s with heavy debt. Since 1980 the debt per worker in the United States has gone up from about $6,500 to $18,000. In 1985 the average worker was owed $1,000 dollars by foreigners. Today we owe foreigners about $5,000 per worker. And the amount we owe is rising rapidly.

In a different context that means that since 1980 we have improved our consumption per worker in this country by $3,500 to $4,000. We have improved our production per worker just over $1,000. Where did we get the rest? We borrowed it and we used up our capital. We are eating our seed corn. We have delayed the reductions in our standard of living which will come unless you can figure out some way of never having to pay your debts. When we start paying, we are going to take the rest of the cut that we need in order to maintain our standard of living.

There is only one way to avoid it. You either cut your standard of living or you improve your productivity, improve your quality, improve your ability to adapt to change and to innovate.

It comes down to being able to develop and use the leading edge technology. Why? Technology is in two categories. One is standardized. Technology really means ideas, skills and knowledge embodied in equipment. The equipment is unimportant. We destroyed Germany's equipment but they came back because the thing that was really important was ideas, skills and knowledge. Once we perfected the manufacture of the automobile that standardized technology will seek out low wages. It will not be done in a relatively high-wage country. It becomes a commodity it can be exported. Therefore what we have to do in order to improve our income and maintain it is to constantly be innovating which means to have people who can develop and use the leading edge technology. We also have to have supportive public policies. How are we doing with respect to all of that? Not very well. We have probably the best top half of the work force of any major industrial country and the worst bottom half of the work force of any major country. It is the bottom half that we have to concentrate on that will cause us trouble.

Why do we have the best top half? We have the elite schools. Our colleges and universities are still world-class though we can lose that if we aren't vigilant. We still have a technological lead and since you learn by using the technology we have been able to benefit from that. We have benefited from the immigration of well-trained, well-educated people into the United States when we were the highest standard of living country in the world. We are now about fifteenth in our real wages. We have a much lower standard of living than Sweden, Switzerland and Germany therefore we cannot expect to enrich our pool by pulling on people from those countries.

The bottom half is the way it is because most of our schools are mass production schools. Racism and elitism perpetuate this system. We have undemocratic public policies and the most challenging of these things besides trying to root out racism and discrimination is that we probably have the poorest school-to-work transition system of any industrialized country. That is where most minorities are located. Since minorities are a rising proportion of our total work force it is a very serious problem for the country. Half of our youth is not college-bound. Twenty million young people. We spend about $5,000 on each one of our college students and almost nothing on the people who are not college-bound.

What we need to do of course is to reform the system. School reform is very important and since that is well understood I will not say a lot about it except that the key to reform is to get good teachers, give them status and pay, give them the freedom to teach, and give them the resources to figure out what needs to be done. Just like we need to reform our factories and management systems in order for them to be more competitive.

THEN WHY DON'T we? A lot of myths keep us from doing it.

An important myth is that we can make it with a two-tier education system, that we do not have to give quality education to all of our people because we never have and we have done all right in the


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past, so why should we do it now.

The bottom line is this. In this economy people will either be assets or liabilities. Uneducated, untrained, unhealthy people will be a liability. Trained, educated, healthy, motivated people will be an unlimited asset. We cannot afford poor education; it is no longer a moral question.

Another reason you cannot make it with two-tier systems is that this technology is unique. The information technology is ubiquitous. It will be everywhere. You will not escape it. The idea that somehow you can go into services and you will not need it does not realize that the information technology will be used in the services as well as in any other place. I think we have a lot of work to do to convince people that we need quality education for all of our people.

The second myth that we have to deal with is equally pervasive in this country and has deep roots. It is that educational achievement is mainly due to innate ability and some kids cannot learn. Therefore, why try? We have had polls where people really believe that. All of the scientific evidence is that anybody can learn. It is mainly hard work that causes educational achievement not innate ability. I think the evidence of that is so overwhelming that we ought not to have to spend a lot of time on it.

The third myth that will cause a lot of trouble is from a lot of my colleagues in higher education who will make the following argument: They will say, "In a highly competitive world we cannot sacrifice excellence for equity. In order to maintain our position of excellence we cannot have quality education for everybody."

That is a very serious error and very dangerous for a variety of reasons. One, everybody can learn so the whole idea that excellence is incompatible with equity is a false dichotomy. The only way you can argue that is to argue that some people cannot learn. There is no evidence for that. Second, a failure to provide quality education will cost the elites dearly. It will also cost the country dearly. They diminish their own quality of life by failing to deliver quality education for everybody. Educated people themselves will actually not be very well educated if they are elitist. A person who is a racist has a serious literacy problem and is not well educated. Therefore we owe it to those people to help educate them. A multicultural, multiracial society has tremendous advantages. It also has serious problems. The advantages are higher quality of life, greater prosperity, stability, creativity which is one our strong suits. The downside is racial and ethnic conflict, prisons, using up a lot of our resources in order to try and preserve the peace and therefore to greatly diminish the quality I think it is also terribly important for everybody to see that we are in this together in this country. Regardless of whether you accept my moral values you have to accept of making the proposition of making a virtue of necessity. We are a multicultural, multiracial society. We are not going to change that. Therefore we had better do everything we can to maximize the positives and minimize the negatives of that. We are like a team. If some members of our team cannot play then we are going to be in trouble. Therefore I conclude that we will not have educational excellence without educational equity.

The fourth of these arguments is that it costs too much to provide educational equity. Well I can demonstrate to you and anybody that wants to debate is that it costs you too much not to. It costs us like $30,000 to $35,000 to keep somebody in the Texas state prison system. Ninety percent of our inmates are illiterate. We could make them literate for a lot less than $30,000 a head. I figure I could make them literate for less than a thousand. Therefore it is just bad business not to do that.

We have to overcome the mentality that sees the price of everything but the value of nothing. We have to cause people to see that this is an investment, not a cost. Therefore we will make money on the deal. We have made money on the deal investing in our education.

The fifth of these arguments is, "All right you've convinced me," some people will say. "Therefore let's make some marginal changes in the school system and that will solve the problem." You will not do it. Marginal changes by definition will be neutralized. We have got to make radical changes in the system, not marginal changes. The system we have got is geared to the plantation and the large mass-producing industry. It's as obsolete as those are. Therefore we need to change it. Finally, some people will say, and this is one of the hardest to overcome politically these days, they will say, "All right maybe you have convinced me but we do not really have any choices. We have got to live with the system. You cannot change the system. It is too deeply entrenched. Therefore nothing works. You cannot get an intervention that is really going to have any effect on anything." Then you will have people tell me what I believe to be the truth. We hear all of these exemplary programs. We also hear all about the exemplary schools. I have yet to see an exemplary school system anywhere in the country. Therefore our challenge is how do we translate these exemplary interventions into systemic changes that will really make a difference.

I think we could do that. I also believe that it is not true that none of these interventions work. We can cite all kinds of interventions. I have mentioned the WIC, Headstart, Job Corps, Creative Rapid Learning System, the G.I. Bill of Rights which got me educated. Some people say, "See what happened when we did that." It was one of the best investments we ever made in this country and our people. We are running into all kinds of exemplary interventions. Things do work. You can change the system. Therefore we ought to go about it.