Demanding educational excellence is not only a critical component of the United States’ business model, but it is also our moral obligation as a great nation … which means we must solve the achievement gap once and for all. We say this not simply because it’s the right and honorable thing to do for our fellow Americans, but also because the negative financial impact of this injustice becomes more ominous every passing year.
Sixteen years ago, McKinsey & Company released a report called The Economic Impact of the Achievement Gap in America’s Schools. It was a cautionary tale for the ages:
If the United States had in recent years closed the gap between its educational achievement levels and those of better-performing nations such as Finland and Korea, our gross domestic product (GDP) in 2008 could have been $1.3 trillion to $2.3 trillion higher. This represents 9 to 16 percent of GDP.
If the gap between black and Latino student performance and white student performance had been similarly narrowed, GDP in 2008 would have been between $310 billion and $525 billion higher, or 2 to 4 percent of GDP. The magnitude of this impact will rise in the years ahead as demographic shifts result in blacks and Latinos becoming a larger proportion of the population and workforce.
If the gap between low-income students and the rest had been similarly narrowed, GDP in 2008 would have been $400 billion to $670 billion higher or 3 to 5 percent of GDP.
During the pandemic, McKinsey provided an update to the 2009 report that said “if the black and Hispanic student-achievement gap had been closed in 2009, today’s GDP would have been $426 billion to $705 billion higher. If the income-achievement gap had been closed, we estimate that GDP would have been $332 billion to $550 billion higher.”
As we discuss these issues, it’s important we all see the big picture as opposed to simply looking out of our own individual windows. You may not recognize your experience or your child’s experience in these words, and I genuinely hope you don’t. But, trust me, far too many people do – and, as a nation, we cannot afford this. We are all in this together.
Think about it this way: Uneducated kids are just bad business. Take two fifteen-year-olds, Justin and Charles. Charles attends Highland Park High School, an exemplary school that should be congratulated for consistently ranking as one of the top schools in the nation.
Highland Park, an enclave of Dallas, is 91 percent white, and 88 percent of the population has a bachelor’s degree or higher (63 percent of the teachers in the Highland Park Independent School District have a master’s degree). The median household income is above $250,000.
Over 95 percent of Highland Park ISD graduates attend college, and the students consistently score above the national and state average on college entrance exams. The most recent statistics show that Highland Park High School students scored a composite 26.9 on the ACT, 7 points above the state average, and the district’s average SAT composite score of 1286 is higher than the state average (978) and national average (1028). Amazingly, 631 Highland Park High School students were recognized with Advanced Placement Scholar Awards by the College Board for demonstrating outstanding college-level achievement through their performance on AP exams and 257 students were recognized as AP Scholars with Distinction.
Across town, Justin attends Franklin D. Roosevelt High School. Justin’s school recently received the equivalent of a D/F rating from the Dallas Independent School District. The average SAT score is 835 and the average ACT score is 15.5. U.S. News and World Report ranked Justin’s school within the bottom 20 percent of all the schools in Texas. Eighty-four percent (84%) of the students at Franklin D. Roosevelt are classified as “at-risk” of dropping out of school and only 67 percent of them manage to graduate in four years. Of those who stay, only 4.5 percent are considered “college-ready” in reading and math at graduation.
Since only 67 percent of students at Roosevelt graduate in four years, there is a high probability that Justin will drop out of high school before graduation. Workers without a high school diploma earn around $734 a week while high school graduates earn around $946 a week, meaning Justin, if he drops out, will earn roughly $11,000 a year less than high school graduates. Since workers with a bachelor’s degree earn around $1,533 a week, Justin will likely earn around $41,500 a year less than them.
In large part because of this wage disparity, a high school dropout will probably rely heavily on public assistance throughout his or her lifetime. High school dropouts also have more health problems and are more likely to be incarcerated at some point.
But the social services Justin and, presumably, his children will use are only half of the equation. The total financial cost to society remains severely incomplete if we fail to include the lost revenue from Justin’s reduced tax contribution and his lack of participation in our national economy.
On the other hand, Charles will most likely graduate from both high school and college and, statistically speaking, earn at least $79,000 a year. If he gets a master’s or other professional degree that figure is more like $99,500. Assuming they both work until they are 65 – and depending on the path Charles chooses – Charles will earn and pay taxes on $1.6 million to $2.5 million more than Justin over their lifetimes. Plus, Charles’ earnings will give him the financial wherewithal to buy homes, cars and other goods and services to fuel the overall economy.
When you consider what Justin is taking from the system as opposed to what Charles is adding to it, the business of education seems much more like an investment than some sort of charity case, doesn’t it?