In a Forbes.com piece, Solyndras in the Classroom: How We Vastly Overrate Education Louis Woodhill makes a good case against the reflexive political promise to “invest more education.”
Barack Obama hardly ever gives a speech without mentioning the need to “invest more in education”. Many so-called “Conservatives” voice agreement with this notion. The unstated assumption on both sides of the aisle is that “investment in education” produces an attractive return. But is this true?
No, it’s not. The numbers strongly suggest that, at least in economic terms, America has gotten nothing for the enormous increase in educational “investment” that we have made over the past 60 years.
Before going any farther, it is important to realize that what Obama (and even most Conservatives) think of as “investment in education” is really “government spending on education”. Much, perhaps most, of the learning vital to the functioning of the economy occurs on the job. None of this “education” is reflected in the numbers that the politicians look at.
Accordingly, the “investment in education” that Obama wants more (and more, and more) of is actually “federal-government-directed investment in education”. When considering whether we really want more of this, it is important to remember that it was “federal-government-directed investment in energy” that gave us Solyndra, Ener1, and Beacon Power, and that it was “federal-government-directed investment in housing” that has cost taxpayers more than $150 billion in losses (thus far) at Fannie Mae and Freddie Mac.
Woodhill then puts some numbers to it.
First, he calculates that the “investment” in education, or the cost of a high school diploma, has increased from $22k to $158k per student (in inflation-adjusted dollars) from 1951 to 2009.
Then Woodhill estimates the payoff, in a way that I don’t think will persuade many people.
I’d take a more direct approach to estimating the benefit by simply determining if real (inflation-adjusted) wages for high school graduates have increased in-line with investment, by more than 7-fold since 1951.
My first Google search turned up this page that shows that the average wage for a 25-34 year-old male worker with a high school diploma has declined since 1980 from $44k annually to $33k in 2009 (in inflation-adjusted 2009 dollars), a 25% decline. Female workers had a 13% decline.
I think most people would guess correctly that wages for high school grads have not increased 7-fold since 1951.
Sure, benefits to the 7-fold increase in education spending may come in forms other than wages. Maybe it has helped reduce crime rates or allowed more of us to to enjoy a Friday evening high school football game, though I don’t buy that those benefits are big enough to cover that big of an increase. I’m open for arguments against that though.