Readers,
We have Tom Sticht to thank for the following paper.  I appreciate the
documentation he provides in sharing his thoughts.  What are the
thoughts of the members of this list?
Donna

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~``


From: tsticht at znet.com [mailto:tsticht at znet.com] 
Sent: Saturday, March 10, 2007 9:34 PM
Subject: Education, Skills, Lost Wages

March 10, 2007

Higher Education Credentials, Higher Skills, and Lost Purchasing Power:
A Dilemma for Workforce Development Policy and Practice

Tom Sticht
International Consultant in Adult Education

Not long ago the thinking in the Adult Education and Literacy System
(AELS) of the United States was that adults with literacy skills below
the high school level and who lacked a high school diploma could enter
into ABE (adult basic education), learn enough to work up to ASE (adult
secondary education), and then study hard to get a high school diploma
or General Educational Development (GED) certificate. That was the end
of the education provision in the AELS. In effect, this sequence of ABE
to ASE to "graduation" was meant to replicate the K-12 system of the
public schools for children. In ABE the adults got primary school and
middle school education (completion of the 8th grade) then in ASE they
got secondary
(high) school education (9th to 12th grades) and then they graduated
from high school or its "equivalent" in the case of the GED.

In the last few years this view of the AELS has changed. In many
programs it is no longer considered sufficient for the AELS to provide a
K-12 "equivalency" education and provide a high school diploma or GED
certificate. Instead, many are calling for the AELS to provide a college
preparatory education so that AELS students can get their HS diploma or
GED and then qualify for and transition into college, and acquire a two-
or four-year college degree.

The reason generally stated for wanting to shift the goal of the AELS
from the terminal GED to the "transitional" GED is because some labor
market analysts think it is necessary for adults to have post-secondary
education and a higher education degree of some kind to earn enough to
be self-sufficient in today's economy. For adults to meet college entry
requirements means that they must perform well above the minimal passing
scores for the GED, which have typically been set "...so that about
one-third of the norming sample would not meet the passing threshold"
(Tyler, 2005, p.
47). In this case, the "norming sample" refers to high school students
who took the GED as part of its development.

The Education/Literacy Skill Trade-Off

The idea that one needs a higher education degree to be successful in
today's labor market economy is complicated by the findings by Kirsch,
Braun, Yamamoto, &  Sum (2007) of the Educational Testing Service. They
present data showing that the mean weekly earnings of U. S. full-time
employed adults ages 16 and older vary by both education level and Prose
literacy level as measured by the National Adult Literacy Survey (NALS)
of 1992.

Interestingly, some adults with two year college degrees were earning
$386 weekly while some other adults with only 9-12 years of education,
and no high school diploma, earned $414 weekly. So in this case adults
with less education earned more than those with two year degrees. Why?
The two year degree holders were in NALS literacy level 1, the lowest
level of literacy, while those with less than a high school education
were in NALS literacy level 3, the mid-level of literacy for adults in
the NALS. Here, then, having a higher level of literacy was more
important than having completed high school and gone on to
post-secondary education and getting a two year college degree. Skill
and not education credentials appear to be the factor producing higher
income here.

On the other hand, some adults at NALS literacy level 4, the next to the
highest level of literacy, earned $493 weekly, while some at NALS level
1 earned $586 weekly. Why? The level 4 literates had only a high school
diploma while the level 1 literates had somehow acquired four year or
higher education degrees. So a higher education degree for those near
the bottom of the literacy scale can offset the benefits of having
literacy skills near the top of the scale for those without a higher
education degree. Degrees and not skills seem to be in play here.

Real Income and Education Credentials

Barton (2000) reported that more people have completed high school and
acquired some college over the last quarter century yet real hourly
wages (i.e., adjusted for inflation)  for both men and women with less
than high school, high school, and some college have declined. For men,
even college graduate's real hourly wages declined 4 percent, while for
women they increased. Only for those with advanced degrees have real
hourly wages increased for both men and women (p. 34).

Kirsch, Braun, Yamamoto, & Sum (2007) present data showing that in
constant
2005 dollars ("real income") the mean lifetime earnings of 18 to 64 year
old males in the United States has declined from 1979 to 2004, except
for those with a Master's Degree or higher. For those men without a high
school diploma or GED, the drop in lifetime earnings was -39 percent,
for those with a high school diploma but no college, the decline was -29
percent, for those with 1-3 years of college, including an Associate's
Degree the decline was -13 percent and for those with a Bachelor's
degree the decline was -1.2 percent. For those with a Master's degree,
the increase from 1979 to 2004 was +15 percent (Table A12 p. 31).

These data suggest that if more and more men attain higher levels of
education, then in wages adjusted for annual inflation from 1979, there
is likely to be an additional drop in the lifetime wages for men with
education up through a Bachelor's degree. Following this trend, if more
and more men attain a Master's degree, then we should observe a decline
in the inflation adjusted wages for those men with Master's degrees in
the coming years. Presumably, as Barton's (2000) report suggests, as
more and more women acquire higher education degrees this will
eventually have some deleterious effect on women's real income at higher
education levels, too.

These kinds of trade-offs among skills and credentials and their effects
on income call for caution in our approach to workforce development
policies and practices. We need to make certain that our educational
efforts lead to both better skills and higher education credentials for
maximum returns on investments in education. But we also need to be
concerned that by enlarging the pool of both a better educated and more
highly literate workforce, there are real increases in the economic
purchasing power for those who make a considerable investment of time
and effort in achieving both higher credentials and higher skills.
Otherwise we run the risk of seeing more and more highly educated and
skilled citizens without the capacity for self-sufficiency nor the
sustainability of the means of providing not just for themselves but
also for their families.

We are presently in the United Nation's Decade of Sustainable
Development and the United Nation's Decade of Literacy.

References

Barton, P. (2000, January). What Jobs Require: Literacy, Education, and
Training, 1940-2006. Princeton, NJ: Educational Testing Service

Kirsch, I., Braun, H., Yamamoto, K., &  Sum, A. (2007, January).
America's Perfect Storm: Three Forces Changing Our Nation's Future.
Princeton, NJ:
Educational Testing Service.

Tyler, J. (2005). The General Educational Development (GED) Credential:
History, Current Research, and Directions for Policy and Practice. In:
Comings, J., Garner, B., & Smith, C. (Eds.). Review of Adult Learning
and
Literacy: Volume 5. Mahwah, NJ: Lawrence Erlbaum Associates, Publishers.

Thomas G. Sticht
International Consultant in Adult Education
2062 Valley View Blvd.
El Cajon, CA 92109-2059
Tel/fax: (619) 444-9133
Email: tsticht at aznet.net