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Can We Make America Smarter?

Report of the Commission on the Use of Standardized Tests in Undergraduate Admissions

William Fitzsimmons, Chair. National Association for College Admission Counseling, 55 pp., available at www.nacacnet.org


However the current economic crisis is resolved, the future living standard of Americans will turn on how productive we are and how much other countries will want what we create. The challenge goes beyond restructuring institutions. More crucial is whether we will be astute enough to hold our own in a world more competitive than we have ever known.

During its first two centuries, this country seemed slated to gain and then maintain global preeminence. Reasons often cited were a political system congenial to an open economy, infusions of immigrants, and the continent’s abundant resources. Claudia Goldin and Lawrence Katz, two Harvard economists, have a different explanation. In their new book, The Race Between Education and Technology, they contend that what distinguished the United States was that it became the world’s most educated nation. They combine an acute sense of history with a skillful use of statistics. Thus they note that in the Jacksonian era, access to education opened as “common schools” ceased charging fees. After the Civil War, school attendance and hence literacy became compulsory, creating a more agile and adaptive workforce. Over the decades that followed, “education became the dominant factor determining the wealth of nations.” While Goldin and Katz are hardly the first to focus on human capital, they specify that in America, these assets were fostered by lessons learned in classrooms.

Their principal thesis is that new technologies can bring advances in productivity only if they are matched by a workforce able to operate new kinds of machines. After all, little is gained by installing state-of-the-art equipment if no one nearby can make it work. Thus Golden and Katz conclude that it is added years of schooling that “facilitate the adoption and diffusion of new technologies.” Even early in the last century,

high school graduates were sought because they could read manuals and blueprints, knew about chemistry and electricity, could do algebra and solve formulas, and, we surmise, could more effectively converse with the professionals, such as chemists and engineers, in high-technology industries.

For our own time, they argue, a higher level of education is needed. To start, they say more people should be pursuing degrees in science and engineering—they cite cellular biology and nanotechnology in particular—where other countries are surpassing us. But since many occupations require sophisticated skills, they also want to see an increase in general college enrollments, which they say have been slowing.

Like most economists, Golden and Katz rely on what can be closely measured: output per labor hour, income differentials, diplomas awarded, capital investment. They deploy upward of a hundred tables, based on mathematics many readers will have to take on faith. Yet important human stories emerge from their logarithms and regressions. They note, for example, that workers “become smarter” as they learn to operate sophisticated equipment. (Marx comes to mind : “the laborer is brought face to face with the intellectual potencies of the material process of production.”) New technologies become our teachers, at least for those prepared to learn.

While their book is filled with interesting material, I am uneasy with its basic premises. For example, as they read the figures, a “slow-down in college-going” began in the 1980s and is still continuing. As a result, there are fewer workers with the skills that are normally acquired through higher education, which has in turn impelled employers to offer higher salaries for those having degrees. Therefore more money has been lofted upward, widening the gap between the college class and everyone else. (This persists in dire economic times such as the present, although incomes for college graduates have declined slightly in recent years: blue-collar unemployment is now over twice that for workers who have completed college.) The closing chapter of The Race Between Education and Technology calls for opening higher education to more Americans, which will mean making it possible for many people from lower-income brackets to go to college, so that the economy can gain from their abilities and also diminish disparities in earnings.

In fact, there’s only been a “slowdown in college-going” to the extent that annual growth in the number of degrees conferred is not as great as it was in the past. But we can’t expect to replicate the doubling of degrees that occurred in the 1960s. What is evident from Table A is that the pool of Americans graduating from college has been increasing without a break. Moreover, since 1980, the proportion of freshmen who finish has also grown from just 37 percent to nearly 60 percent. Currently, fully two thirds of Americans of college age actually start in four-year schools or two-year programs.

Many in the other third are qualified for college, but the barriers to attending are not as linked to ability to pay as one might think. Most community colleges still charge less than $2,500 for a full year’s program. Tuition at regional state universities ranges from $3,790 in Florida to $8,424 in New Hampshire; but students often pay less because of Pell Grants and other subventions. (In fact, as a consequence of the economic crisis, enrollments at less-expensive state colleges are projected to increase dramatically in 2009.) The real problem is the 25 percent of teenagers who, according to the US Department of Education, don’t finish high school and those who graduate unprepared for basic college work.

Goldin and Katz are quite right in saying that the pay premium for completing college has widened. Back in 1960, the census found that the earnings of college graduates exceeded those with only a high school education by 39 percent; in 1980, that edge was 50 percent; and by 2007, it had grown to 68 percent. But if there’s been a bidding war, the payoffs have been relatively modest. If we look simply at men aged thirty-five to forty-four who have bachelor’s degrees, their median earnings in 2007 were slightly over $68,000 (which means half make less than that), with college-educated women that age receiving just over $48,000. In fact, the growing earnings gap has owed less to what graduates as a whole are making than to the outsized sums accruing to the very top tiers.1

As Goldin and Katz see it, attending college has discernible effects for those who decide to go; why else would graduates be avidly sought after and better paid? So I wish they had said more about how the college experience affects productivity. Compared with all degrees, the proportion of those given in engineering and the physical sciences is actually declining. Instead, more students are choosing what a professor of mine called “conversational occupations.” If current preferences continue, in the next ten years our universities will produce 430,000 new lawyers and 1.4 million new MBAs. Goldin and Katz realize this, which may be why they reframe their argument by saying more generally that “the skills that are in the greatest demand today are the analytical ones,” especially people “who can think abstractly.” But I’m not so sure that the modes of abstraction and analysis recently common to academe (postmodernism?) will help get the next generation of Apples and Googles started. Even as we want to support education, we should be wary of ascribing outcomes to it that are more fancied than actual.

When it comes to technology, in the past some of the greatest strides were made by men like Henry Ford, George Eastman, and Thomas Edison, who had minimal formal schooling. More recently, Larry Ellison (Oracle), Bill Gates (Microsoft), Steve Jobs and Steve Wozniak (Apple), and Michael Dell (on whose computer I’m writing) like recounting how they dropped out of college. They clearly have good minds, as attested by the enterprises they’ve built, but apparently they were no longer stirred by what professors wanted to teach them. Nor are the strengths of entrepreneurs like Gates and Jobs primarily technological. More crucially, they have an intuition for products people will feel they must have once they see them on the shelves.


In view of Goldin and Katz’s concerns, it is relevant to ask if there is actu- ally a demand for more people with technology-linked degrees. Each year, the Bureau of Labor Statistics tallies how many men and women are employed in some 1,400 occupations, from aerobics instructors to zoologists. And biennially it prepares forecasts of how the job market will look a decade later. Its most recent Occupational Outlook Handbook uses payrolls for 2006 as a base, and then offers employment estimates for 2016.

I was surprised to learn that in 2006 the nation altogether had only 17,000 paid positions for physicists, apart from teachers, and that only 1,000 more openings are envisaged for 2016. The number of employed mathematicians is expected to rise from 3,000 to 3,300. (Of course, recessions put new jobs on hold; but we may hope that new hirings will be resumed by 2016.) Employment for engineers is slated to grow from 1,512,000 to 1,671,000, about the same percentage of growth as for the workforce as a whole. Indeed, at current rates, 650,000 new engineers will have received degrees by 2016, four times the predicted number of openings. Hence a high attrition rate. Most reach salary ceilings early—chemical engineers average $73,300 at midcareer—so many shift to sales or management.

Perhaps our society would benefit were we to train more people in science and technology. But no matter how estimable their knowledge, when employers say they don’t need more of these employees, it tells us either that there aren’t tasks for them to do, or that money isn’t there for other things they might be doing. Government-financed public works projects would increase openings in some scientific fields, although not necessarily in cellular biology. While updating our infrastructure will clearly aid the economy, it doesn’t necessarily bring innovations that will keep us competitive in the twenty-first century.2

Something more emerges from the Occupational Outlook Handbook. It lists hundreds of jobs involved with high-tech instruments, including installing, repairing, and debugging them. These workers outnumber college-trained scientists, and even engineers. Here are some of the things they do: gynecologic sonography, geodetic surveying, avionic equipment mechanics, semiconductor processing, air traffic controlling, laboratory phlebotomy, blood bank clinical work, cryptanalysis keying. Yet these technicians are most often only high school graduates, sometimes with community college credits. Moreover, the knowledge they need is acquired mainly on the job, because that’s where the equipment is. A former undergraduate of mine, who didn’t graduate, is fairly typical. She began as a secretary for a firm that sells endoscopic cameras to hospitals, and they saw that she had a talent for understanding the technical system that makes the cameras work. She now teaches surgeons twice her age how to use those instruments.3

Not all high-tech employers look for workers with degrees. By now, we can agree that European and Asian carmakers have taken the lead in using computer chips for ignition timing, fuel injection, and cylinder control. These devices must be expertly installed. And they are, by hourly workers on the assembly line. That noted, Table B shows where four representative firms decided to locate American plants. True, they look for states that offer tax waivers, are unwelcoming toward unions, and have pay rates below the national norm.4

  1. 1

    See Stephen Kotkin, “Minding the Inequality Gap,” The New York Times, October 5, 2008.

  2. 2

    See Everett Ehrlich and Felix G. Rohatyn, “A New Bank to Save Our Infrastructure,” The New York Review, October 9, 2008.

  3. 3

    Americans with “some college,” but who have not graduated, are too often overlooked. In November 2008, they comprised 28 percent of the workforce, nestled between the 35 percent who had degrees and the 37 percent with high school or less.

  4. 4

    See James Lardner, “The Specter Haunting Your Office,” The New York Review, June 14, 2007.

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