by Rob Kaplan
Education is a great investment for our cities, our state and our nation. It produces benefits for taxpayers, businesses, and most importantly, for our kids.
Unfortunately, educational attainment is lagging in Texas, particularly among minority students. This gap has broad implications for the state’s economy and the financial well-being of its residents.
The good news is that there are innovative efforts being led by businesses, schools and community organizations here in Texas that aim to address this critical issue. And there are ways that each of us can contribute to progress in our communities.
According to Dallas Fed research, while almost half of U.S. high school juniors are college-ready, only about one-third of Texas students are at that level. Texas also suffers from low college-graduation rates, especially among black and Hispanic students. Among young adults ages 25 to 34 in Texas in 2014, only 29 percent had at least a bachelor’s degree. That’s about 5 percentage points below the nation.
Unless we boost the educational attainment of young adults in Texas, we are missing an opportunity to not only attack inequality, but also to increase the productivity and spending power of Texans. Texas high school graduates earn 33 percent more, on average, than those who don’t finish high school. College graduates earn 90 percent more than those who only have a high school diploma.
What’s more, a 2015 Dallas Fed survey of 1,400 small businesses across the state revealed that the No. 1 concern when considering expansion was the difficulty of hiring workers with the right skill set. Businesses need skilled workers who have the capacity to understand sales and marketing, advanced technology and math. They need people who have the capacity to learn to manage teams. We frequently hear from employers that they are increasingly shouldering the burden of training workers on matters that they could have learned in school.
Texas can do better, and the time for action is now. The state’s youth population is increasing rapidly, particularly among Hispanics. In a book recently compiled by the Dallas Fed, Ten Gallon Economy: Sizing Up Economic Growth in Texas, Princeton University professor Marta Tienda says the state “is on the brink of squandering a demographic dividend by underinvesting in its formidable pool of high school graduates.”
At a recent event convened by the Dallas Fed, “Educational Attainment: A Pathway to Prosperity,” business leaders and community groups discussed initiatives to improve our youths’ educational prospects and work readiness. Participants focused on the importance of programs that attempt to close the reading and overall educational proficiency gap of grade school and high school students and upgrade the skill levels of teachers. They also highlighted existing programs which aim to improve early childhood education and create proof points in early literacy.
Participants also profiled new and innovative programs that aim to improve the workforce readiness of high school students as a viable alternative to a college degree. These include public-private partnerships between local businesses and nonprofits that provide vocational training to prepare students for well-paying jobs in Texas businesses.
Lastly, participants discussed how businesses and individuals can make a difference. This might include volunteering at a local school to read to or mentor a child, financially supporting early childhood literacy programs in your town, sponsoring a local tutoring program for at-risk youth, providing internships or simply inviting students to your business to learn about prospective career opportunities.
The responsibility for solving our education issues doesn’t just lie with educators and nonprofits. It falls to all of us. At the Dallas Fed, we plan to continue convening businesses and community leaders to discuss new and innovative ways to help upgrade the education of our children and highlight effective education initiatives. I invite you to get involved. Your efforts will make a difference to our city, our state and the nation.
Rob Kaplan is president and chief executive officer of the Federal Reserve Bank of Dallas
