From Educating the Individual to Retooling the Nation: The Critical Role of ABE Educators

Bruce P. Corrie, PhD Professor of Economics Concordia University-Saint Paul

2006 ABE Statewide Summer Institute Saint John’s University Funded by an Otto Bremer Grant

Overview

A New Paradigm The Emerging Challenge The Return on Investment in ABE A New Marshall Plan

ABE Educators: A New Vision

You are not just educating the individual You are retooling the nation and Minnesota in our new global competitive economy Your special focus on the low-skilled youth/worker is very critical for the nation’s and the Minnesota’s long term economic security and growth. This critical mass of people in the US and local economy need immediate attention else we will face serious problems in the years ahead.

A New Vision

The nation needs to develop strategies to retool the low wage low skill workforce in the face of global competition.

ABE programs play a very important role as they improve the skills of workers and in so doing, increase productivity in the workplace have a number of other social benefits, and raise the standard of living in local economies and national economies.

We need a new Marshall Plan to invest in this disenfranchised population.

Overview

Next slides will present Data on the number of low skilled workers Data on the declining need for low skilled workers in the USA by our firms Data on the challenges of an important pool of future workers in MN – immigrants and minorities Data on the effectiveness of ABE in meeting the challenges of our future workforce Data to illustrate how investing in our emerging workforce through ABE programs help to strengthen the economic base in MN.

The Challenge

1.9 million workers with wages at or below $5.15 an hour in the US 561 thousand without a high school degree 547 thousand high school without college 62, 800 thousand in Minnesota Source: CPS 2006, Census 2000 from DEED data for MN.

Challenge MN

In Minnesota, 30 percent of all workers or over 800,000 workers are low-wage workers. The proportion of low-wage workers in Greater Minnesota varies from a low of 35 percent in the Southeast region to a high of 46 percent in the Northwest Region.

(Less than $10 an hour)

http://www.deed.state.mn.us/lmi/publications/wagedist/98_00/region.htm

Who are low wage workers?

Are disproportionately - Young, female, minority, with a high school degree or less and with health limitations Characteristics of Low Wage Workers and their Labor Market Experiences. http://aspe.hhs.gov/hsp/low-wage workers04/ch7.htm

Challenge: Employers want higher skills

Large study which included Minnesota found employers reduced employment shares of low skilled workers and increased shares of high skilled workers in virtually every industry. Found a continuing up-skilling of the work force John Abowd, Paul Lengermann, Kevin L McKinney (2003), Measurement of Human Capital in the U.S. Economy. US Census, LEHD Program.

Challenge: Firms Need High Skills to Increase Productivity and Grow

Found that quality of the Human capital of the firm determined productivity and market value of the firm. Bowd J.A. et al (2002) The Relation among Human Capital, Productivity and Market Value: Building up from Micro Evidence. US Census, LEHD Program

Challenge: MN Population Crisis

According to both the MN State Demographer and the MN State Economist, MN is going to rely increasingly on migration to meet its labor needs because of an aging population.

Minorities/Immigrants – Increasing share of the Prime workforce 2005-2030

Workers 25-54 Years

120 100 80 60 40 20 0 75 Asian Source: MN State Demographer Population Projections 109 Hispanic

Minorities/Immigrants – Increasing share of the Tax Base 2005-2030

Growth in 45-54 Age Group

350 300 250 200 150 100 50 0 177 307 Asian Hispanic Source: MN State Demographer Population Projections

Minorities/Immigrants – Increasing share of the Emerging workforce 2005-2030 Percentage Growth in College Age Students

257.46

240 190 140 90 40 -10 -0.35

73.84

60.11

24.18

1

2000-2030

Data from MN State Demographer Projections 99.19

White Black Asian American Indian Two or More Latino

Many Minnesota Students Have Low Human Capital

Graduation Rates: 2002-2003

30 20 10 0 70 60 50 40 29 26 49 53 Am. Indian Asian 38 38 45 47 52 60 Black Hispanic White 2000 2003 Source: Minnesota Minority Education Partnership, 2006

Many Minnesota Students Have Low Human Capital

PSEO Students Perent AP Test Takers

1 7 4 2 Am. Indian Asian Black Hispanic White 0 7 2 2 87 86 Am. Indian Asian Black Hispanic White Source: Minnesota Minority Education Partnership, 2006

Human Capital of Minnesota

% Adults with no high school degree 9 % % Adults with high school degree % Adults with some college degree 29 % 32 % % Adults with college degree or higher 30 % Source: http://www.nccp.org/pdf/state_detail_context_MN.pdf

The Global View on Skills

US and Other Countries: Literacy Proficiency by Employment

300 250 200 150 100 50 0 US 19 High Income Countries Employed Unemployed Not if Labor Force

Employment Status

Source: Pathways to Labor Market Success. ETS, 2004

Role of ABE in Retooling MN

GED ELL Worker Training How effective are these programs?

Impact of GED

Leads to increase in earnings for high school dropouts with weak skills (36 percent for 27 year olds) Returns for postsecondary training is as high for GED as for traditional high school graduates Many other benefits such as increased literacy skills, more self confidence, better life skills.

Impact of Schooling on Crime

High school graduation rates results in a 0.8 percent reduction in the probability of incarceration from Whites and a 3.4 percent reduction for Blacks.

Impact of Schooling on Crime

One additional year of schooling reduces: Arrest rates by 11 percent Murder and assaults by 30 percent Motor Vehicle Theft by 20 percent Arson by 13 percent Net Benefit of $1.4 billion to the nation (However, increased rapes and robbery) Lance Lochner and Enrico Moretti, The Social Savings from Reducing Crimes through Education. Joint Center for Poverty Research http://www.jcpr.org/policybriefs/vol4_num5.html

Impact of Schooling on Children in Poverty

From 1984 to 2004 the number of children in poverty increased from 66 to 75 percent for families with parents with less than high school education It rose from 36 to 45 percent for parents with a high school diploma It remained at 17 percent for families with some college education National Center for Children in Poverty: http://www.nccp.org/pub_pei06.html

Literacy Proficiency and Employment

Literacy Proficiency and Unemployment Rate

12 10 8 2 0 6 4 10.2

5.1

4 2.4

Level 1 Level 2 Level 3

Literacy Proficiency

Level 4 or 5 Higher Proficiency = Lower Unemployment Source: Pathways to Labor Market Success. ETS, 2004

Prose Proficiency and Education

Prose Proficiency by Education

100% 80% 60% 40% 20% 0% 9-12 yrs GED HS PS

Educational Level

2yr 4yr Higher Education = Higher Literacy Proficiency Source: Pathways to Labor Market Success. ETS, 2004 Mean Level 5 Level 4 Level 3 Level 2 Level 1

Quantitative Proficiency and Earnings

1000 800 600 400 200 0

Quantitative Proficiency and Mean Weekly Earnings

913 330 438 533 634 Series1 Level 1 Level 2 Level 3 Level 4

Quantitative Proficiency

Level 5 Higher Quantitative Proficiency= Higher Earnings Source: Pathways to Labor Market Success. ETS, 2004

Immigrants, Lit Proficiency and Earnings

1200 1000 800 600 400 200 0

Mean Weekly Earnings by Literacy Proficiency

1108 792 520 448 632 552 318 364 Immigrants Native Born Level 1 Level 2 Level 3

Literacy Proficiency

Level 4 or 5 Higher Literacy Proficiency = Higher Earnings Source: Sum et al (2002). ETS

Premium for Speaking English

Premium for Speaking English Well

45000 40000 35000 30000 25000 20000 15000 10000 5000 0 8144 9991 11269 9674 19808 39106 H S no d ip lo ma H S or G ED 1-3 ye ars co lle As ge so ci at es D eg re e Ba ch el or' s de gre Ma e st er' s or hi gh er 24406 Al l Source: Sum et al (2002). ETS

Reasons for Taking GED

GED & Reasons

90 80 70 60 50 40 30 20 10 0 Source: National Adult Literacy Survey, 2005

Reason for Taking ELL

Reason for Taking ELL

100 80 60 40 20 0 44 45 56 60 67 15 95 93 Source: National Adult Literacy Survey, 2005

70 60 50 40 30 20 10 0

Low Skill = Low Training Participation

Training Participation

17.3

32.3

49 59.1

Level 1 Level 2 Level 3

Document Proficiency

Level 4 or 5

Returns to Schooling

Barrow and Rouse (2006) using data from the Current Population Survey find that each additional year of schooling results in a average increase in earnings by 11 percent

Immigrants

Each year of schooling completed by an immigrant adds 6.2 points to their predicted composite literacy proficiency score.

The earlier one began studying English, the higher his/her predicted proficiency score.

Education and Living Standards

According to the Economic Report of the President, 2006, studies have shown that during the period 1950-1993 one third of the economic growth in the country was due to increased levels of education

Higher Education = Lower Unemployment

4 3 2 1 0 9 8 7 6 5 0

Educational Levels and Unemployment

Less Than HS High School Some College Associate Degree Bachelor's Degree Masters Degree 2 4 6

Educational Level

Source: 2006 State of Students of Color. www.mnmep.org

8 10

Higher Education= Higher Income (US)

Education and Income

$120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Source: 2006 State of Students of Color. www.mnmep.org

So You Want to Be a Millionaire

4 1 0 3 2 White Black Asian Hispanic Advanced 3.1

2.5

3.1

2.6

Bachelor's Degree Associate's Degree 2.2

1.7

1.8

1.7

1.6

1.4

1.5

1.4

Some College 1.6

1.2

1.3

1.3

High School Grad Not High School 1.3

1 1.1

1.1

1.1

0.8

0.9

0.8

LIFETIME EARNINGS BY EDUCATIONAL LEVEL (Day & Newburger, 2002)

Retooling of Minorities in MN Adds to the Economic Base of Minnesota

More productive Workers Expands the consumer Base Increase Entrepreneurship Builds Cultural Capital Makes us competitive in the Global Economy

Consumer Base

According to the Selig Center Buying Power of minorities and immigrants is an estimated 12 billion dollars.

This is greater than the GDP of 90 countries in the world Higher skilled workers will have higher earnings and expand their consumer power in Minnesota

Workers

Minorities and immigrants are overrepresented in both the high skilled as well as low skilled occupations.

Improving the skills of these workers will add to the productivity of Minnesota

Black Workers in MN

Nuclear Engineers (151) SOC 17-2161 Taxi Drivers and Chauffeurs (914) SOC 53-3041 Hazardous Materials Removal Workers (672) SOC 47-4041 Cleaning, Washing, and Metal Pickling Equipment Operators and Tenders (886) SOC 51 9192 Aircraft Structure, Surfaces, Rigging, and Systems Assemblers (771) SOC 51-2011 Parking Lot Attendants (935) SOC 53-6021 Actors (270) SOC 27-2011 Nursing, Psychiatric, and Home Health Aides (360) SOC 31-1010 Credit Authorizers, Checkers, and Clerks (523) SOC 43-4041

Asian and Latino Workers

High Tech Medical Scientists Physicians and Surgeons Chemical Engineers Postsecondary Teachers Computers and Electronics Roofers Low Tech Food Preparation, processing Dining room and Cafeteria attendants Maids and Housekeeping Cleaners

Minority/Immigrant Firms

22,405 minority firms in Minnesota with $2.7 billion in sales. 3497 of these firms had employees employing 31, 474 people with an annual payroll of 819 million dollars.

Minority/Immigrant Firms

Minority firms in Minnesota grew by 44 percent during 1997-2002 as compared to a growth rate of 8 percent of all firms.

American Indian firms were 13th in the nation in terms of growth of firms during the same period.

Immigrant Firms on University Avenue in Saint Paul (1980, 1991 & 2005)

MN – Integrated with the Global Economy

MN Rank 2003, 2004 Export Volume, 2004 20 Exports (Latin & S. America) Exports (Asia) 15 Exports as Percent of GSP 23 Employment (Foreign Companies) 22 25

Cultural Capital is Important for Minnesota

Richard Florida and the rise of the Creative Class New case for diversity – brings creativity into an organization Minority food, art, culture, music, ideas, theatres adding vitality to Lake Wobegon

Summary

The nation needs to develop strategies to retool the low wage low skill workforce in the face of global competition.

ABE programs play a very important role as they improve the skills of workers and in so doing, increase productivity in the workplace and have a number of other social benefits.

Investing in Minorities and Immigrant communities will yield positive returns in the long run What we need is a new Marshall Plan to retool the nation’s low wage low skill workforce

Data on Characteristics of GED and ELL Learners

Characteristics of GED Population

GED: Percent of Adults

4 3 2 1 0 7 6 5 6 2 1 16-24 25-34 35-44 National Adult Literacy Survey, 2005 0 45-54 0 55-64

Characteristics of GED Population

3.5

3 2.5

2 1.5

1 0.5

0 1 White

GED: Minority Percentage

3 2 1 Black 1 Hispanic Asian PI Other, non HI

Characteristics of GED Population

GED by Income

2.5

2 1.5

1 0.5

0 2 2 20,000 and less 20,001 35,000 1 1 0 35,001 50,000 50,001-75000 75,000 and above National Adult Literacy Survey, 2005

Characteristics of GED Population

GED by Employment Status

7 6 5 4 3 2 1 0 1 2 6 Full Time Part Time UNE National Adult Literacy Survey, 2005 1 NLF

Characteristics of GED Population

GED by Occupation

2.5

2 1.5

1 0.5

0 Professional/Mgr Sales/service/tech Trade and Labor

Bruce P. Corrie, PhD Concordia University Saint Paul, MN 55117 [email protected]

Tel: 651 641 8226

GED by Occupation

2.5

2 1.5

1 0.5

0 Professional/Mgr Sales/service/tech Trade and Labor

Characteristics of ELL Population

ELL by Race/Ethnicity

Other, non HI 0 Asian PI Hispanic Black 0 White 0 0 1 2 2 3 4 5 6 6 7

Characteristics of ELL Population

2.5

2 1.5

1 0.5

0 Less HS HS

ELL by Education

Some College Bachelor's Graduate

Characteristics of ELL Population

ELL by Income

2.5

2 1.5

1 0.5

0 1 2 20,000 and less 20,001 35,000 2 1 35,001 50,000 0 50,001-75000 75,000 and above

Characteristics of ELL Population

ELL and Jobs

2.5

2 1.5

1 0.5

0 Full Time Part Time UNE and Looking Not in LF

Characteristics of ELL Population

ELL and Occupation

2.5

2 1.5

1 0.5

0 0 Professional/Mgr 1 Sales/service/tech 2 Trade and Labor