Colleagues,

The following post is from Tom Sticht.

Marie Cora
Assessment Discussion List Moderator

**********

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