Economic Woes Start In Seventh Grade

What do you do with the teenage years?

This parental conundrum also is one of the key questions facing the U.S. economy under a scenario outlined Thursday at the Gonzaga University 1996 Economics Symposium.

Discussing the reasons that worker productivity and inflation-adjusted wages have been stagnant in the United States since 1973, economist Barry Bosworth touched on the usual economic variables: investment in machinery and other physical capital, spending on research and development, and education.

But, he said, the economic problem at the center of discussion this election year - the growing gap between rich and poor - can be traced to a specific question: “What to do with students who are not intending to go to college in our American high school system?”

These students are at a profound disadvantage, Bosworth said, because U.S. schools are on a par with other industrial nations through sixth grade. And American universities and colleges are the best in the world.

“There’s a wide differential between what American and foreign students learn after sixth grade,” Bosworth said. Those who go to college narrow the gap significantly, he said, but the 50 percent who do not attend college are left without the skills they need to compete in a global economy.

That, in large part, explains why college graduates earn 60 percent more than U.S. workers who just finished high school, he said. In the late ‘70s, the differential was only 30 percent, he added.

Bosworth, a Brookings Institution fellow who is a visiting professor at Gonzaga, also criticized both the public and private sectors for making short-term decisions rather than saving and investing for the future.

In response to a question from one of the more than 600 attending the symposium, Bosworth said the only way to get Americans to save more may be to institute some type of mandatory savings plan.

Tax incentives don’t work, he said. “They just encourage people already saving to save more.”

Bosworth served in economic policy positions in the Johnson, Nixon and Carter administrations. He currently is at Gonzaga as the James R. Jundt Professor of Economics.

, DataTimes