World Teachers’ Day: Why education is key to economic growth
For World Teachers’ Day on Thursday, let’s celebrate all they do to make us a prosperous and literate global society.
With the economy at full employment and the stock market reaching new highs, will we hit another catastrophic recession or sustain this growth?
Judging by the current health of our education system, there is enough information to be worried that we could face hard times again. But increasing funding may be the way to avoid them.
Let’s take a deeper look: During the Great Recession, state revenues took a massive hit which led to deep spending cuts.
In 31 states, K-12 education budgets have fallen to below pre-recession levels. In 15 of those states, the cuts were as severe as 10%.
The pain didn’t stop at the state budgets, 18 states also reported cuts to K-12 schools at the municipal level.
The cuts to higher education were more widespread, with 47 states slashing funding for universities, vocational training schools and community colleges. On average, post-secondary institutions had to spend 20 percent less. Five states reported astonishing cuts of 35 percent.
As the economy bounced back from the recession, states are just catching up, yet education budgets overall are much lower than before 2008. This could present major problems in the near future.
There are studies which correlate an individual’s economic success with increased investment in their education and skills training. When people receive a good education, they are more likely to have a job, make more money and live longer.
When individuals are happy and working, economies thrive and grow. But with less money invested in today’s kids, they are not being set up for success for their future and ours collectively.
We are potentially losing out on trillions of dollars in GDP growth if things stayed the same.
For example, the National Bureau of Economic Research says that if we boosted all U.S. students’ basic skills, we could grow the GDP 14.6% by 2095. That’s an increase of $32 trillion.
Furthermore, if we matched U.S. students’ skills-based performance to Finnish students, our GDP would grow 42.6%, adding $89.6 trillion to the economy in one generation.
$89 trillion is a huge number and the tax revenues from this growth would go far to cover our national obligations.
Here’s a sample of what policymakers could do with that extra dough (without adjusting for inflation):
- In 2015, college students paid $70 billion to public institutions. We could send every student to college for free for the next 120 years.
- Our ailing infrastructure could be fixed 40 times over.
- Medicare and Medicaid could be funded for the next 74 years
- If our current federal budget stayed the same at $3.9 trillion, it would be covered for the next 22 years.
Simply put, the investment we make in our schools and improving students’ skills pays off in the long run. We might not see the fruits of this in our lifetime, but our children and our children’s children will remember.
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