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America's Choice: High Skills or Low Wages! TheReport of the Commission on the Skills of theAmerican Wr,Kforce.National Center on Education and the Economy,Rochester, NY.ISBN-0-9627063-0-2Jun 90209p.

publications Order Selvice, National Center onEducation and the Economy, P.O. Box 10670, Rochester,NY 14610 ($18.00; 10 or more: $15.00 each).Reports Research/Technical (143)

mFo1/Pco9 Plus Postage.Certification; Competitioo; *Corporate Education;Education Work Relationship; *EmploymentQualifications; *Entry Workers; Job Development;*Labor Force Development; Organizational Development;*Productivity; *School Business Relationship;Standards; Transitional Programs

IDENTIFIERS *Certificate of Initial Mastery

ABSTRACTWork force growth will slow dramatically in the

1990s. To ensure a more prosperous future, productivity andcompetitive position must be improvec. New high performance forms ofwork organization operate very differently from the system of massmanufacturing. These work organizaticms require large investments intraining. The approach to work and edlcation must fundamentallychange. Recommendations include the following: (1) a new educationalperformance standard should be set for all students, to be met by age16, with the standard established nationally and benchmarked to thehighest in the world; (2) states should take the responsibility forassuring that virtually all students achieve the Certificate ofInitial Mastery (CIM), with new local Employment and Training Boardscreating and funding alternative learning environments for those whocannot attain the CIM in regular schools; (3) a comprehensive systemof Technical and Professional Certificates and associate's degreesshould be created for the majority of students and adult workers whodo not pursue a baccalaureate degree; (4) all employers should begiven incentives and assistance to invest in the further educationand training of their workers and to pursue high productivity formsof work organization; and (5) a system of Employment and TrainingBoards should be established by federal and state governments,together with local leadership, to organize and oversee the newschool-to-work transition programs and training systems. (CML)

* Reproductions supplied by EDRS are the best that can be made* from the original document.

r A

Meas.

low°Tvages!

The Report of

The Commission on the Skills of the American Workforce

June 1990

NATIONALCENTER

ONEDUCATION

AND THEECONVMY

01,11ipyright © 1990 by the National Center onEducation and the Fconomy

ISBN 0-9627063-0-2

All rights reserved. Brief quotations from this reportmay be reproduced without restriction, provided thatacknowledgement is given as follows.

This Report was prepared by theNational Center on Education and the Economy'sCommission on the Skills qf tbe AmericanWorkforce.

Larger portions of this publicatkm may not be repro-duced without permission of the National Center onEducation and the Economy.

An order form for this report, its supporting works andadditional reports and papers available from theNational Center on Education and the Economy can befound at the end

5

The National Center on Educationand tbe Economy

The National Center on Education and the Economy isa not-for-profit organization created to developproposals for building the world class education andtraining system that the United States must have if it isto have a world class economy. The Center engagesin policy analysis and development and workscollaboratively with others at local, state and nationallevels to advance its proposals in the policy arena.

National Center on Educationand the Economy

39 State StreetSuite 500Rochester, New York 14614716/546-7620FAX: 716/546-3145

iii6

COMMISSION ON THESKILLS OF THE AMERICANWORKFORCE

Ira C. Magaziner, ChairPresidentSJS, Inc.

William E. Brock, Co-ChairSenior PartnerThe Brock GroupFormer SecretaryU.S. Department of Labor

Ray Mare-all, Co-C'hairChair in Economics and Public AffairsL.B.J. School of Public AffairsUniversity of Texas at AustinFormer SecretaryU.S. Department of Labor

Robert M. AtkinsonDirector of Academic ProgramsSchool of Business and IndustryFlorida A & M University

Owen BieberPresidentUnited Automobile Workers

Edward J. CarioughGeneral PresidentSheet Metal Workers' International

Association

Aathony P. CarnevaleVice President of National Affairs

and Chief EconomistAmerican Society for Training

and Development

Paul J. Choquette, Jr.President and Chief Executive OfficerGilbane Building Company

V

Richard CohonPresidentC. N. Burman Company

Badi G. FosterPresidentAEtna Institute for Corporate Education

Thomas GonzalesChancellorSeattle Community College District VI

Rear Admiral W. J. Holland, Jr., USN (Retired)PresictentEducational FoundationArmed Forces Communications and

Education Association

James R. Houghtor_Chairman of the Board and

Chief Executive OfficerComing Incorporated

James B. Hunt, Jr.PartnerPoyner & SpruillFormer GovernorState of North Carolina

John R. HurleyVice Prtysident and DirectorCorporate Training and Educational

ResourcesThe Chase Manhattan Bank

John E. JacobPresident and Chief Executive OfficerNational Urban League, Inc.

The Commission

Thomas H. KeanPresidentDrew UniversityFormer GovernorState of New Jersey

William H. KolbergPresidentNational Alliance of Business

William LucyInternational Secretary/TreasureiAmerican Federation of State,

County and Municipal Employees, AFL-CIO

Margaret LA. Mac VicarDean for Undergraduate Education

and ProfessorMassachusetts Institute of Technology

Eleanor Holmes NortonProfessor of LawGeorgetown University Law CenterFormer Chairwoman of the Equal

Employment Opportunity Commission

Karen NussbaumExecutive Director9to5, National Association of

Working Women

Peter). Pesti lloVice PresidentCorporate Relations and Diversified

BusinessesFord Motor Company

Philip H. PowerChairmanSi iburban Communications Corporation

Lauren B. ResnickDirectorLearning Research and Development CenterUniversity of Pittsburgh

Mt Commission8

Kje ll-Jon RyeTeacherBellevue (WA) Public Schools

Howard D. SamuelPresidentIndustrial Union DepartmentAFL-CIO

John SculleyChairman, President and

Chief Executive OfficerApple Computer, Inc.

William). SpringVice PresidentDistrict Community AffairsFederal Reserve Bank of Boston

Anthony). TrujilloSuperintendentSweetwater Union (CA) High School District

Marc S. TuckerPresidentNational Center ori Education

and the Economy

Laura D'Andrea TysonDirector of ResearchBerkeley Roundtable on the

International EconomyUniversity of California at Berkeley

Kay R. WhitmoreChairman, President, and

Chief Executive OfficerEastman Kodak Company

Alan L WurtzelChairman of the Boa idCircuit City Stores, Inc.

vi

Signatories

Ira C. Magaziner, Chair

William E. Brock, Co-Chair Ray Marshall, Co-Chair

Robert NI. Atkinson

Edward J. Carlough

67a-ft 0,-..y.,14Paul .1 Choquette. Jr

grglABach G Foster

Owen Bieber

Anthony P. Carnevale

'7:a.....t aI

Richard Cohon

c):~11Thomas gonzaks

9Signalorm

W. J. Holland, Jr. James R. Houghton

9-1447 i41we

James B. Hunt, Jr. John R. Hurley

John E. Jacob

lidWilliam H. Kolberg

Margaret L. A. MacVicar

eLAIN1/4-°'

Karen Nussbaum

Philip H. Power

Ssgnatorses1 0

Thomas H. Kean

4,41111011.

Eleanor Holmes Norton

dogritoPeter J. Pestillo

Lauren B. Resnick

viii

Kiel lion Rye

John Sculley

7----ze

Howard D. Samuel

aide:~ +4(411-)William J. Spring

01 c,./ikeiruo---7'rov%Anthony J. Trujillo Laura D'Andrea Tyson

Marc S. Tucker

4 gr.Alan L. Wurtzel

P

ix

Kay R. Whitmore

11 Signatories

TABLE OF CONTENTS

Executive Summary

Preface

The Report

Chapter 1: The Problem

Chapter 2: Is There A Skills Shortage?

Chapter 3: America's Workers:Disposable Resource OrCompetitive Advantage?

Chapter 4: The Organization Of WorkIn America

Chapter 5: How We Prepare OurChildren For Work

Chapter 6: The Education And TrainingOf America's Adult Workers

Chapter 7: Voices From Abroad

Chapter 8: The Choice

Chapter 9: .The Foundation Skills

Chapter 10: Universal Mastery OfThe Foundation Skills

Chapter 11: Technical And ProfessionalEducation

Chapter 12: Lifelong Learning AndHigh PerformanceWork Organizations

Chapter 13: And A System ToPull It Together

Chapter 14: In Conclusion

XI

1 The Study

13 Supporting Information19 I. A New American Assessment

19 For Foundation Skills

23

31

95

99

99

II. Alternative Programs For At-Risk 105Youth: Sweetwater Union HighSchool, The Boston Compact AndThe Wegman's Program

III. American Examples Of Successful 10937 Worker Training

IV. Skills Investment Taxes: Foreign 11543 Examples

V. Financing Our Proposals 119

Acknowledgments 129

Appendices 133

National Center on Education 133and the EconomyBoard of Trustees

Commission on the Skills of the 135American Workforce

77 Biographical Sketches

Commission on the Skills of the 145American WorkforceAssociates

Commission on the Skills of the 146American WorkforceCase Study Research Team and Staff

Publications Order Form

49

57

67

69

71

81

87

91 149

,*

tie.

EXECUTIVE SUMMARY

The ProblemSince 1969, real average weekly earnings inthe United States have fallen by more than12 percent. This burden has been sharedunequally. The incomes of our top 30percent of earners increased while those ofthe other 70 percent spiraled downward.

In many families, it now takes twopeople working to make ends meet, whereone was sufficient in the past.

The United States is in the midst of thesecond longest economic expansion in itshistory. But that expansion is built largelyon the fact that 50 percent of our populationis employed compared with 40 percent in1973. Forty million new i,obs were createdas the 'baby boom' generation reachedworking age, and more women entered theworkforce. More of us have been workingso we produced more.

However. workforce growth will skrivdramatically in the 1990s. We can no longergrow substantially just by adding newworkers.

The key to maintaining, to say nothingof improving, our standard of living isproductivity growth more products andservices from every member of theworkforce.

i

But, during the past two decades, ourproductivity growth has slowed to a crawl. Itnow takes nearly three years to achieve thesame productivity improvement we used toachieve in one year.

If productivity continues to falter, wecan expect one of two futures. Either thetop 30 percent of our population will growwealthier while the bottom 70 percentbecomes progressively poorer or we all slideinto relative poverty together.

The TaskTo ensure a more prosperous future, wemust improve productivity and ourcompetitive position. We cannot simply dothis by using better machinery, because lowwage countries can now use the samemachines and can still sell their productsmore cheaply than we can.

The key to productivity improvementfor a high wage nation lies in the thirdindustrial revolution now taking place in theworld. The steam engine and electric motordrove the first two industrial revolutions,causing profound changes in work organiza-tion. This boosted productivity, quality andliving standards dramatically. The creationof the modem factory in the 1800's and massproduction in the 1900's followed thesetechnology breakthroughs.

Executive Su mmaty

The advent of the computer, high speedcommunication and universal education areheralding a third industrial revolution, arevolution the key feature of which is highperformance work organization.

The Organization Of Work InAmericaThe organization of America's workplacestoday is largely modeled after the system ofmass manufacture pioneered dunng the early1900's. The premise is simple: Breakcomplex jobs into a myriad of simple rotetask.. which the worker then repeats withmachine-like efficiency.

The system is managed by a smallgroup of educated planners and supervisorswho do the thinking for the organization.They plan strategy, implement changes,motivate the workers and solve problems.Extensive administrative procedures allowmanagers to keep control of a large numberof workers. This form of work organizationis often referred to as the *Taylor' model.

Most employees under this model neednot be educated. It is far more importantthat they be reliable, steady and willing tofollow directions.

But in the world's best companies,new I- 'An performance work organizationsare replacing this 'Taylor' method. Thesecompanies are using a new approach to

I

Executim Summar

5

unleash malor advances in productivity,quality, variety and speed of new productintroductions.

Mass production methods will continueto produce high volume, inexpensive goodsand services for a long time to come. Butwhat the world is prepared to pay highprices and high wages for now is quality,variety and responsiveness to changingconsumer tastes, the very qualities that thenew methods of organizing work makepossible.

'Tayloristic' methods are not well suitedto these goals. Firms struggling to apply thetraditional methods of work organization tomore complex technologies, more frequentproduct introductions, increased qualityrequiremems and proliferating productvariety often create cumbersome and ineffi-cient bureaccracies.

The new high performance forms ofwork organization operate very differently.Rather than increasing bureaucracy,_ theyreduce h by giving front-line workers moreresponsibility. Workers are asked to usejudgment and make decisions. Managementlayers disappear as front-line workers as-sume responsibility for many of the tasksfrom quality control to production schedul-ing that others used to do.

2

Work organizations like these requirelarge investments in training. Workers' pay:t-vels often rise to reflect their greaterqualifications and responsibilities. But theproductivity and quality gains more thanoffset the costs to the company of higherwages and skills development.

Despite these advantages, 95 percent ofAmerican companies still cling to old formsof work organization.

Is There A Skills Shortage In TheUnited States?Because most American employers organizework in a way that does not require highskills, they report no shortage of people whohave such skills and foresee no such short-age. With some exceptions. the educationand skill levels of American workers roughlymatch the demands of their jobs.

Our research did reveal a wide rangeof concerns covered under the blanket termof 'skills.' While businesses everywherecomplained al)out the quality of their appli-cants, few talked about the kinds of skillsacquired in school. The primary concern ofmore than 80 percent of employers wasfinding workers with a good work ethic andappropriate social behavior: 'reliable,' 'agood attitude. 'a pleasant appearance,' 'agood personality.'

Most employers we interviewed do notexpect their skill requirements to change.Despite the widespread presumption thatadvancing technology and the evolving

3

service economy will create jobs demandinghigher skills, only five percent of employerswere concerned about a skills shortage.These were mainly large manufacturers,financial service organizations and communi-cations companies.

The reason we have no skills shortagetoday is that we are using a turn-of-the-century work organization. If we want tocompete more effectively in the globaleconomy, we will have to move to a highproductivity work organization.

How We Prepare Our Front-LineWorkers For WorkMore than 70 percent of the jobs in Americawill not require a college education by theyear 2000. These jobs are the backbone ofour economy, and the productivity of work-ers in these jobs will make or break oureconomic future.

No nation has produced a highlyqualified technical workforce without firstproviding its workers with a strong generaleducation. But our children rank at thel)ottom on most international tests behindchildren in Europe and East Asia, evenbehind children in some newly industrializedcountries.

More than any other country in theworld, the United States believes that naturalability, rather than effort, explains achieve-ment. The tragedy is that we communicate

1 6 Executive Summary

to millions of students every year, especiallyto low-income and minority students, thatwe do not believe that they have what ittakes to learn. They then live up to ourexpectations, despite the evidence that theycan r2.eet vety high performance standardsunder the right conditions.

Unlike virtually all of our leading com-petitors, we have no national system capableof setting high academic standards for thenon-college bound or of assessing theirachievement against those standards.

America may have the worst school-to-work transition system of any advancedindustrial country. Students who know fewadults to help them get their first job are leftto sink or swim.

Only eight percent of our front-lineworkers receive any formal training once onthe job, and this is usually limited to orienta-tion for new hires or short courses on teambuilding or safety.

The American post-secondary educationand training ,:ystem was never designed tomeet the needs of our front-line workers.The system is a combination of educationprograms for full-time college students andshort term training for the severely disadvan-taged. and can be difficult to access. Be-cause employers have not set training stan-dards, few studeli's can be sure that there isa market for the courses they pursue. Edu-cation is rarely connected to training andboth are rarely connected to an effective jobservice function.

Ewc Mill! Summary 1 7

Anotfier WayWhile the foreign nations we studied differin economy and culture, they share anapproach to the education and training oftheir workers and to high productivity workorganiration.

They insist that virtually all of their stu-dents reach a high educational standard.We do not.

They provide 'professionalized' educationto non-college bound students to preparethem for their trades and to ease theirschool-to-work transition. We do not.

They operate comprehensive labor marketsystems which combine training, labormarket information, job search andincome maintenance for the unemployed.We do not.

They support company based trainingthrough general revenue or payroll taxbased financing schemes. We do not.

They have national consensus on theimportance of moving to high productivityforms of work organization and buildinghigh wage economies. We do not.

Our approaches have served us well inthe past. They will not serve us well in thefuture.

4

The ChokeAmericans are unwittingly making a choice.kis a choice that most of us would probablynot make were we aware of its conse-quences. Yet every day, that choice isbecoming more difficult to reverse. It is achoice which undermines the Americandream of economic opportunity for all. It isa choice that will lead to an America where30 percent of our people may do well atleast for awhile but the other 70 percentwill see their dreams slip away.

The choice that America faces is achoice between high skills and low wages.Gradually, silently, we are choosing lowwages.

We still have time to make the otherchoice one that will lead us to a moreprosperous future. To make this choice, wemust fundamentally change our approach towork and education.

1. Problem: Two factors stand in the wayof producing a highly educated workforce:We lack a clear standard of achievement andfew students are motivated to work hard inschool. One reason that students going rightto work after school have little motivation tostudy hard is that they see little or no rela-tionship between how well they do inschool and what kind of job they can getafter school. Other advanced industrialnations have stringent prformance standardsthat virtually all students must meet at aboutage 16 and that directly affect their employ-ment prospects.

5

Recommendation: A new educationalperfbrinance standard should be set for

students, to be met by ate 16 Thisstandard shoals, be estabashed nation-ally and bespcbmarbed to tbe bftbestthe world.

We propose that all American studentsmeet a national standard of educationalexcellence by age 16, or soon thereafter.Students passing a series of performancebased assessments that incorporate thestandaid would be awarded a Certificate ofInitial Mastery.

' Possession of the Certificate of InitialMastery would qualify the student to chooseamong going to work, entering a collegepreparatory progranl or studying for aTechnical and Professional Certificate,described below.

Creation of the Certificate of InitialMastery standard would require a newapproach to student performance assess-ment. We recommend the creation of newperformance based examinations for whichstudents can explicitly prepare. The assess-ment system would provide multiple oppor-tunities for success rather than a single highstakes moment of possible failure. Mostimportant, the examination, though set at avery high standard, is not intended as asorting mechanism on the pattern of virtuallyall the major tests now in use. Our goal is to

1 8 Evecullve Summary

set a tough standard that almost everyonewill reach, although not all at the same time.

Once created, this system would estab-lish objective standards for students andeiucators, motivate students and give em-ployers an objective means to evaluate theaccomplishments of students.

2. Probleim More than 20 percent of ourstudents drop out of high school almost50 percent in many of our inner cities.Thtse dropouts go on to make up more thanone third of our front-line workforce. Turn-ing our backs on those dropouts, as we donow, is tantamount to turning our backs onour future workforce.

Recommendation: Tbe states shouldtake responsibility for assaring thatvirtually all students achieve tbe Certifi-cate of hoitial Mastery. Through tbe newlocal Employment and Training Boards,states, with federal assistance, shouldcreate and fund akernative learningenviromnents for tbose wbo cannotattain the Certificate of initial Masteryin regular schools.

All student; should be guaranteed theeducational attention necessary to attain theCertificate of Initial Mastery by age 16, or assoon as possible thereafter. Youth Centersshoukl be established to enroll schooldropouts and help them reach that standard.

9

Federal, state and local funds should beraised oi reallocated to finance these drop-out recovery programs. Once the YouthCenters are created, children should not bepermitted to work before the age of 18unless they have attained the Certificate ofIntal Mastery or are enrolled in a programto attain it.

3. Probkm: Other industrial nations havemulti-year career-oriented educationalprograms that prepare students to operate ata professional level in the workplace.Graduates of these programs have the skillsto hit the ground running whcn they gettheir first full-time job at age 19 or 20.America prepares only a tiny fraction of itsnon-college bound students for work. As aresult, most flounder in the labor market,moving from low paying job to low payingjob until their mid-twenties, never beingseriously trained.

Recommendation: A comprehensivesystem of Technical andivrofess-WWitCertificates and associate's degteesshould be created for tbe majority ofour students and adult workers wbo donot pursue a baccalaureate degree.

Technical and Professional Certificateswould be offered across the entire range ofservice and manufacturing occupations. Astudent could earn the entry-level occupationspecific certificate after completing a two- tofour-year program of combined work and

Eveciiniv Sit tummy 6

study, depending upon the field. A se-quence of advanced certificates, attesting tomastery of more complex skills, would beavailable and could be obtained throughoutone's career.

The Secretary of Labor should convenenational committees of business, labor,education and public representatives todefine certification standards for two- tofour-year programs of professional prepara-tion in a broad range of occupations. Theseprograms should combine general educationwith specific occupational skills and shouldindude a significant work mponent.

Students could pursue these programsat a wide variety of institutions accredited tooffer them, including high schools, commu-nity colleges and proprietary schools. Thesystem should lx designed to make it pos-sible for students to move easily between theCertificate programs and college.

A means should be established toensure that all students can receive financingto pursue these programs.

4. Problem: The vast majority of Americanemployers are not moving to high perform-ance work organizations, nor are theyinvesting to triin their non-managerialemployees for these new work organiza-tions. The movement to high performancework organizations is more widespread in

other nations, and training of front-lineworkers, funded in pan by national assess-ments on employers or general publicrevenues, is commonplace.-

Recommendationt Al entployers shouldbe Ono goottetres and assistottat toinvest hi the ftwthor oikocation andtraining q f tbotr workers and to pontoebigb productivity Arms qf work orgassi-=Hos

We piopose a system whereby allemployers will invest at least one percent oftheir payroll for the education and training oftheir workers. Those who do not wish toparticipate would contribute the one percentto a general training fund, to be used bystates to upgrade worker skills. We furtherrecommend that public technical assistancebe provided to companies, particularly smallbusinesses, to assist them in moving tohigher performance work organizations.

5. Problem: The United States is not wellorganized to provide the highly skilkdworkers needed to support the emerginghigh performance work organizations.Public policy on worker training has beenlargely passive, except for the needs of asmall portion of the severely disadvantagedpopulation. The training system is frag-mented with respect to policies, administra-tion and service delivery.

Evearrive Summary.

Recommendation: A system of Employ-ment anti &Make Boards Mould beestadoNsiarAby ~era/ and-itatiegnithirit-:meats, twitter witb local leadersbip, toorganise and oversee tbe new scbooko-work trattsition program and trainingsystems see Ce A,

We envision a new, more comprehen-sive system where skills development andupgrading for the majority of our workersbecomes a central aim of public policy.

The key to accomplishing these goals isfinding a way to enable the leaders of ourcommunities to take responsibility for build-ing a comprehensive system that meets theirneeds. The local Employment and TrainingBoards for each major labor market would:

Take responsibility for the school-to-workand Youth Center-to-work transition foryoung people.

Manage and oversee the Youth Centers.

Manage and oversee a 'second chance'system for adults seeking the Certifi( ate ofInitial Mastery.

Manage and oversee the system for award-ing Technical and Professional Certificatesat the local level.

Manage a labor market informationsystem.

Manage and oversee the job service.

Coordinate existing programs.

Kva nave Su nunwy 21

The states would need to create aparallel structure to support tbel9citl,Upgr4,

kiieWkielUriCtions and establishstate standards for their operation.

In ConclusionAmerica is headed toward an economic cliff.We will no fdriger be-able tn,put,atigbeK,,proportion of our people to work togenerate economic growth. If basicchanges are not made, real wages willcontinue to fall, especially for the majoritywho do not graduate from four-yearcolleges. The gap between economic 'haves'and 'have nots' will widen still further andsocial tensions will deepen.

Our recommendations provide analternative for America. We do not pretendthat this vision will he easily accepted orquickly implemented. But we also cannotpretend that the status quo is an option. It isno longer possible to be a high wage, lowskill nation. We have choices to make:

Do we continue to define educationalsuccess as 'time in the seat,' or choose anew system that focuses on the demon-strated achievement of high standards?

Do we continue to provide little incentivefor non-college bound students to studyhard and take tough subjects, or choose asystem that will reward real effort withbetter pay and better jobs?

8

Do we continue to turn our backs onAmerica's school dropouts, or choose totake responsibility for educating them?

Do we continue to provide unskilledworkers for unskilled jobs. or train sl" xlworkers and give companies incentivLs todeploy them in high performance workOrganizations?

Do we continue in most companies tolimit training to a select handful of manag-ers and profesionals. or choose to providetraining to front-hne workers as well?

Do we cling to a public employment andtraining system fragmented by institutionalharriers, muddled by overlapping bu-reaucracies and operating at the margins ofthe labor markt,. or do we choose aunified system that addresses itself to amaiority of workers?

Do we continue to remain indifferent tothe low wage path being chosen by manycompanies, or do we provide incentivesfor high productivity choices?

Taken tc)gether. the Commission'srecommendations provide the framework fordeveloping a high quality American educa-tion am. training system, closely linked tohigh performance work organimtions. Thesystem we propose provides a uniquelyAmerican solution. Boldly executed, it hasthe potential not simply to put us on an

9

equal footing with our competitors, but toallow us to leap ahead, to build the world'spremier work te. In so doing, we willcreate a form.. ie competitive advantage.

The status quo is not an'option. Thechoice we have is to become a nation ofhigh sk;lls or one of low wages.

The choice is ours. It should be clear.It must be made.

22 Executive Summary

PREFACE

The three of us who chair this Commissionhave grown increasingly uneasy as we havewatched Singapore. Taiwan and Korea growfrom run-down Third World outposts toworld premier exporters; as Germany, withone quarter of our population, almostequaled us in exports; as Japan became theworld's economic juggernaut; and, as Americabecame the world's biggest borrower.

As all this happened, we heard theexcuses: The countries we beat in the Sec-ond World War are simply regaining theirformer place in the world. The Europeansand the Japanese are exploiting their lowwages. Our competitors are class-riddencountries.

The truth is otherwise: Our formeradversaries are doing far better n relation tous than they did before the war. A dozennations now pay wages above ours. Ourdistribution of income is more skewed thanany of our major competitors and our povertyrate is much higher.

Our education statistics are as disap-pointing as our trade statistics. Our childrenrank at the bottom on most international tests

behind children in Europe and East Asia.Again, we the excuses: They have elite

systems, but we educate everyone. Theycompare a small number of their best to ourmuch larger average.

The facts are otherwise: Many of thecountries with the highest test scores havemore of their students in school than we do.

The apologists say it is unfair to com-pare their scores to ours because we musteducate a diverse population, while theirstudent bodies are homogeneous. This isthe most disturbing excuse of all. Do wereally believe that Black, Hispanic andimmigrant children can't be educated to thesame standard as Whites? Whites are adeclining percentage of our youth. If webow to this excuse, we are giving up onAmerica.

But isn't this America-bashing? Don'twe have firms in America as competitive asany in the world? Don't we have schools asgood as those in any country? Isn't it truethat .ve are in the midst Of one of the longesteconomic expansions this country has everhad?

Sure, but we are not facing the factsabout our future.

What we are facing is an economic cliffof sorts. And the front-line working peopleof America are about to fall off it.

2 :Le

From the 1950's to the 1970's, Arr :rica'sproductivity grew at a healthy pace. Thenation was getting richer, and workers livedbetter on what they earned.

Since then, the rate of increase inproductivity has dropped dramatically. Thedistribution of income in the United Stateshas been worsening. Those with collegedegrees are prospering, but the front-lineworkers have seen the buying power of theirpaychecks shrink year after year.

To be sure, the economy has grown.But that growth came from the fact that moreof us have been working. During the 1980'sa higher percentage of Americans wereworking than at any time in this century.The 'baby boom' generation came into theworkforce and many women went to workto maintain family incomes at their formerlevels.

In addition, the country has beenborrowing at unprecedented levels to main-tain national income. We underinvested in.,r infrastructure and allowed it to deterio-

rate. As a result, many of us are living aswell as we did, but we are living on bor-rowed money and borrowed time.

What happens now? In the future, wecannot grow our economy by putting morepeople to work, as we have done for 30years. Fewer people are entering theworkforce. and few , - still will enter in theyears ahead. We must grow by having every

25Pre/ at e

America-1 worker produce more. If wedon't, our incomes will go into a free fall withno end in sight.

That is the economic cliff we face.

To avoid falling off, many policychanges are needed, but one thing is certain:we must work .nore productively and bemore competitive. We cannot do this simplyby using better machinery, because low wagecountries can now use the same machinesand still sell their products more cheaply thanwe can.

We can do this only by mobilizing ourmost vital asset, the skills of our peoplenot just the 30 percent who will graduatefrom college, but the front-line workers, thepeople who serve as bank tellers, farmworkers, truck drivers, retail clerks, data entryoperators, laborers and factory workers.

We can do this only by reorganizing theway we work in our stores and factories, inour warehouses and insurance offices, and inour government agencies and hospitals. Wecan give much more responsibility to ourfront-line workers, educate them well andtrain them to do more highly skilled jobs.

By doing this, we streamline work.Many fewer supervisors, fewer quality check-ers, fewer production schedulers and fewermaintenance people are needed, so organiza-tions become more efficient. Because theyare more efficient. they can sell more. Be-

14

cause they can sell more, they can expand.Because they can expand, they can employmore people. Although each operationrequires fewer people, society as,a,wholecan increase employment and wages can goup.

Our most formidable internationalcompetitors are doing just this. For the mostpart, we are not.

We still have a robust economy. Someof our firms are among the best run in theworld. They learned how to organize forhigh productivity. If many more do so, andwe make the required investment in skills forour front-line workers, this country will havea very bright future. If not, our incomes willdecline at an accelerated pace.

This is our choice: high skills or lowwages.

Bill BrockCo-Chair

Ira C. MagazinerChair

Ray MarshallCo-Chair

15 2 6 Preface

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THE PROBLEMOver the past two decades, our productivitygrowth-has slowed to a craw1,-our incomeshave stagnated and the wage gap has wid-ened between our nation's educationalshaves' and have nots.'

From 1960 to 1973, American private,nonagricultural workers each produced anaverage of 2.9 percent more every year thanthe year before. Since 1973, it has takennearly three years to achieve the sameproductivity improvement gained in one pre-1973 year.

Our economy has grown because wenow have 50 percent of our people workinginstead of 40 percent as in 1973. We added40 million new jobs. More of us have beenworking, so we have produced more.

Because our economic growth has notcome from improved productivity, however,our wages have not improved. In fact, realaverage weekly earnings have dropped morethan 12 percent since 1969.

These hardships have not been borneequally by all Americans:

The highest earning 30 percent of Ameri-can families increased their share ofnational income from 54 percent in 1967to 58 percent in 1987, while the bottom 70percent have been losing ground.

19

The WcOndinit-CIREA Few Of Us Are Getting Richer,But Most Of Us Are Losing Ground

58

55%C,11111°11.1111461:4

46

45%

42

1967 1987Distribution of income in the United States1967-1987

Source: Bureau of the Census

P8 The Problem

Over the past 15 years, the earnings gapbetween white collar professionals andskilled tradespeople has gone from twopercent to 37 percent; the gap betweenprofessionals and clerical workers hasgone from 47 percent to 86 percent.

Over the past decade, earnings of college-educated males age 24 to 34 increased by10 percent. Earnings of those with onlyhigh-school diplomas declined by ninepercent. And those in the workforce whodo not hold high-school diplomas sawtheir real incomes drop by 12 percent.

Over 60 percent of White families haveincomes over $25,000 per year, comparedwith only 49 percent of Hispanic familiesand 36 percent of Black families. Thepoverty rate for Black families is nearlythree times that for Whites, and the gaphas been widening.

One in five American children onethird of our future front-line workforceIs born into poverty.

9

11w Pros, em

The More Education You Have,The More Money You Earn

aria ,

0 Men 24-340 Women 24-34

li 015

410%

2

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IASI.

LI.s

-12

HJ 11+11 +11 fft

SChanges in Earningsby Education Level1979-1987

Source: fducation & IncomtUagssgtnal&Levy & Mkbel

20

What The Future HoldsOur population in the 1990's is likely togrow at about eight percent, a slower ratethan for any period since the 1950's. Thiscompares to a 1970's growth rate of 20percent and a 1980's rate of 11 percent.Over 40 percent of new workforce entrantswill be minorities and immigrants, groupswhich are at disproportionately low incomelevels tmlay.

25%

The Economic Cliff:Workforce Growth Is Slowing

0 Aduk Populationlibrkforce

1615

61

11

1960's 1970's 1980's 1990's(Estimated)

''.owth of Adult Populationr -kforce

gu efLabor Statistics

We can no longer depend upon morepeople working to give us economic growth.If productivity continues to falter, and realwages decline, we can expect one of twofuturcb. Either the top 30 percent of ourpopulation grows wealthier while the bottom70 percent becomes progressively poorer orwe may ail slide into relative poverty to-gether.

$350

$300

$250

The Economic CliffsEarnings Are Declining

1949 1959 1969 1979 1989Average Weekly EarningsTotal Private Non-Agrkultural Workforce(1989 Dollars)

Sources Bureau of Labor Statistics

30 7he Problem

To choose a more prosperous futun. ,we must improve productivity. As we shallsee, this will require major changes in theway we organize our workplaces, and amajor investment in the skills of our people.

60%

50%

40%

130%

20%

10%

01960-73 1973-09

% Growth for Two Periods Since 1960

The Emma, erhmBecause More Are-Worlds*

4.111111111111111111111111 52

veasge

29

32

9

Sources: Bureau of Economic AnalysisBureau of labor Statistics

31

Me Pmblem 20

IS THERE A SKILLSSKORTAGE?

A front-page series in The Neu, York Timeslast September foretold an impending crisisin our national workforce. David Kearns,Chairman of Xerox Corporation, described"the makings of a national disaster." FormerChairman of Procter & Gamble Brad Butlerpredicted the creation of -a Third Worldwithin our country." And James Burke.Chief Executive Officei of Johnson & John-son, lamented "the American dream twnednightmare."

Strong language is not new to thedebate over the American skills crisis. Sincethe release of the Workforce 2(X)0 report in1987. the attention of our nation's businessand education communities, and increasinglyof our governments, has focused on theproblem of the mismatch of skills to jobs.

Companies are sounding the alarm.Telephone sales jobs are going begging inBoston because MCI cannot find qualifiedworkers; textile workers are no longer ableto operate their computerized machines; andaircraft manufacturers in California haveteamed up out of necessity to train employ-ees. Companies such as New York Tele-

2

phone report hiring frustrations of epicproportions 57,000 applicants had to betested to find 2,100 who were qualified to fillentry level technical jobs.

The cry from America's board rooms,education think tanks and governmentofficials is two-fold: America's workers areill-equipped to meet employers' currentneeds and ill-pmpared for the rapidly ap-proaching high technology, service-orientedfuture.

So why, given the scope of the existingdebate, launch yet another study ofAmerica's skills crisis? It was our purpose togo back and examine the skills issue fromthe bottom up, to propose solutions bygrappling with the problem's underlyingcauses.

This required visiting hundreds ofAmerican firms in all sectors of the economyand interviewing thousands of employers,personnel managers, production supervisorsand workers. The goal of our inquiry was tounderstand what American workers aredoing what their jobs demand, what theiremployers expect of them and how theseexpectations are likely to change in thefuture. .

!s %here .4 Skills Shortage'

. . . why, given tbe scope elfthe existiug debate, lautscbyet another study qfAmerica's skills crisis? Itwas oar purpose to go backand exassisse tbe Wits issuefrom the bottom NA to(grapple) with the proldenesunderlying causes.

13

The primary concern of morethan 80 percent of employersis finding workers with agood work ethic andappropriate social behavior

'reliable,"a good attitude,''a pleasant appearance,''a good personality,.'

3 4

We did not anticipate what we found.The picture we uncovered was of a skillsshortage, but one much more subtle andcomplex, and ultimately more discomforting,than that reflected in the public debate.

Our research revealed a wide range ofconcerns covered under the blanket term of'skills.' While businesses everywhere com-plain about the quality of their applicants,few -der to the kinds of skills acquired inschool. The primary concern of more than80 percent of employers is finding workerswith a good work ethic and appropriatesocial behavior 'reliable,"a good attitude,''a pleasant appearance,"a good personality.'

Although a few managers are worriedabout literacy and basic math skills, educa-tion levels rarely seem a concern. Employ-ers do not complain about an inability to doalgebra or write essays, though some arefrustrated that a large number of their em-ployees do not possess the elementarycapability to read a production schedule orfollow an instruction card.

Many employers require a high-schooldiploma for all new hires, yet very fewbelieve that the diploma indicates educa-tional achievement. More than 90 percentview the diploma as a sign of the applicant'sreliability and staying power, proof only thatthey did not drop out.

A Mere A clalls Shortage%

Less than 30 percent of our samplefirms are concerned about the labor marketpredictions of Workforce 2000: Work andWorkers for the 21st Centuty that women,minorities and immigrants will make cp thevast majority of new entrants to theworkforce in the 1990's and jobs requiringhigher skills will grow faster than low skilljobs. Few of these firms are worried aboutskills. Their focus is on providing day carefor workers' children or English as a SecondLanguage classes.

A few of the employers surveyed (15percent) mentioned occupation-specificshortages. The most commonly reportedshortages are for workers in the traditionalcraft apprentice trades, like skilled construc-tion or manufacturing, and in such tradition-ally female occupations as skilled secretaries,clerks and nurses.

These shortages can be largtly attrib-uted to changes in the relative earningpotential of these workers. Men and womenwho ordinarily would have gone into skillednon-college jobs that require substantialpreparation have chosen to attend college totake advantage of the higher wages offeredto college graduates.

3 524

120%

100%

80%

60%

40%

20%

0

The Reladve WagesOf Front4hse WorkersAre Going Down

0 1972ill 1967

I

si

111

Change in Wagesfor Selected OccupationsRelative to Each Other

Source: Bureau of Labor Statistics

253 6

Perhaps even more interesting than theabsence of an obvious skills gap was thelack of any expectation among the majorityof employers that their skill requirementswould be changing. Despite the widespreadpresumption that advancing technology andthe evolving service economy would createjobs demanding higher skills, only fivepercent of employers are concerned aboutgrowing educational skill needs. These weremainly large manufacturers, financial serviceorganizations and communications finns.

To sum up, in our survey of employersacross America, we found:

Only five percent of employers feel thateducation and skill requirements areincreasing significantly.

More than 80 percent of employers ex-press concern about 'skills' shortages, butthey generally mean a good work ethicand social skills.

Employers who think that education levelsare insufficient usually refer to illiteracyand a lack of basic math skills.

Only 15 percent of employers reportdifficulty finding workers with the appro-priate occupational skills. These shortagesare generally in chronically underpaid'women's' occupations and traditional crafttrades.

Is There A Skills Shortage?

Onlyilve percent qfemployers feel that educationand skill requirements areincreasing significantly.

Only 15 percent qf employersreport difilasityfroding:Porkers with tbe appro-priate oecapatiowatMese shortages ewegenerally in chronicallyunderpaid 'women's'occupations and traditionalcrq/1 trades.

7

... in a broad surrey ofemployment needs acrossAmerica, we found littleevidence of a far-reacbingdesire for a more educatedworkforce.

All 1o14 more tban 70 percentof tbe Jobs in America will notrequire a college educationby tbe year 2000. These Jobsare tbe backbone of oureconomy. and tbeproductivity of workers inthese Jobs wig, make or breakour economic future.

38

We did find a skills shortage of sorts.The problem of preparing young peoplewho are reliable, presentable and whocommunicate well on the job should not betaken lightly. For the people who lack them,these skills often prove permanent obstaclesto acquiring meaningful employment.

But in a broad survey of employmentneeds acros.s America, we found little evi-dence of a far-reaching desire for a moreeducated workforce.

Where Are People Working?The evident absence of a serious shortage ofpeople with strong cognitive skills is easierto understand after an exlanination of theplaces where most Americans work.

Despite the central position that acollege education plays in the Americandream. the United States employs one and ahalf times as many janitors, nearly twice asmany secretaries and five times as manyclerks as all the lawyers. accountants, invest-ment bankers, stock brokers and computerprogrammers combined.

Despite the decline of the agriculturalsector in our high-tech society, America stillemploys more than two million farm workerscompared with 85-1.0(X) doctors and dentists.There are 1.8 million engineers in America.but 6.2 million people work as retail salesclerks and more than 18 million on factoryfloors.

A 1 here .1 skill.+ shortage'

All told, more than 70 percent of thejobs in America will not require a collegeeducation by the year 2000. These jobs arethe backbone of our economy, and theproductivity of workers in these jobs willmake or break our economic future.

Where People Are Working

13%

13%

10%

3%

19%

7%Distribution of the Workforce

13%

Source Bureau of Labor Statistics

ProfessionalSales

What Skills Do Jobs Require?According to our survey of national skillrequirements, as confirmed by the Bureau ofLabor Statistics, jobs held by the total UnitedStates workforce can be categorized asfollows:

3 926

More than one third require little morethan an eighth grade education.

More than one third require a basic educa-tion plus some additional non-collegeskills.

Education RequiredFor Today's Jobs

ri 16 Yearsor More8-10 Years PlusAdditionalTrainingNo MoreThan 8 Years

Source: Bureau of Lab(); Statistics

4 0

Less than one third require a four-yeaicollege degree.

Category 1: Out of 117 million em-ployed workers in 1989, 40 million, or 34percent, were employed in jobs that requiredless than a high-school education. These arethe people who work behind counters, cleanoffices, make hotel beds, drive buses, takecare of the sick nd elderly, grow, prepareand serve tixxl, wash dishes and work infactories. Most of these jobs require onlyeighth grade level math and communication

A pleasant personality behind theservice counter, physical stamina on theconstruction site or a steady hand on thewheel tend to be the important require-ments.

Category 2: Forty-two peoplearc employed in jobs in America that requirea significant amount of training beyond abasic euucation. but not a four-year collegedegree. In this group fall the traditionalskilled NNorkers apprenticed trades, automechanics. secretaries and data workers.firefighters. electricians. plumbers andtechnicians. It was in these jo'ts that Nxefi)und occupation-specific skills shortagesmost often mentioned.

Category 3: The last group of 35million people are in jobs that are likely torequire a four-year collego degree. Workersin this category include managers, financialanalysts, accountants, salespeople, doctors.

ls i1en..1 Skills Shortew'

. . . Jobs hekl by the totalUnited States worifforce canbe categorized as follows:

More than one thirdrequire little more than aneighth grade education.

More then one thirdrequire a bask educationplus some additional non-college skills.

Less than one third requirea four-year college degree.

4 1

The introduction of newtechnology increases job skillrequirements for some, butlowers skill requirements forothers . . . In our survey wefound more examples of de-skilling.

With some exception& theeducation and skill lerels ofAmerican workers roughlymatch the demands oftheir jobs.

42

lawyers, teachers and engineers. Thesepeople have gained the most income as thereal wages of workers in the other twocategories have declined.

Is America Changing The Way ItWorks ?The distribution of jobs among these threecategories has changed only slightly over thelast 17 years. The proportion of jobs in boththe unskilled and skilled craft categories hasdropped only three to four percentage pointseach from their levels in 1972 (from 37percent to 34 percent in the first category, 40percent to 36 percent in the second).

The management and professional jobsof Category 3 have increased from 23 to 30percent since 1972. Even more significant. ahigher number of people occupying thesejobs are now graduates of four-year colleges

close to half merall, and more than threequaners of new entrants.

The major 'skills gap defined by theorkfinve 2000 repon is simply a continua-

tion of this trend An increasing number ofall new jobs created En Category 3 in thenext decade \ \ ill require a four-year collegedegree.

We found no other major change inskill requirements on the horizon. Theintroduction of new technology increaNes jobskill requirements tor some. but lowers skillrequirements for others A computer can beused both as a tool to expand the informa-

There A Stalls Shortage%

tion available to a worker, thereby increasingresponsibilities, or it can be used to removeresponsibility and judgment from a workerby standardizing procedures and limitingresponses. The latter 'de-skills' jobs, whilethe former increases skill requirements. Inour survey we found more examples of de-skilling.

What Is The Challenge We Face?With some exceptions, the educallon andskill levels of American workers roughlymatch the demands of their jobs.

The vast majority of our businesses arenot planning any major reorganization of theway work is done that would affect thisequilibrium.

Although the demand for collegegraduates will probably rise over the decade,this will not dramatically alter the characterof our labor market, nor create a crisis.Four-year ,:ollege graduates have beenincreasing as a percentage of our workforcesince 1940 from six percent in that year,to 11 percent in 1959. to 22 percent in 1987.A continuation of this trend will bring us tothe 30 percent that is likely to be required bythe year 2000.

We will face a challenge similar to thatfaced by many Third World countries, toinstill in our youth the attitude and socialmanners required for work in an advanced

4328

industrial nation. Ve will also have to tillselected occupational shortages that emerge.And, we will have to make provisions forday care as well as English classes for immi-grant workers.

Meeting these challenges will not beeasy. But if we meet them, we will nolonger have a skills gap.

However, simply meeting these chal-lenges will not raise our living standard.

By preparing more Americans fortoday's jobs we will, at best, r..rpetuate thenation's current slow rate of productivitygrowth and the incomes of inost Americanworkers will slide.

But there is an alternative . .

4 4,29 Is There A Skills Shortage?

By preparke moreAmerican's/or today's jobswe wilt at best, petpetuatetbe xenon's curreet slow rateqfprodectivity growth andtbe incomes qf most Amerkaisworkers will slide. But thereis axe alternative . . .

s

4 5

3AMERICA'S WORKERS:DISPOSABLE RESOURCEOR COMPETITIVEADVANTAGE ?

The stories in this chapter are true; the namesof people hair been changed and one of theplants is described anonymously.

Joe Smith is a Vietnam vet who worksin an electrical control panel plant in theMidwest.

for the past 15 years..1oe has beenpunching holes into the metal sheets thatform the panel casing. Seven or eighthundred times a day he pulls th: metalsheets off the conveyor bell, aligns them onthe drill press, activates the drill, watches asthe press comes crashing down, removes thesheets from the press, wipes away the metalflashing from around the holes and thenreturns the sheets to the conveyor belt.

The monotony is interrupted every sooften when Joe's machine breaks down orwhen a problem crops up down the line andthe service people come to fix it. Some-firms, too, the forklift operators deliver thewrong materials or the set-up people have toreadjust the machines when the plant isrunning a new batch.

4 6i 1

lie

Joe earns about $9 per hour ($13.50when he gets overtime) plus health insur-ance and pension benefits. Between his$25,000 salary and his wife's $15,000 salaryfrom her job at the bank, his family getsalong pretty well.

Lately, though, Joe has begun to worry.The company introduced a new kind ofsnap-on panel that looks as if it may replacethe one he makes. Joe has noticed that thenew job is not a career job. Most of theworkers are young practically kids andthey earn only $6 per hour. They do notreceive the benefits Joe gets.

Last year, a friend of Joe's lost his jobwhen the company moved the wire harnessdepartment to Mexico. His friend finallyfound a $6-per-hour job as a shopping mallsecurity guard. Now his friend's family ishaving trouble paying the mortgage. At 38-years-old and with only a high-schooldiploma, Joe worries that if he loses his jobhe will not fare.any better.

America's U orken

Sam lopresti was assigned tomanage Joe's plant two yearsago because *be plant wasnot earning mucb money.Sam's role was to cut costsapd turn tbe plant aroundHe cbose to do tbis byreplacing well paid workerswitb lower paid ones tbrokgbouisourcing and by productredesign to use 1.:ss materialsand labor. So far be bassaved tbe company $20million.

4 7

Our wages are five timeshigher than those in Taiwanand Singapore, six timeshigher than ix South Koreaand eine times higher than inMexico. Increasing6P, fiercecompetition has forcedAmerican companies to cutcosts aggressively.

Fmployers are responding tothis pressure in a number ofways. One way is to moveproduction to low wagecountries, closing downAmerican plants andbecoming importers. Anotheris to replace workers withmachines. A third is to lowerlabor costs by cutting wagesand benefits: replacing higherpaid workers with lowerpaid ones.

4 S

Sam Lopresti was assigned to manageJoe's plant two years ago because the plantwas not earning much money. Sam's rolewas to cut costs and turn the plant around.He chose to do this by replacing well paidworkers with lower paid ones throughoutsourcing and by product redesign to useless materials and labor. So far he has savedthe company $20 million.

For example, Sam found that by mewingthe wire harness assembly department toMexico, he could replace workers he waspaying $12 per hour (including benefits)with dollar-per-hour labor. Within the plant,Sam's engineers found a way to snap thepanel case together. The proposal was adouble winner. It eliminated the need todrill holes and bolt the panels together,saving labor. Moreover, the simple assemblyallowed Sam to hire $6-per-hour temporaryworkers to replace the more expensivecareer machine operators.

"The panel is too big to move toMexico," Sam explains. "But it really bugsme to pay $12 an hour for people to usescrewdrivers. My 10-year-old son can dothat."

Sam now plans to expand the practiceof snapping on panels. "Well save almost$1.5 million on that project alone," he says."We feel the Japanese breathing down ournecks in this industry; we have to cut costsor we're history."

Joe will lose his job this year.

.4 awn( a 'A lt orkers

Across our -iation today, millions ofworkers face situations similar to Joe's. Tostay competitive, many companies areincreasingly trying to cut the cost of labor.

Why is this happening? There are.many reasons, but one of the most serious isincreased competition. Our wages are fivetimes higher than those in Taiwan andSingapore, six times higher than in SouthKorea and nine times higher than in Mexico.

Increasingly, fierce competition hasforced American companies to cut costsaggressively. Deregulation of service indus-tries like transportation, banking and tele-coMmunications has intensified domesticcompetition and forced cost cuts. Publicemployers have been forced by funding cutsto adopt stringent efficiency measures aswell.

Employers are responding to thispressure in a number of ways. One way is.to move production to low wage countries,closing down American plants and becomingimporters. Another is to replace workerswith machines. A third is to lower laborcosts by cutting wages and benefits; replac-ing higher paid workers with lower paidones.

American companies have adopted allthree approaches. Some 700 Americancompanies employ more than 350,000

4 932

people in Singapore, Mexico and Taiwanalone. Many more companies import prod-ucts to sell under their own brand labelsgoods ranging from air conditioners tomicrowave ovens and VCRs. Service compa-nies, like retailers and whca-salers thatcannot move offshore, am cutting the ben-efits of their long-term workers and increas-ingly resorting to part-time or temporarylabor to keep wages and benefits down.

Public employers are also taking drasticsteps. Some are instituting hiring freezesand reducing services. Others are usingprivate contractors who pay lower wages toperform public services. In order to meetimmediate cash needs, investments in publicinfrastructure are being reduced.

The employers instituting these changesare not nec-:ssarily Scrooges; they are re-sponding to real economic pressures. Theysee no other way to survive.

But there is another way.

An AlternativeSix years ago, an IBM circuit hoard factory inAustin. Texas was in big troubk. Executivesfrom IBM's personal computel ,,kint com-plained to top management that the), couldbuy the Iloards elsewhere and szive thecompany S60 million Wlw should theycontinue buying from Austin?

For many companies, s(10 million insavings would haxe been enough reasonclose the plant But IBM has a full employ-

rJ

ment practice that discourages closing plantsand firing workers, so the company gaveAustin a chance to become competitive.

Unlike Sam Lopresti at the control panelplant, the Austin managers deckled to cutcosts by changing work organization. Theplant had huge indirect costs. For everydirect worker building the circuit boards,two or three indirect workers were requiredto move materials, inspect quality, repairmistakes, maintain the machines, scheduleand supervise. Despite the efforts of count-less supervisors, planners and inspectors, toomany boards were shipped with defects andcostly inventory lay all ar)und the plant.

The IBM managers tackled the problemby upgrading skills. They organized theirline workers into teams. giving each groupresponsibility for its own inspection, repair,maintenance, material ordering and supervi-sion. They assigned indirect workers to theteams and gave them direct production tasks.The ratio of indirect to direct workers wasreduced to less than one-to-one.

The IBM executives also changed jobclassifications by reorganizing manufacturingslots into seven categories (manufacturingtechnical associates IMTA's1) based upon skillreouirements. Workers performance oncompetency tests determines their classifica-tion. Under the earlier organization tlwcareer track for a manufacturing worker

America's Workers

But there is another way . . .the Austin managers decidedto cut costs kv changing workorganization. The plant badhuge indirect costs. Forevery direct worker buildingthe circuit boards two ortbree indirect workers wererequired to move materials.inspect quality, repairmistakes, maintain themachines, schednle andsapervise . . .

They cssigned indirect workersto the teams and gave themdirect production tasks.

5 1

Old Work Organization

Support

d6666'Front-line 'Workers

ended after about five years. By contrast,the new MTA system provides opportunitiesfor advancement through the fifteenth ortwentieth year, with each level requiring ahigher degree of skill or responsibility.

Vera Sharbonez had worked at theAustin plant ever since she left high schoolin 1969. Her job was to feed circuit boardsinto the automatic insertion machine whichrapidly fitted each board with more than -)0transistors and capacitors. When the ma-dline had completed its work, she pulled theboard out, inspected it for mistakes and putIt in the 'pass' 01 'reject bin. She did thisabout 1,200 times a day. Her pay was $10per hour.

.1nterica S It (wizen.

New Work Organization

§566M

Oe 666bMWhen rumors started spreading about

trouble at the plant five years ago, Veraworried that she might lose her job. Goodjohs were scarce in Texas, and she neededthe money she earned at IBM.

Instead, Vera was able to keep her job.She was assigiied to a new team of produc-tion workers. The team included peoplefrom all areas of the plant. They were toldthat, in addition to their old tasks, theywould have to learn a range of new skills.Vera would not only operate the insertionmachine but also set it up at the beginningof the day and fix it when it broke down.She and the others would be responsible forsetting their own schedules and they wouldtake turns leading the team.

5 2 .14

"When the MTA system v int. Aueed,

I was worried." Vera recalls. "I wasn't surethat I could do the nev; jobs. I thought thatmanagement was just hying to get mc...ework out of us for the same pay."

To prepare Vera and her co-workers,!BM launched a maim education and traininginitiative for its workforce, some of whomlacked a high-school education. The planPnow spends more than five percent of totalpayrod (not including lost wages) to teachworkers how to maintain machine: y, planproduction, troubleshoot lectronic circuitryand use computers. In some cases, workershad to he taught basic reading and mathbefore they could take the other courses.

Today. Vera's group meets to discussthe day's work plan each momint;. Theyorder their own materials from 'he store-room, they speak with internal suppliersabout materials problems and talk withcustomers about quality. The team keeps itsown quality records and helps with decisionsabout what equipment to purchase. Verastill spends 25 percent of her time loadinghoards, but it is only one of the many jobsshe knows how to do.

"I've been working a lot harder the pastfew years than before. but its worth it. I

feel like they're treating me like an adultnow. I can make decisions. I am alsolearning things that will be useful to me inall kincis of jobs. If management would give1... the production goals, I think we couldrun the whole plant now!"

35 53

Workers at IBM Austin also help makeinvestment decisions. Frank Jones and hisco-workers in the lamination area, for t.x-ample, decided to build a better 'cleanenvironment. They studied alternate sys-tems, worked with potential vendors, con-ducted a cost/benefit analysis and helpeddesign and order the equipment.

Improvements have made the Austinplant competitive with its rivals. The $60million gap has been closed. Productivityhas improved by more than 200 percent and-quality by five times, and inventory has beenreduced by 40 percent. Despite the im-proved productivity, no one has been laidoff at the plant (though IBM does have anearly rlirement plan). As the plant hasbecome more competitive, production hasexpanded by 600 percent, a new product isbeing introduced and the facility is employ-ing more people than ever before. Manage-ment plans to extend the new organizationmuch further, delegating even broaderresponsibilities to the line workers.

Which Choice ?The managers at IBM Austin and at thecontrol panel plant were both trying to cutcosts to be more competitive. But thechoices they made were fundamentallydifferent. While the panel plant achieved 75percent of its cost improvements by paying

America's Workers

To prepare Vera and her co-workers, 11111 lasenthed anagjor esktanstlos and iralalissittliativrikr Stit woripsomsow qpirbon lethal 1 a MO-school adocatkm Th.pSmwow spends more tbaafisopercent of total payroll (notbeanbag lost wages) to teachworkers bow to etaintainstsachinety, plax Prosktclion,troubleshoot electronicarcaitry mut use conqmsters.

54

The managers at IBM Austinand et tbe control panel plantwere both trying to cut coststo be more omnpetitive. Buttbe choices they made wet efOndamentally different.While tbe panel plant achieved75 percent of its costimprovements by payinglower wages, IBM Austinacik eyed more than 90percent of its improvementthrough greater productivitywith no net loss inemployment.

lower wages, IBM Austin achieved morethan 90 percent of its improvement throughgreater productivity with no net loss inemployment.

Why didn't Sam Lopresti try a skillsupgrade approach? For him, the choiceseemed too risky. "It would take too muchinvestment to try to educate the guys wehave here to take more responsibility," hesaid. "Many aren't even high-school gradu-ates. I've read about these factories that aregiving power to the workers and expectingthem to act like college. grads. That's aca-demic stuff. It sounds great in the class-room, but it would take years even if you.could make it work, which I doubt. I don'thave years to turn this place around."

The IBM managers, though dealing witha similarly educated workforce, did not haveSam Lopresti's option; the ampany's fullemployment practice discourages layoffs. AsIBM's managers note, good quality is hard toget with a low wage, high turnover philoso-phy.

From a management point of view,both approaches worked. Both turnedaround unprofitable plants. In the short run,either choice was a good one. For thenation, however, the choice has seriouslong-term implications. High productivitywork organizations mean the jobs stay athome. Job security increases, as do wages.

America's Workers55

36

4THE ORGANIZATION OFWORK IN AMERICAThe organization of America's workplacestoday is largely modeled after the manufac-turing system made famous by Henry Ford inthe eany 20th century. Frederick WinslowTaylor ,:onceived the system tt provide anefficient way to organize mass productionwith a large population of low skilled work-ers. The premise is simple: Break complexjobs down into a myriad of simple rote tasks,which the worker then repeats with ma-chine-like efficiency. The system wasdesigned on the correct assumption for theearly 1900's that educated w orkers would behard to find.

The system is managed by a smallgroup of educated planners and supervisorswho do the thinking for the organization.plan strategy, implement changes, motivatew olkers and solve problems. An extensive.hierarchical supervisory structure and elabo-rate administrative procedures allow manag-ers to keep control of a large number ofworkers.

Most employees under the Taylormodel need not be educated. It is far moreimportant that they be reliable. steAy and

37 56

willing to follow directions. The managersdo the thinking, technology furnishes theproductivity ach ances and the operatorssimply supply grease for the wheel.

The America of the 1950's and 1960'sprospered with the Taylor model. Immi-grants arriving at our shores and farmersmigrating to the cities furnished a limitlesssupply of low skilled labor. America's vastdomestic market also encouraged capitalinvestment for mass production. The UnitedStates embraced the system more firmly thanany other country.

This system helped make our nationrich and, in earlier decades, made the UnitedStates the largest manufacturer with thelargest middle class of any country in theworld. The system stilt determines the waywe organize our schools, our offices, ourbanks and our hospitals. And it continues todefine the job expectations of workers likeJoe and Vera, as well as the options thatmanagers like Sam are willing to consider.

10e Organization Of WOrk In Amerwa

Most employees sender tbeTaylor model "died not beeducated. It is far moreimpulsion tbat tbty bereliable, steady and wilingtofollow tliractions. Themanagers do tbe Oilskin&tedmologyfternisbes theproductivity advances . . .

57

As a new century approaches,however, this old workorganization as becoming lessappropriate for a high wagenation. High speedcommunication andtransportation me. Ise itpossible to produce mostproducts and wrvicesanywhere in the workLModern machinery andproduction methods contberefore be combined withlow wage workers to drivecosts down.

58

Why Mass Production Is OutdatedAs a new century approaches, however, thisold work organization is becoming lessappropriate for a high wage nation. Highspeed communication and transportationmake it possible to.produce most productsand services anywhere in the world. Mod-ern machinery and production methods cantherefore be combined with low wageworkers to drive costs down.

High wage nations like the UnitedStates can succeed only by producing higherquality products, providing customers withgreater product variety, introducing newproducts more frequently and creatingautomated systems which are more complexthan those that can be operated in low wagecountries.

These lequirements increase productioncomplexity, making it difficult for a smallgroup of managers at the center to controltheir businesses through administrativeprocedures.

Under the Taylor system, niore plannersare needed to develop procedures for newproduct introductions; more schedulers areneeded to schedule greater product variety;more set-up and maintenance people areneeded to handle the automated systems;and more checkers are needed to check thecheckers already in place to ensure highquality.

Surrounding the direct-line workerdoing his or her two minute job in a factory,for example, is an army of indirect support

Me Organaanon Of V.* In America

workers setting up and maintaining ma-chines; inspecting and reworking faultyproducts; receiving, storing and deliveringmaterials to the line; cleaning up; Tunningthe utilities; producing computer runs ofparts, orders, schedules and performance;hiring and firing employees; designingproducts and prucesses and assuring quality.In addition, several layers of managers existto supervise all of this.

Mass production has become highlybureaucrati.c and less efficient than it was. Anincreasing number of production steps andindirect processes means more hand-offs ofinformation, parts and finished products.This, plus the growing number of dependen-cies, lengthens production time and causes adramatic increase in mistakes.

In back offices of layloristic' insurancecompanies, for example, forms are passedfrom one worker to another in assembly linefashion. Functionaries take longer to pro-cess forms, make mistakes that must becorrected and shuffle customers who havemade telephone inquiries from departmentto department. Each specialized workerknows only a single part of the form and hasno authority to solve a customer problemthat goes beyond a narrowly defined area.

As policy options increase, new formsof risk are insured and computers are .n-creasingly sed to store and process informa-tion, work xomes more complex and

38

change becomes a way of life. The numberof tasks to be perforrned increases exponen-tially, and the tasks change often. To controlall of this, administrative guidelines, workprocedures and indirect functions multiplyuntil bureaucracy overwhelms efficiency andquality.

An Alternative: High PerformanceWork OrganizationsManagers, however, do have another choice.Across the United States and throughouthigh wage countries around the world, somecompanies have been adopting a completelynew style of work. The guiding principle ofthis new work organization is to reducebureaucracy by giving authority to directworkers for a wider variety of tosks.

Workers are asked to use judgment andmake decisions rather than follow, by rote,cumbersome procedures spelled out indetail. Management layers disappear asfront-line workers take over many of thetasks that others used to do from qualitycontrol to production scheduling. Tasksformerly performed by dozens of unskilledindividuals ar.. now perfirrmed by fewerhighly skilled people

New forms of work organization applyin some form to almost every industry. In atraditional American hank, for example, th..fun-tions of a teller are usually limited toaccepting deprkits, cashing checks andrecording loan and bill payments. Theposition is highly specialized. some tellers

.i9 00

deal with commercial clients, others withforeign currency transactions, others withtravelers' cheques and still others with smallacccunt customers.

-If a customer has a more complextransaction, seeks financial advice or isinterested in bank 'prolucts,' the tzller refersthe customer to a back-up depamnent,staffed in large part by college-educatedcustomer service representatives. Somebanks have even instituted different groupsof back-up personnel who are organized bythe complexity of the customer issue. Theentire 'front office' system from automatitteller machines to tellers, from customerservice and sales representatives to loanofficers is organized by operations man-agers to move customers in and out of thebank as quickly as possible. It is a highly'Tayloristic' work design.

Most American banks have a turnoverrate among tellers that averages more than40 percent a year, and in some branches canapproach 200 percent. Salaries are low,sorting at about $14,000 annually. Pressureis high to perform one's duties accuratelyand quickly, and advancement is limited.Training for these jobs consists of four to sixweeks of orientation and practice.

In a number of European banks, suchas Hypo, Dresdner and the Bavarian Bank inGermany, work k now being reorganized to

The Organizanon qf Work In Amenca

Tbe gadding principk q ftbisIsm woo* tegaalzatkutts toreduce bureaucracy byauthority to 4fred wtsrbersihra wider variety q /tasksMaaagnmesa layers sitiappearasfrattt-ibte workers tabe overmany qf the tasks that othersused to do.

New forms of workorganization apply in SOWform to almost every industry.

61

In a number of Europeanbanks . . . work is now beingreorganized to assign greaterresponsibility to skilledfinancial 'clerks'. . . They

handle all tbe functions of theaverage American teller, plusopen new accounts, grantmortgages and loans, processcommercia4 foreign andconsumer transactions,provide investment adviceand sell stocks and bondsfunctions performed byspecialized departments Intraditional American banks.

62

assign greater responsibility to skilled finan-cial 'clerks.' The individuals who fill thesepositions are actually viewed as 'front office'professionals, rather than as tellers. Theyhandle all the functions of the averageAmerican teller, plus open new accounts,grant mortgages and loans, process commer-cial, foreign and consumer transactions,provide investment advice and sell stocksand bonds functions peiformed by spe-cialized departments in traditional Americanbanks.

in some foreign banks, these workersare assigned their own clients with whomthey build professional relationsh,ps. Thereis an emphasis on job rotation, working insmall groups with other bank professionalsand demonstrating some degree of compe-tency in every banking function both inthe 'front' and 'back' offices.

The financial cleik position is regardedas an official profession for which one musttrain for tl ree years in a competitive andrigorous apprenticeship program beginningat age 16. Learning does not end with theapprer ..!ship: a uni) ersity track or anindustr) supported professional bankingacademy provides considerable opportunitiesfor advancement.

The education foundation and theapprenticeship program that prepare youngpeople for these professions have been inexistence for decades; now in the face ofincreasing global competition in financial

The Otganizahon lThrk ht Amerka

markets, these foreign banks are redesigningwork to take greater advantage of the capa-bilities of these well-trained employees. Tobe sure, not every foreign bank is makingsuch changes; but the tools, the potentialand the trend is evident.

Work reorganirations like this requirebig investments in training. Workers' paylevels often rise to reflect their greaterqualifications and responsibilities. But theproductivity and quality gains more thanoffset the costs to the company of higherwages and skills development.

Despite these advantages, most Ameri-can companies still cling to old forms ofwork organization. For more than 95 per-cent of the companies in our survey, the,:ontrol panel plant's solution is still thepreferred route.

Why Compnies Continue To MakeThe Low Wage ChoiceFaced as they are with munting foreign anddomestic competitive pressures, why domost American companies stick with tradi-tional forms of work organization? For manycompanies, the costs seem too high and thebenefits still uncertain:

A substantial initial investment is necessaryto shift to a high productivity path. Work-ers and managers must be retrained.Unlike capital investment, which is anemployer's to keep, companies risk losingtheir training investment if employeesseek work elsewhere.

63 40

Returns on investment from reorganizationmay take several years to realize Theperverse short-term financial horizons bywhich most American companies operatepresent tremendous obstacles to this typeof investment.

The flow of work and responsibilities mustbe redesigned. The transition can disruptwork processes.

Public policy often encourages the lowwage path. Our lack of national commit-ment to full employment makes it easierfor companies to hire temporary or sea-sonal workers and lay them off with littleconsequence. Our foreign tax credit anddeferral and foreign trade zone legislationprovide incentives for low wage produc-tion offshore. Our equal pay law does notapply to part-time and temporary employces, making it cheaper for employer; toreplace full-time permanent workers withcontingent workers.

American companies that overcome allthe obstacles and decide to pursue highproductivity work organizations run into onefinal obstacle that their foreign counterpartsdo not have to face: a front-line workforcethat often needs remedial education.

As one financial services manager saidto our study team, "We can pay to giveremedial education to our current workers,

41 64

but we can't afford to regive high-schooleducations to all our new hires who arehigh-school graduates because they didn'tlearn much the first time?

Or as another financial services humanresources director said, "I can do my backoffice functions anywhere in the world now.If I can't get enough 'skilled workers here, I'llmove the skilled jobs out of the country andjust do the customer interface here."

Why Work Organization Is PivotalThe changes taking place in work organiza-tion are key to productivity and qualityimprovement, the touchstones of economicsuccess.

Steam and electricity drove the first twoindustrial revolutions, causing profoundchanges in work organization which in-creased productivity, quality and livingstandards dramatically. The creation of thefactory in the 1800's and mass production inthe 1900's followed these technology break-throughs.

The advent of the computer, high speedcommunications and universal education areheralding a third industrial revolution. Highperformance work organizations are alreadyunleashing new advances in productivity. Agreater variety of high quality products and .

services are possible with shorter lead timesbetween new product generations andbetween the placing of an order and thereceipt of the product.

The Organization Of Work In America

IMO performance worknelintazallas are alreadysudeasbing stew suivancesproductivity. A greatervariety tif NO *ASVproducts and services arepossible with theater leadtimes betwear new productgenerations and between theplaciag qf an order mut tbereceipt of tbe produa

R5

Work organization cbaagesdrive tbe demandfor NOskills. But :vitbout a skilledworkforce, most companieswill settle into low wage workorganizations.

America implemented the mass produc-tion revolution faster than other nations,even though others the British and Ger-mans primarily had pioneered more ofthe enabling technologies. The enablingtechnologies for today's new revolution havebeen pioneered mainly in the United States,but this does not guarantee that we will reapthe greatest economic benefits. To do so,we must also lead the world toward newhigh performance work organizations.

Work organization changes drive thedemand for high skills. But without a skilledworkforce, most companies will settle intolow wage work organizations.

As we shall now see, we are not nowproviding the education and skills to amajority of out students and workers whichwill be required to support a move to newhigh performance work organizations.

C 6

The Organization Of Work In America 42

HOW WE PREPARE OURCHILDREN FOR WORKNo nation has produced a highly qualifiedtechnical workforce without first providingits workers with a strong general education.America invests little in its front-line work-force. We do not expect much from them inschool. We give them few job skills andlittle training. And we let them sink or swimwhen they try to get into the workforce.Yet, these are the very people we mustcount on to lead the way to a competitiveand productive economy.

The educational performance of thosestudents who become front-line workers inthis country is well below the averageperformance of their counterparts in somenewly industrializing low wage countries.Our front-line workers will not be able tocompete in the economic arena because theyare increasingly unable to compete in theeducational arena. They are fast becomingunemployable at American wage levels.

In our expectations for young people,the resources that we devote to them andthe rewards for performance that we givethem, our whole system conspires to pro-duce minimal educational effort or achieve-ment among our students who are notcollege bound.

43 E 7

80

70

SO

400 10 20 30 40 50% of Student Population Taking the Courses

U. S. Students Anchor The BottomOn Most International Tests(Algebra Results For 17-Year-Olds)

Ja Pan

Finland

United Kingdom

eon11/-1,SwedenIsrael

0 tarioNewZealand

BritishColumbiaScoand

United States Hungary

Sources Incentives for 1.earlJohn H. Bishop

How We Prepare Our Children For Work

America invests little in itsfront-line worlebrce. We donot expect mucbfross tbemscbool We sive tbakftw Jobskills and *de tfwinksg. Andwe let Mem sink or swimsaes tbey try to get into tbeworkprce.

Olsrfrosa-line workers willnot be able to compete i tbeeconomk arena because tbeyare &crow** unabk tocompete in tbe educational

arena. They are fastbecoming susemPloYable atAmericas, wage levels.

Our educational system isalmost wholly orientedtoward the needs of thecollege bound We providevery little for the majority ofthis nation's youth who donot go to four-year colleges.

One infive American childrengrows up in Third Worldsurroundings . . . many ofthzse children start out withsevere learningdisadvantages from whichthey never recover.

R9

Two Tracks From The Starting lineBeginning in elementary school, students aresorted and grouped within their classroomsby ability. In the early grades, these groupsare often given birds names, like 'Bluebirds'and 'Robins.'

Louis, a 'Bluebird' in a third grade class,spends the reading hour sounding out wordson a blackboard one by one His teacher'knows' that his ability is low, so she doesn'tpush him hard.

Jim, a 'Robin' in Louis' class, sits byhimself at a desk on the other side of theroom. He and the rest of the 'Robins' areexpected to read a certain number of storiesper week and write mini-reports on theirfavorite story.

Seven years later, Louis and Jim nolonger go to the same classes:

In his general math class, Louis islearning to calculate sales tax on a grocerybill. For his homework assignment, he issupnosed to add columns of figures togetherand then apply percentages to the total.

Down the hall, Jim has been workingon problems in analytical geometry for thepast hour. Next period, he and his labpartners will work on the design of a simplesoftware program to control a toy robot theyare building.

Louis represents nearly half of all high-school students, those who are relegated to'general curriculum' courses to learn life

survival skills.' It is a path to nowhere forLouis and the others who go on to becomeAmerica's front-line workers.

Jim, k.n the other hand, will go on tocollege. There, he will be given the skills,knowledge and credentials he needs todirect the front-line workers of this nation.

Studeins who enter the workforcerather than attend college or post-secondaryvocational-technical training, account foronly about 25 percent of all secondaryschool vocational credits. Surprisingly,students headed for college account fornearly 48 percent of these vocational credits.Less than one eighth of general educationstudents enter a job with any occupation-specific vocational education preparation.As a result, the 'general curriculum' ends upproviding neither strong academic skills norstrong vocational skills.

Our educational system is almostwholly oriented toward the needs of thecollege bound. We provide very little for themajority of this nation's youth who do notgo to four-year colleges. The story startsearly, in the conditions under which many ofmil front-line workers grow up, and theresources that we provide them while inschool.

Special Problems Of Mc PoorOne in five American children grows ur.Third World surroundings. Often living incommunities where they are surrounded hyhunger, violence and drug addiction, many

70How We Pitpure Our Children For Worle 44

of these children start out with severe learn-ing disadvantages from which they neverrecover.

Poor children pose a significant chal-lenge to educators, and their special prob-lems often require extra attention. Schools bythemselves cannot be expected to bringthese children up to world class standards.Their job is made even more difficult, if notimpossible, by the financing of the system.

Since almost half of the funding forpublic education is drawn from local prop-erty taxes, the financial system favcrs thosewho are most likely to go to college thechildren of the economically advantaged.(In Ohio, for example, poor communitiesspend as little as $2500 per pupil whilewealthier areas spend up to $10,000.)

Affluent school districts also benefitdisproportionately from state educitionalfunding. State aid is generally based on pupilattendance. Because dropout rates are lowerin wealthier areas, they end up with moremoney for their secondary school age stu-dents than do poor districts. Schools withthe largest percentage of disadvantagedstudents offer 40 percent fewer vocationalcourses and facilities, one third as manyoccupational programs, and one half asmany advanced courses as schools with thesmallest percentage of disadvantaged stu-dents.

This nation cannot hope to produce aworld class workforce without addressingthese problems.

4 5 71

Expectations And StandardsAs a society, we do not seem to expectmuch of the students who are not headedfor college.

In fact, the difference between Louisand Jim lies mainly in the expectations thatthe adults in their lives have for them. Froman early age, the adults in Louis' life told himthat he had little academic ability. Believingit, he did not display any. But everyoneexpected much of Jim, and he performed.More than any other country in the world,the United States believes that natural ability,rather than effort, explains acbievement.

The tragedy is that we communicate tomillions of students every year, especially tolow income and minority students, that wedo not believe they have what it takes tolearn. They then live up to our expectations,despite evidence that they can meet veryhigh performance standards under the rightconditions.

Most employers look at the high-schooldiploma as evidence of staying power, not ofacademic achievement. The vast majority ofthem do not even ask to see a transcript.They realized long ago that it is possible tograduate from high school in this countryand still be functionally illiterate.

As a result, despite recent attempts totighten up graduation requirements in manystates, the non-college bound know thattheir performance in high school is likely tohave little or no bearing on the type ofemployment they manage to find.

How We Prepare Our Children For Work

. . . we communicate tomillions of students everyyear, especially to lowincome and minoritystudents, tbat we do notbelieve tbty bave wbat ittakes to learn. They tben liveup to our expectations . . .

. . . tbe non-college boundknow that theirperibrisastatis, bigb scbool is likely tobave little or no bearbw ontbe type qf employment tbeymanage to pod.

7 2

. . typical bigb-scboolgraduates mill about in tbekibor market, moving fromone dead-end Job to anotheruntil tbe age of 23 or 24. Then,with little more in tbe way ofskills than they bad at lathey move into tbe regularlabor market, no match fortbe bigb0 trained German,Danish, Swedish or Swissyouth of .19.

73

The Transition From School To WorkAlthough the vast majority of our youngpeople leave high school to go directly towork, we typically offer them little or noassistance in this transition.

Few large firms in the United States willemploy students who have just graduatedfrom high school, preferring to wait untilthey have established some sort of trackrecord elsewhere. Family and friends canoften help middle class youngsters gain theirfirst chan* .:. in the workplace. But poor andminority students in the inner cities andimpoverished rural areas rarely have suchhelp. Cettain they will be rejected out-of-hand hy middle class employers who willnot like the way they talk, dress and behave,many give up early, both on school andwork.

The result is that typical high-schoolgraduates mill about in the labor market,moving from one dead-end job to anotheruntil the age of 23 or 24. Then, with littlemore in the way of skills than they had at18, they move into the regular labor market,no match for the highly trained German,Danish, Swedish or Swiss youth of 19.

Most secondary schools provide littleopportunity for the student to build a bridgeto the workplace and gain, while in school,the values, habits and skills that Europeanyouth naturally acquire through their trainingand mentoring during apprenticeship pro-grams. (In America, the apprenticeshipsystem is not designed or perceived as a

How We Prepare Our Children For Work

school-to-work transition program theaverage apprentice in the United States isolder than age 29.)

Some vocational educators are movingto put more academic substance into theirofferings. Some are creating tt.chnologycurricula that incorporate demanding math-ematics and science studies in an approachthat enables students to apply what they arelearning to challenging technological prob-lems. Some 1,500 students are enrolled inschool-to-apprenticeship programs based onthe European model.

Some high schools are pairing up withcommunity colleges to offer combinedprograms that promise a real future to theirvocational graduates. Some business organi-zations have worked with school districts toinitiate high-school academies that offergood connections to technical careers inbusiness. And some elite vocational schoolshave always done a good job of preparingtheir students for good careers. But theseprograms, promising as they are, hardlyconstitute a system.

The fact remains that our secondaryschools are not organized to meet the needsof employers or work-bound students. Eventhe vocational education system does abetter job of placing its students in post-secondary educational institutions thanplacing them in jobs related to their courseof study. The guidance system is set up to

74 46

help students get into college. Employerswho ask for traiscripts typically find themvery difficult to obtain, but colleges are ableto receive them easily. There is no curricu-lum to meet the needs of non-college boundyouth, no real employment service for thosewho go right to work, few guidance servicesfor them, no certification of their accomplish-ment and, as we have mentioned, no re-wards in the workplace for hard work inschool.

DropoutsCurrently, more than 20 percent of ournation's students drop out before completinghigh school (the figure is as high as 50percent in many inner cities). Not only dowe make little effort to help our potentialdropouts in school, but once they do dropout, our society makes even less of an effortto recover them. Some dropouts do comeback at their own initiative and expense toearn their school equivalency certificates, butonly after many years wasted in unproduc-tive employment.

Ironically, schools and governmentsreap substantial short-term benefits when astudent drops out. For example, the averageannual per pupil expenditure for a student inschool is approximately $4,300. When astudent drops out, the school's cosis drop.

By comparison, overall spending inemployment and training programs fordropouts is relatively low. While some

47 7 5

programs have per participant costs equal toor greater than the per pupil expenditures inschools, only a small fiaction of the eligiblepopulation is enrolled in these 'secondchance' programs. If the total federal, stateand local funding for 'second chance' pro-grams were applied to all current dropouts,we would spend the equivalent of only $235annually per dropout in the nation.

This perverse incentive system essen-tially allows us to balance our educationbudgets on the backs of our school drop-outs.

Over the long run, however, we pay.Our welfare and unemployment systems, obrprisons, and, ultimately, the nationaleconomy are continually drained by the costof sustainmg an uneducated, unproductiveindividual in our society.

The Finish LineWe expect very little academic accomplish-ment from the students who are not in theacademic college bound curriculum; we givethem watered down courses and we providethem with very few opportunities for partici-pating in effective applied learning programsor for acquiring relevant, professional-levelqualifications for occupations.

We have no national system capable ofsetting high academic ntandards for thenon-college bound or of assessing theirachievement against those standards.

How We Prepare Our Children For Work

Mery is ao curriculum tomeet tbe needs cinotvcoliegebound youth, ao realempioymona service fbr thosewbo go Atm to work, fewguidance servicesibr them,no certfficatioa qf theiraccomplishment ast4 as we&we mentioree4 no meant'in the workplaceibr bardwork in school

No: only do we make Makebrt to help our potentialdropouts in scboo; but oacetbey do drop out, our societymakes even less clan Vbrtto recover them

This perverse incestivesystem essentially allows usto balance our educationbudgets on Om backs of ourschool dropouts.

7 6

Ourikture depends onbaying blew sktilest bigblymotivated workers on tbefront line. Mai is not wbatour education system wasdesigned to produce.

We make very little provision for facilitat-ing the school-to-work transition. It isespecially difficult for students who knowfew adults to help them gain their first jobor acquire le habits, attitudes and valuesthat will enable them to keep that jobonce they get it. High-school guidanceoffices focus their efforts on the studentsgoing off to college, not on those boundfor work.

We do almost nothing to recover ourstudents who drop out of schoolalmost one quaiter of all our studentsone third of whom will go on to becomeour front-line wockforce.

We provide far more financial support fordistricts with high proportions of studentswho usually attend four-year colleges thanwe do for districts serving our future front-line workforce.

America will not be able to choose ahigh productivity, high wage future unless itcharts a sharp change of course. Our futuredepends on having highly skilled, highlymotivated workers on the front line. That isnot what our education system was designedto produce.

77

Wow ire. Pnpare Our ChildreU air 4' ( o * 48

6THE EDUCATION ANDTRAINING OF AMERICA'SADULT WORKERSEach year, American employers spend anestimated $30 billion on formal training. Atmost, however, only one third of thisamount is spent on our non-college edu-cated workforce, affecting no more thaneight percent of our front-line workers. Theoccasional training which companies doprovide for these workers is generally limitedto orientation training for new hires or *teambuilding and motivational training for long-term employees. The one exception is theongoing training provkled for skilled crafts-people.

Only a small fraction of firms make asignificant investment in training workers.According to the American Society forTraining and Development, $27 billion ofthat $30 billion was paid out by 15,000employers (one half of one percent of allAmerican employers). And, of this smalluniverse of firms that actually train, only 100to 200 the larst companies with signifi-cant professional and managerial staff

-spend more than two percent of their payrollon formal training

7849 The Education And Tmining Of Anwrica 's Adult Workers

Ewa year, Antericaaemployers *end assestimated $30 NamesArmed training .. 427 billowqf tbM .190 bon was paidoat by 11000 employers (owebat/Vase pstreW qf allAmerican emptoyers).

79

We tbus devote aboost all ofour educational resources totbe first 15 to 20 years of life.We assume tbat little learningwill be required during tbesubsequent 40 to 50 years ofworking life, especially forfront-line workers.

s o

The $30 billion spent by companies ontraining represents less than 10 percent of thenation's annual public education budget. Wethus devote almost all of our educationalresources to the first 15 to 20 years of life.We assume that little learning will be requiredduring the subsequent 40 to 50 years ofworking life, especially for front-line workers.

Apprentices are part of the small minor-ity of front-line workers who benefit fromextensive, long-term training. These areskilled workers construction tradespeople,operating engineers and tool and die makers.

The apprenticeship system usuallycombines paid work with classroom andworkplace instruction. Training is systematic.Clear industry established standards andregular performance assessments lead tonationally recognized certification.

National industry based networks ofunions and employers often help design thecurricula and provide the locally administeredprograms with an infrastructure of support.Federal and state education funds supportbuildings and the cost of instructors.

Apprenticeship programs sponsored byunions and companies provide coherenttraining to develop the skills of adult workers.Though worthwhile programs, they serve lessthan 300,000 people at any given time lessthan three tenths of one percent of ourworkforce.

The Education And Training Of America's Adult Wothers

The fact that employers in this countrydo not spend much money on training offront-line workers is not surprising. The'Taylor' model of work organization stillfollowed by most of our companies does notrequire skills from the vast majority of theirworkers.

Americans have traditionally relied onthe marketplace to determine how mucheducational preparation is necessary forwork. We assume that companies will traintheir workers if it makes business sense, andthat individuats will seek training if they feelit will improve their career prospects. How-ever, most employers require little in theway of skills for most workers, so marketdemand for training is weak. And, informa-tion critical to efficient market functioning

about the quality of training programs islargely unavailable. The result is relativelylittle training for the average worker.

Foundations For Public lAbor MarketPolicyModern public labor market policy inAmerica has its origins in the Great Depres-sion. The Federal and state governmentscreated the Unemployment Insurance system(UD to provide temporary economic assist-ance to laid off workers. To help theseworkers, a national network of local officeswas developed through a state administeredemployment service system.

8 150

To protect workers, the governmentestablished minimum wage laws, pensionand insurance benefits standards, health andsafety laws and child labor guidelines.Federal ground rules for labor and manage-ment relations were also set. The employ-ment service network was originally used bythe Federal government to link incomemaintenance, job search and training to-gether, but that assignment has eroded overtime.

While skills development has neverbeen a central focus of American labormarket policy, a whole series of programshas grown on the periphery. Education,social and economic development policyinitiatives have come to incorporate trainingas part of their missions. What we are leftwith is a complex and fragmented networkof adult training efforts.

Education InitiativesThough they were not designed to do so,state supported community colleges andfederal Pell Grants and Guaranteed StudentLoans have had a major impact on adultvocational training. More and more, publicand proprietary educational institutions arebecoming contract training providers toprivate employers and to public agencies.

In 1947, the Truman report identifiedthe need for a community college system.Originally conceived as 'stepping stones tofour-year colleges, community colleges arenow used primarily by recent high-school

5/ 8 2

graduates and adults for vocationally relatedtraining. Today, over 1,200 communitycolleges annually serve five million people indegree programs and another 4.5 million innon-credit courses, and their consume $12billion in state funds. More than two thirdsof the classesthey provide today are foradult vocational education.

For adults who seek to upgrade theirskills, the accessibility and flexible schedul-ing policies of community colleges makethese institutions appealing. These charac-teristics also encourage sporadic coursetaking rather than the pursuit of degrees,however, and dropout rates are high.

In addition, the lack of standardssometimes makes it difficult for students totransfer courses to other institutions or foremployers to recognize the value of qualifi-cations.

According to the National Assessmentof Vocational Education, only 19 percent of agroup of recent hi0-school graduates whoentered post-secondary education completeda bachelor's (11.2 percent) or an associate's(5.9 percent) degree or a certificate (1.9percent) within four years. The assessmenthighlighted the need "to help studentschoose a field of study, construct a coherentsequence of courses in that field, completethe course or program and fmd a relatedjob."

The Educuuon And Tmuung Of America's Adult Workers

Wolk Wes tlevelopmeat basnever been amaraljbass qfAmericas labor marbetpolk a whole swim qf~wow ba snmetaitliseperipbery. Iblacatko4 *WMand economic elemblaNWNpolicy lablatives bast cometo incorporate by*** aspart qf their minion& Maewe are ittfl wib is a complexameljhapaleled moor*qfadmit training arms

Tbe federsal and state trainingprograms for dislocated anddisadvantaged workers arewell-intentione4 and some oftbem do au extraordinaryJob. However, because tbeprograms are designedexclusively to aid tbedisadvantaged anddislocated populations,benefits are marginal in tbelabor Market andparticipants are stigmatized.

IR 4

Pell Grants and Guaranteed StudentLoan programs were introduced to give poorand working class children the means toattend college. These programs helped tocreate a major industry of private proprietaryschools, while at the same time fueling thecommunity college system. Over 85 percentof students attending proprietary schools arefunded by this public money.

For employers, community colleges andproprietary schools are natural trainingproviders. With large teaching staffs andextensive course material, these institutionscan tailor programs to a client's needs. Forthe institutions themselves, the extra moneythat comes in the form of tuition and feesmake this an attractive pursuit.

Social PolicyJust as education policy has spawned a vastnetwork of training institutions for workers,our social policies have also created a series'cif **anti Id train poor people. , LyndonJohnson's War on Poverty created a varietyof targeted programs that eventually focusedalmost all of the Federal government'sattention on short-term training programs forthe economically disadvantaged. Severalname changes have occurred since the1960's, but not the type of training. Eventu-ally, the Joh Training Partnership Act (JTPA)became the umbrella.

Today, the Federal government spendsroughly $5.7 billion annually on 13 major

employment and training programs, twothirds of which is allocated to the 'TPA.

JTPA has four major componentstraining assistance for economically disad-vantaged youth and adults (Tide HA), theSummer Youth Employment and TrainingProgram (Title IIB), the Job Corps and thedislocated worker programs aide ED. EachJTPA program has specific eligibility require-ments, but individuals can qualify for morethan one program.

Other JTPA programs provide employ-ment and training assistance for dislocatedworkers, and for other target groups such asIndians, Native Alaskans, Hawaiians andmigrant and seasonal workers.

While JTPA is the largest, several otherfederal training programs exist. Each targetsa special 'needs' population. Among thesepopulations are senior citizens, refugees andthose on welfare or needing vocationalrehabilitation or food stamp assiStance.

A number of states have Cieated social, ,programs for the economically disadvan-taged to supplement federal effons.

The federal and state training programsfor dislocated and disadvantaged workers arewell-intentioned, and some of them do anextraordinary job. However, because theprograms are designed exclusively to aid thedisadvantaged and dislocated populations,benefits are marginal in the labor market andparticipants are stigmatized.

R 5The Education And Training Of America's Adult Worker's 52

Due to limited funds, and their disper-sion among such a large number of constitu-encies, these programs reach only a smallportion of poor people in the country andprovide only limited training assistance.

Economk Development InidativesMost states have created a variety of pro-grams to attract industry. They provide lowcost construction financing, subsidized land,infrastructural subsidies and a wariety ofservices to entice firms to locate in theirstate.

Assistance with finding good job appli-cants and giving them training to make themjob-ready has now become part of theservice package offered by most states tocompanies they are seeking to attract. NorthCarolina was the first, in 1957, using statepublic education facilities, to provide 'cus-tomized training tailored to meet the needsof new companies coming into the state.Other Southern states adopted the idea as away to convince companies in the North thatthe'SOUthern labOr Supply; though notindustrially experienced, could be broughtup to a high standard. These programsproliferated throughout the country.

In the late 1970s. firms that werealready established in particular states beganto complain that most new jobs resultedfrom expansion of existing firms, not fromthe arrival of new companies. They asked

R 65,3

state governments to spend more time andmoney on them, rather than 'chasing smoke-stacks' in other states. This led to an exten-sion of many state training programs forgrowing local companies.

States added retention of finns to thelist of economk development efforts duringthe recession of the 1990's a time whenfew companies were expanding. Companiesin some states became eligible for trainingfunds to upgrade skills so that they wouldremain in a state.

States now spend almost $1 billion ayear to train workers for new jobs and toupgrade the skills of those already in theworkfon.... The training is usually of shottduration, though in some cases it helpscompanies significantly upgrade skills ofselected groups of line workers. Some ofthese state programs also help fill specificskill shortages, such as data processing.

The Current Adult Training andEmployment 'System'Thc petwork ,of public, training activities inthe country has thus been Created' aS a reStikof unrelated educational, social and eco-nomic development goals rather than fromany overall vision of human resource devel-opment. These variow and qften unin-tended origins of our adult training andemployment `system' have created a bewil-dering array of services, programs andproviders.

71e Education And Training Of America 's Adult Workers

neinutit qf pubicbuitting nctieltim Maecoutm7 bait tbawironn ~alas a ran* of mwolniedm l a c t i t i m m t wad and

economic titeelopmen t goalsranter tbassfrom nayiteetriUvision qf boon= removedevelopment. The e variousand Oen maintended origins(Wow. adult imbibe tendemployment vs tette tamcreated a bewildering arrayqf services, programs andproviders.

,

At tbe local labor marketlevel . . . Lack qf iscformationow provision, price andquality continually frustratestbe quints cej employers,agency qfficials andcustomers to mwigate thesystem

Tbe result is a crazy quilt ofcompeting and overlappingpolicies and programs, withno coherent system ofstandardization oriifformation exchangeservices on which variousproviders and agencies canrely.

In Michigan, for example, $800 millionin combined annual state and federal fundsare scattered across 70 sejittatetraining andeducation funding programs, administered_by nine different departments of state gov-ernment, and ofkred by innumerable localproviders. In New York, 19 different units ofstate government distribute $725 million iniob training services through more than 85different programs. At the local labor marketlevel, where people seek training and em-ployers seek workers, the picture is blurred.Lack of information on provision, price andquality continually frustrates the efforts ofemployers, agency officials and customers tonavigate the system.

Employers, government agencies andpost-secondary institutions use skills classifi-cations to plan and manage their humanresmice programs. But trying to define theskill content of jobs is often an impossibletask. The maze of classification systemsattests to this:

Seven different classification systems areused by various federal agencies and threeothers by the armed services. The UnitedStates Department of Labor's Dictionary ofOccupational Titles, one ot theii systeitis;lists some 12,000 classifications.

More than 500 national and regionalprivate groups set standards for selectedjobs.

The Education And Duining Of America's Adult Workers

The United States Department of labor'sapprenticeship program alone utilizes 97separate industry committees to set stan-dards for some 384 occupations.

The result is crazy quilt of-competing--and overlapping policies and plograms, withno coherent system or standardization Ofinformation exchange services on whichvarious providers and agencies can rely.

How has the system become ad com-plex? A recent Michigan task force rept*described the evolution of the mansionover the 30 years of government salvity in*

employment and training as follow&"Most new programs . . . are brought

forth with little attention paid to-their prede-cessors. Often the legislation creatingprograms imposes spedfic definitions, rulesand administrative procedures for expendi-tures; only rarely are these dovetaikd withexisting programs. The end result is often _

policy incoherence, administrative confusionand service delivery fragmentation.*

The product of this ad hoc approach totraining policy development is the treationof a maze of subsystems that are oftenincomprehensible to those who seek to usetheM it a locallabor market leveL. ..Reform EffortsThere have been reform efforts over the pastdecade, but the reform agenda is almost asfragmented as the current adult training .

89 3 1

efforts themselves. Initiatives over the lastdecade include:

Increased private sector involvementthrough Private Industry Councils. Busi-ness leaders, elected officials and commu-nity and education leaders share responsi-bility for managing Programs for thedisadvantaged. However, because oflimited funding, these programs reachonly a fraction of those eligible.

Greater emphasis on basic skills for wel-fare clients. Although well-intentioned.itSe fedetakind state programs aimed.at

skills upgrading stress iob placementrather than karning gain. ks a result.participants often receive brief trainingand may only be eligible for low skill, lowpaying jobs.

Setting performance standards. Somestates have called for common perform-ance standards and a central o; ersightboard to collect client and labor marketinformation, monitor performance andinfluence funding.

Greater use of outcome measures. Toensure accountabilit, !,,me states arebeginning to use outcome measures ratherthan procedural requirements. Instead ofjob placements or graduation rates, dem-onstrated competencies are the bench-mark.

55 90

l'hese ongoing reform effiarts have beenhampered by a lack of common skills classi-fications that makes it nearly impossible tocompare programs. Lack of agreement onhow to define levels of skill mastery makes itvery difficult to establish workable outcomestandards. In addition, most efforts havebeen narrowly focused on transitionaltraining programs for the disadvantagedrather than on building a single comprehen-sible system to meet the training needs ofemployers as well. The public and privatecollaboration necessary to make the marketFM' tmining,operatv 4Fctive1y,for all non-college people has been largelyparticular, the Job Service, at the heart of theinformation exchange and iob-and-trainingconnection in other nations, has been al-lowed to atrophy in many American commu-nities.

Summary: The Current SituationPast-secondary training and education forthe United States workforce appears to be acoliectiot of bureaucratic subsystems ratherthan an effective system addressing needs ofemployees and employers at the communitylevel.

Most of America's public trainingprograms were intended to me-t a series ofnarrowly defined needs that were oftenunrelated to one another. They were neverintended to coastitute a coherent, unifiedskill development system for America's front-

The Education And Training Of A .wrica's Adult Workers

k

No Effective system exists attbe locsgleveljitr maictsimgemployer oerdis 'oath vewdley ,'aealbsY I I development:

programs.

91

The lack of standardizationacross tbe system makes itdfficult for workers tocombine courses ix a logicalsequence of advancementtoward bigber skilled work

k,

2

,.

line workers. No effective system exists atthe local level for matching employer needswith readily available skill developmentprograms. The lack of standardization acrossthe system makes it difficult for workers tocombine courses in a logical sequence ofadvancement toward higher skilled work.

Most workers receive no education ortraining beyond high school. The vastmaiority who do receive training take occa-sional courses that are not tied to any indus-try standards because such standards do notexist in the United States. Others receivesome training because they are economicallydisadvantaged or have been dislocated fromjobs. This training is usually of short dura-tion and touches only a small number ofthose Wildi*ed A. ,

"e "e "e "e ,J

A New improved System For TheFutureAfter the turn of the century, when thesecond industrial revolution spawned themass production system, American industrypressured Congress to enact the Smith-Hughes Act, which created the Americansystem for vocational education. This systemprepared American students to work withthe new machinery and in the new worksystems being created. It worked well formany over time, but it has not been able tokeep pace with the more rapid changes inthe work place of today.

Me Education And Training Of America's Adult Woileeis

If this Commission is right, we areembarking on a third industrial revolution.This revolution will usher in new highperformance work organizations that havehigher skill requirements than exist loday.

Our current adult training policies areill-equipped to meet this challenge. Acomprehensive employment and trainingpolicy will be required to do for this revolu-tion in work organization what the Voca-tional Education Act aimed to do for the lastrevolution.

The change to high performance workorganization, and thus the increase in thedemand for skilled workers, is largely in thxhands of employers who must decide whichroute to take.

and Ein,effective okarkgtfP,r,Jrining willThe increased supply of,

require new institutions and pubhc-pnvatesharing of responsibility. As we shall see inthe next chapter, our major competitorsalready have such systems in place.

P 3 56

VOICES FROM ABROAD

hoJapast, we value ail (lour workers.We pay oar assembly worlter tbe sameas our engineer, and we provide himwith tbe same amount qf trainingAmerka is now more a comity qfeconostk hierarchy tbaaJapam.

apanese plant manager

America is not the only nation trying tomaintain high living standards whilecompeting with low wage nations. Ger-many, Japan, Sweden, Denmark and otheradvanced industrial countries with high

,,AAgeskites,face,the same challenge. Here,however, the simirakritY: ShipS-. 'While- -America has had a negative trade balanceof more than $100 billion annually for thepas: six years. Germany and Japan hmeenjoyed highly positive balances.Sweden's and Denmark's trade balanceshave been al)out even.

Each of these nations has maintainedhigher rates of productivity growth thanthe United States, and their living standardsand real wages have been rising steadily.Pay differentials between the college

57 4

1

-1

-1

Other Nations Pay High WagesAnd SdR maatainA Pc Adve Wade Wince

00_8111.03

SO

00

an

461.434

Bla66.112

win

0332

Minim?

Teadelialattcc, k . ,k. \ ,', \./ \/ \ ,\., \ ,e AveragewagesHour4r -r,132.941i

\

Five Year Average Trade balance and Average HourlyWage for Production Workers in Selected Countries

Sources: Bureau of Labor Statisticsinternational Monetary Fund

Voices From Abroad

%.k. \d k.

9 5

These nations, while sociallYand culturally distinct, sharea strong commitment tomaintaining a bigb skilL bigbwage economy for all of their

people.

Implementation varies widelyin eacb of tbese countries.But eacb maintains coherent,highly systematic structuresto stimulate both the supplyof and the demand for highlyskilled workers.

, -

9 6

educated and non-college educated arenarrower, and the distribution of income isless skewed than in the United States.

Other Nations'Are *bins FastelPPCn Ours

14%

12%

10%

8%

6%i

4%

2%

n

14.0

11.6

&3

6.26.8

UnitedStates

pe *Pan s anNIC's*

Annual Growth in Compensationfor Production Shrkers in Selected Countries1975-1988

N.- The Acifly*Opstilalized Countries ofSingapore, Hongkonitdfiat Milt:111nd Taiwan\ ,.

Source: Bureau of Labor Statistics

i ,1: e+ l'IWII . ibngid

How Are These Nations Coping?These nations, while socially and culturallydistinct, share a strong commitment tomaintaining a high skill, high wage economyfor all of their people. They also agree oncertain fundamental principles concerninghow to achieve this goal:

Academic expectations are high for allyoung people. Both college bound andnon-college bound students attain highstandards of educational achievement.

Well developed school-to-work transitionprograms prov.de young people withsolid, recognized occupational skills.

The skills of front-line workers are highlyvalued. Companies and governments arecommitted to providing lifelong trainingand employment opportunities to theaverage worker.

Public labor market agencies providevaluable training, information and place-ment services for all workers.

Government, business and the generalsociety agree on the need to activelypromote adoption of high performancework organizations.

Implementation varies widely in each br -these countries. But each maintains coher-ent, highly systematic structures to stimulateboth the supply of and the demand forhighly skilled workers.

9 758

Basic EducationEvery country we visited requires and makesan effort to ensure tha; its young peopleobtain bask proficiency in educational funda-mentals (language, mathematics, geography,history, science and the arts).

Equal access to a quality education iscritical for success. Disadvantaged areas(such as northern Sweden) and districts withproblem populations get the most funds foreducation. National curricula and nationallyor regionally standardized testing systemshelp set standards and reduce the variation inquality among schools. In Sweden, Denmarkand Japan, students of mixed ability aregenerally kept in the same classcs until theychoose a career path at age 16. Tracking isuncommon.

The underlying assumption in all ofthest countries is that every student can beeducated to be a productive worker in a highwage, high skill society.

Society makes it hard for students to fail.In Japan, students who fall behind are re-quired to spend extra time on weekends.evenings and during vacations to catch up.In Sweden, students who drop out are pur-sued and strongly encouraged to study inalternative learning environments attached tolocal youth centers. In Germany. remedialeducation is provided in apprenticeshipprograms to ensure mastery of basic learningskills.

59 PS

School-To-Work TransitionExtensive occupational preparation pro-grams, combining general education withworksite training, provide foreign employerswith high skilled, work ready youth andoffer young people a smooth trans;tion fromschool to working life.

In most of the countries we studied,schools begin early to prepare young peoplefor working life. Students in Denmark,Germany and Sweden begin.learning aboutoccupations in the seventh grade from localemployers and labor market representativeswho visit the schools. Swedish childrenmake field trips to workplaces and arerequired to complete 10 weeks of summeremployment by age 16.

After they finish compulsory school atage 15 or 16, the majority of young peoplein Germany, Sweden and Denmark enter atwo- to four-year professional program toprepare them for working life. In Germany,young people enter one of 380 formalapprenticeship programs and receive trainingin a company four days a week. In Swedenand Denmark, most of the instruction isprovided in school, but students also partici-pate in workplace training. Most of the

The important structural change forindustry is in tbe mind, It's trainingnot macbinety.

Swedish CEO

Voices From Abroad

The underlying assumption inail Outs countries is tbaevety student ass be educatedto be a praise:Sim worker in ahigh wage, high sltillsociety.

Extensive occupationalpreparatior programs,combistktg general educationwith works** training,provide fbreign employerswith high skilled work readyyouth and offer young peoplea smiWb-freussitionfromschool to working life.

Ver they finish compulsoryscbool at age 15 or 14 tbemajority of young people inGermany, Sweden andDenmark enter a two- tofour-year professionalprogram to prepare tbemforworking l(fe.

t )

9

Repres;entatives fromrefer's', industry councilsand unions design nationalstamiards for the programs,c:ert#0 training providers,assess petformance andcerte completion.

Employers, knowing thatstudents who graduate fromtbe system bare the skillsthey seek, are glad to hirethem. Students, seeing adirect relationship betweenschool and work, aremotivated to karn

100

programs are designed, if combined with theappropriate general education courses, toallow the student to continue on to collegeor a variety of higher technical and commer-cial programs.

Unlike tbe United States, Germany basno natural resoenves. Our main capitalis busman capitaL Maintaissitg a blgbstandard tiquality in our laboribrceguarantees our social welfare. On tbispoint everyone is agreed

Minister of Culture, Bavaria

Whether the training is provided mainlyin the workplace or in the school, a commonthread runs throughout the European work-force training systems:

Study is provided in a wide range ofoccupatioas across industries, from autorepair and construction to food serviceand banking.

Education generally combines school andwork based learning and participantsspend a certain portion of their studiestraining on the job.

Companies and unions provide workplacetraining and maintain strong connectionswith the schools. Some firms in Swedenand Germany have even set up their ownschools to attract highly qualified prospec-tive job applicants.

Voices From Abroad

Representatives from relevant industrycouncils and unions design nationalstandards for the programs, certify trainingproviders, assess performance and certifycompletion.

Students are assessed in performancebased and written eximinationi. 'Thosewho meet the standards set by industryare recognized as skilled workers in thetrade.

Employers, knowing that students whograduate from the system have the skills theyseek, are glad to hire them. Students, seeinga direct relationship between school andwork, are motivated to learn.

Unlike these central European systems,the Japanese emphasize general education.Although vocatkinal schools are available toJapanese students, the maiority completehigh school in general education programs.Many companies hire for life, and Japaneseemployers, as a result, tend to place greateremphasis on a student's general learningability and performance in school. Specificjoh related skills are provided by the com-pany throughout the individual's workinglife.

Subsuntial orientation training, whichmay last for years, replaces the apprentice-ship systems which exist in Europe. Virtu-ally all Japanese students are handed over

10160

from a school 'family' to a work 'family' in aseamless transition requiring little externalassistance.

We bewe natural resources; no mill-tar.y power. We have only one resourcedm inventive capacity q four brain& ftbas no limits. We moist make use qfWe most abscat4 Ira* equip. In tbenearfktum this metnal power wiltbecome tbe most creative common roostqf at humanity.

Head, Japanese Federation ofEconomic Organizations(Keidranmn)

The labor Market SystemAll four countries maintain comprehensivepublic labor market systems to assist adultworkers in finding appropriate training andemployment.

In contrast to the United States, wherepublic training and job information programsonly serve a limited population, the systemsabroad reach the majority. The foreign labormarket services are carefully integrated,providing a 'one stop shop' for training andemployment needs: employment placement,training and income maintenance for theunemployed and the exchange of labormarket information. The systems are ex-tremely well funded and play a critical rolein their nation's overall economic strategies.

61 102

The labor market seivices are generallyintegrated under a single agency (or tworelated agencies, in the case of Sweden) andgoverned by a tripartite board of govern-ment, company and union representatives.The labor market service is funded eitherthrough the unemployment insurance system(Germany and Japan) or a special payroll tax(Sweden and Denmark).

Unemployment insurance systems inthese countries are often coordinated withtraining programs. Typically, unemploymentinsurance is paid only as a stipend to thosein training or, as a last resort, after traininghas taken place. In some cases, the trainingmay be provided directly by a governmenttraining center, as in Sweden and Denmark,or the agency may pay for training offeredby a private provider, as in Germany.

While in full-time training, workers areprovided with the equivalent of the normalunemployment benefit to support them-selves. Training is high quality and longterm. For dislocated workers who arechanging occupations, this may mean receiv-ing training for two years or more.

A crucial responsibility of the publiclabor market agencies is to gather anddisseminate information about the status ofthe labor market. Germany, Sweden, Den-mark and japan all employ elaborate marketinformation services to guide policy and

Vokes From Abroad

atitlbotr canaries maistaincatypreheasim pails beermirk* spasm teassist

WON*appreprille traislugamtempleyinent.

. . . tb. systems &lamed readssbernmilarii;---7111efbreigir-labor searlost services arecarfyidly inagratesgprovidiag a 'one stop shop'Jar :minim and employmentneeds.

103

Leading foreign firms spendup to six percent of payrollon training and devote asignificant share of theireffort to their front-lineworkers.

1n4

direct their more active programs. Typically,the information service gathers data (-41employers needs in local labor markets. theskills which are available, and areas withsurpluses and shortages. This informatio ,then used by the service to determine whattypes of training t Irovide and to matchunemployed workers to available jobs.

Company TrainingLeading foreign firms spend up to six per-cent of payroll on training and devote asignificant share of their effort to their front-line workers. Large German companiesprovide their workers with a wide range offree courses, either at company trainingcenters or at outside institutions. SmallGerman businesses pool their resources andoperate external training centers throughindustry associations or local Chambers ofCommerce. Japanese companies focus onshop floor training through formalized jobrotation and instruction programs.

Government promotes in-companytraining to varying degrees in each k ,' t ;e

countries. In Denmark, where the economyis dominated by small businesses, the gov-ernment often provides training to compa-nies free of charge. Sweden's nationaltraining centers and 'renewal funds' encour-age companies to train. Companies arerequired to contribute a certain percentageof their payroll to the funds, but may laterwithdraw the money to finance trainingapproved by the government and unions.

t cute% troy. ' ' 'n VS

I've toured a member qf educationalsystems in Europe and tbe UnitedStates. Tbe biggest question is alwaysbow to convince companies to *end tbemoney on wafting. Ii Germany, ibis isnot questioned Everyone does it, andeveryone knows bow &spotlit* 1 _it is for"Made in Germany."

German training directbr

Similar principles guide Singapore's SkillsDevelopment Fund and the Irish Levy-Grantsystem.

Organization Of WorkEuropean and Japanese companies in mostindustries are further advanced than Ameri-can companies in the development of highproductivity forms of work organization.The leading firms, particularly those inmanufacturing and retail, have now beenexperimenting with rew processes and workcultures for a decade or more.

Swedish and Danish firms are perhapsthe most advanc,--i in adopting cooperativeforms of work organization. Today, compa-nies across many industries are using self-directed multi-skilled teams, expanding theskill content of jot, providing continuingtraining and empowering workers to makeday-to-day decisions. Workers are alsoconsulted on all major investment and workorganization decisions.

1e5 62

It used to take 700 people putting theirbands on to build a single car. Now ittakes 21A

tidy() executilv

German work practices emphasizeindividual worker autonomy and the masteryof high level skills. Workers help plan thework organization and are consulted onmajor work related investments and plans.

Japanese firms stress collective workerparticipation in shop floor decisions, thoughin a paternalistic fashion. Broad based jobrotation is commonplace. and managersspend most of their time on the shop floor.Japan has virtually abc)lished the hourlywage versus salary distinction and basescompensation for almost all employees on

We've tried to build a system wbicballows tbe people to control tbe materi-als, not vice versa.

Former l'oh'o execultt'e

seniority. (Shop floor employees with levelsof seniority comparable to the professionalworkforce may r. m as much as salesmenand engineers.)

Particular work organization modelsvary by country, but the outcome is thesame: greater responsibility and earningpower for the average worker.

Why Are Foreign CompaniesChoosing High Skills?Foreign managers do not adopt new formsof work organization because they are morealtruistic or more far-sighted than Americanfirms. Most foreign companies choose highproductivity models in response to a varietyof external and labor inalket pressures.

National full employment policies, tightlabor markets, government lal)or regulations,strong union movements, high wages and ahighly skilled workforce all provide incen-tives for foreign employers to choose thehigh productivity path.

In Japan, Sweden and Singapore,official public commitments to full employ-ment limit the ability of employers to lay offworkers. These polics create a tight labormarket, making it difficult for employers toattract new employees. Broader job defini-tions. attractive career paths and better workconditions can give them an edge in hiring.

In Sweden, Denmark and Germany,companies are required by law to consultwith unions before they can lay off workers.Throughout Europe, requirements of timelynotice and severance pay strongly discour-age layoffs. Employers therefore have strongincentives to invest in their workers andprovide training and good career tracks.

6 I t olCCN HIM1 Abroad

European and Japanese-companies in most industriesare Anther advanced thanAmerican companies ii, tbedevelopment qf bigbproductivity forms qf workorganization Partkularwork ortganization modelsvary by country, but tbeoutcome is tbe same: greaterresponsibility and earningpower for the averageworker.

1n7

. . . the higher education andskill levels offoreign workersmake it both nes7essary andpossible for foreigncompanies to adopt newforms of work organization.

But higher education levelsalso mean that workers areless willing to toleratetraditional forms of work

1n8

Other Nations Invest MoreIn Employment And Training Policies

Finlaib

German

Canad

Australl

AustriUniteS$atc

Norwa

_

1.1

7

3.4

4.8

2.6

2.3

3.0Sil II=111.7

I

i

2.5

DIUI0.3 xi

i 0.2 ming1

.0 . ,.i

0 Active

. . sire

Costs

.Costs1 4 0.7

111

0 1% 2% 3% 4% 5% 6%Expenditure on Labor Market

Programs in 1987 as a % of GDP

*Passive includes mainli uwtemderloy-ment insurance, activemainly training and Job counseling

Source: Swedish Labor Board

High wage levels, due in part to unionpressure and national income policies, alsoforce companies to achieve higher levels ofproductivity either through increased trainingor new forms of work organization.

()it e.s tr)ll/ . brrmld

Finally, the higher education and skilllevels of foreign workers make it both neces-sary and possible for foreign companies toadopt new forms of work organization.Strong occupational preparation allowsworkers to handle more complex workas.signments and greater front-line responsi-bilities. But higher education levels alsomean that workers are less willing to toleratetraditional forms of work.

Swedish education reforms in the 1960'sthat drastically raised education requirementsalso precipitated high rates of absenteeism irSwedish factories. Young workers, bored bytraditional factory work, opted to stay athome. This caused manufacturing employers,in particular, to reorganize work in order toincrease job content, with the aim of attract-ing workers.

Them And UsWhile these nations differ in economy andculture, they share an approach to the educa-tion and training of their workers and to highproductivity work organization that we lack:

They insist that virtually all of their studentsreach a high educational standard. Wedo not.They provide 'professionalized' educationto non-college educated workers toprepare them for their trades and to easetheir school-to-work transition. We do not.

64

This is the reason for the great expan-sion ofilirther education in Germanyright now. Germany is fighting to bold aquality edge over countries like Koreaand japan not so much with tbeUnited States. The problem with tbeUnited States is that there are too manypeople in college and not enough quali-fied workers. The United States basoutstanding universities, but it is miss-ing its middle. Too mucb training takesplace on the job, and therefore is toounsystematic

German executrix,

They operate comprehensive labor marketsystems which combine training,labor market information, job search andincome maintenance for the unemployed.We do not.

They support company based trainingthrough financing sche.nes based ongeneral revenue or payroll tax. We donot.

They have national consensus on theimportance of moving to high productivityforms of work organization and buildinghigh %%age economies. We do not.

65 110

America stands out among advancednations as having a unique set of approachesto education, training, school-to-work transi-tion and overall labor market policy.

Our approaches have served us well inthe past. They will not serve us well in thefuture.

Voices From Abniad

America stands oat amenadvauted nations as having aunitise :get of approaches toeducation, trataivg, schoot-to-work transition and overalllabor market policy. Ourapproaches have served uswell in tbe past. They will notserve us well in the jkture.

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8THE CHOICE

Americans are unwittingly making a choice.It is a choice that most of us would probablynot make were we aware of its conse-quences. Yet every day, that choice isbecoming more difficult to reverse. It is achoice which undermines the Americandream of economic opportunity for all. It isa choice that will lead to 'in America where30 percent of our two* may do well atleast for a while but the other 70 percentwill see their dreams slip away.

The choice that America faces is achoice between high skills and low w ages.Gradually, silently. w e are choosing lowwages.

The choice is being made by companiesthat cut wages to remain competitive. It isbeing made by public officials who fail toprepare our children to be productiveworkers. Ultimately, we are all making thechoice by silently accepting this course.

We still have tinle to make the otherchoice one that will lead us to a moreprosperous future a choice for high skills,

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not low wages. To make this choice, wemust fundamentally change our approach towork and education:

Today, we demand too little of thosestudents not headed for college.

Tomorrow, we must demand high per-formance from all students, even those notgoing on to college.

Today, we shrug our shoulders as over 20percent of our students more than 50pe-cent in the inner cities drop out ofschools.

Tomorrow, we must ensure that all youngpeople get the education they need tosucceed.

Today, we blame schools for not providingthe type of workers employers want, yetemployers are rarely involved in student'seducation and training.

Tomorrow, we must share responsibilitywith the schools for defining standards ofprofessional competence and take thelead in helping students cross the bridgefrom school to work.

Me Choice

, 1., 11-

The choice that America facesis a choice between highskills and low wages.Gradually, silently, we arechoosing low wages.

The choice is beingmade by companies tbat cutwages to remain competitive.It is being made by pub&officials who fail to prepareour children to be productiveworkers. Illtimate&, we areall making the choice bysilent& accepting this course.We still have time to make theother choice . . . a choice forbig!, skills, not low wages.

1 1 3

We will be successful if ourwork kindles a debate thatleads to acti,m, howeverformsdate4 that sets Americafirmly on a high skill, highwage course.

1 1 4

Today, we stop educating our non-collegehound youth at 18 they must sink orswim with the skills they have acquired bythat age.

Tomorrow, we must create a means forstudents not going to college and forpeople already in the workforce to ac-quire and renew the technical and profes-sional skills they need for high productiv-ity work.

Today. we limit our public lal)or policiesto temporary income maintenance andminimal training for the poor and unem-ployed.

Tomorrow, we must expand those policiesto embrace skill development for allworkers.

Today, we don't seem to care if companieschoose to compete by cutting wages or byincreasing productivity and quality.

Tomorrow, we must provide incentives forthe.high productivity, high quality choice.

Our Commission members share a deepconcern about the future that America ischoosing. If America is to remain prosper-ous, fundamental changes are needed in theway work is organized and in the way Areeducate and train our people.

The Choice

We hope and expect that others willexamine our proposals carefully. But suc-cess, in our view, is not necessarily tied tothe adoption of our precise plan. We will besuccessful if our work kindles a debate thatleads to action, however formulated, thatsets America firmly on a high skill, highwage course.

1 1 5

68

9THE FOUNDATION SKILLSRecommendation 1111

A new educational performance stan-dard sboodd be set for all students, to bemet by age 16 This standard sboodd beestablished nationally and bettamarkedto tbe highest in the world

All of our students should meet anational standard of educational excellenceby age 16, or soon thereafter, which willequal or exceed the highest similar standardin the world for students of that age. Astudent passing a series of performancebased assessments that incorporate thestandard should be awarded a Certificate ofInitial Mastery.

In order to adequately prepare ouryoung people for working life, we must firstsee that they acquire the educational skillsnecessary to become effective players in ahighly productive society.

The establishment of a system ofnational standards and assessment wouldensure that every student leaves compulsoryschool with a demonstrated ability to read,write, compute and perform at world-classlevels in general school subjects (mathemat-ics, physical and natural sciences, technol-ogy, history, geography, politics, economicsand English). Students should also have

69 1 1 6

exhibited a capacity to learn, think, workeffectively alone and in groups and solveproblems.

Among other things, the Certificate ofInitial Mastery would certify labor marketreadiness, and a mastery of the basic skillsnecessary for high productivity employment.'The same Certificate would also be requiredfor entry into all subsequent rorms of educa-tion, including college preparatory andcertified professional and technical pro-grams.

The assessment system would establishobjective standards for students and educa-tors, motivate students and give employersan objective means to assess the capabilitiesof job applicants.

The Certificate of Initial Mastery wouldnot indicate the completion of a student'sformal education. Rather, for the vast major-ity of students, this achievement would serveas a foundation for more advanced forms ofeducation or training.

Effort Based Education AndAssessmentThe United States is the most over-tested andunder-examined nation in the world. Mostof the tests that American students take

Me Foundation Skills

Schematic leprapentadonOf The Commission's Proposals

Ism -Awryidlest

Itoolk /111emesorr Ilk MbIde Wool

""

11 7

AU of our students sbouklmeet a national standard ofeducational excellence by age16, or soon thereafter, whichwill equal or exceed tbehighest similar standard inthe world for students of tbatage. A student passing aseries of performance basedassessments tbat incorporatetbe standard should beawarded a Certificate ofInitial Mastery.

The assessment systemwould establish objectivestandards for students antieducators, motivate studentsand give empkrers anobjective means to assess thecamtbilities ttfjobapplkants.

1 1 8

standardized achievement tests and collegeentrance tests are deliberately decoupledfrom the school curriculum. Teachers arenot supposed to prepar students directly forthese tests, and students are not supposed tostudy for them (except in 'cram tourses' thatfew believe have lasting educational value).

As a result of this testing system. Ameri-can education does not clearly rewardacademic effort on the part of either teachersor students.

An examination based assessmentsystem would fundamentally change thissituation. At the heart of such a systemwould be a series of performance basedexaminations for which students can explic-itly prepare. (The type of amessment systemwe have in mind is detailed in SupportingInformation I.)

A Cumulative Assessment SystemThe assessment system should allow stu-dents to collect credentials over a period ofyears. perhaps beginning as early as en-trance into the middle school. Thi. kind ofumulative assessment has se% eral achan-

tag...s over a single series of examinations.

!: ould help to organi/e and motivatestudents over an extended perio(.I of time.Rather than pieparing for a kir-oft exami-nation (the form and demands of which a1 2-% ear-old can only dimly imagine).students could begin early to collectcpecific certificam

Ponntlawm Orliss

It would provide multiple opportunities forsuccess rather than a single high-stakesmoment of possible failure. Cumulativecertificates would greatly enhance theopportunity for the undeieducated andunmotivated to achieve high educationalstandards. All could earn credentials attheir own pace, as the for anyspecific credential would not vary, regard-less of the student's age.

It would allow students who are notperforming well in the mainstream educa-tion system to elm their credentials underother institutional auspices.

An Independent ExaminingOrganizationTo set the assessment standards and certifica-tion procedures, we recommend the estab-lishment of an independent national examin-ing organization that bn)adly representseducators. employers and the citizenry atUrge

The organiration should be authorizedto convene working commissions in a varietyof knowledge and skill areas to help trainjudges. set and assess standards and conductexaminations. The organization should beindependent of st.hools and school systemsand protected from political pressures.

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10UNIVERSAL MASTERY OFTHE FOUNDATION SKILLSRecommendation #2Tbe states should take responsibility forassuring that virtually all studentsachieve a Cert(ficate of Initial Mastery.Through tbe new local Employment andTraining Boards, the states, with Federalassistance, should create and fundalternative learning environments fortbose wbo cannot attain tbe Certtficateof Initial Mastery in regular schools.

It is not enough to establish a highperformance standard It is essential thate\ eryone meets it. Abo\ e all. we must a\ oidcreating a system of educational 'haves. and'have nots in w hidi some students attain theCertificate of Initial Mastery w Me others arepermanentl relegated to the backw aters ofour society. The purpose of the Certificate isto impro\ e the lifetime education and em-plo\ ment opportunities of all students, not toexacerbate the problems that already exist.

Not all students \\ ill meet the standardat the age ot 16. Some \\ ill achieve it earlier.They should ha\c the optic.. of ad\ ancingimmediately to further education or training.Others may remain in school until age 18

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before they earn their Certificate of InitialMastery. But some will drop out of schoolalong the way. What should happen tothem?

Local Youth Centers: The DropoutRecovery SystemWe recommend that the states, through thenew local Employment and Training Boards(described in a later chapter), establish localYouth Centers. These Centers woukl belegally responsible to the Boards for allyoung people between the ages of 1-t and 21who have left school before acquiring theirCertificates of Initial Mastery. Wally, thereshould be a Youth Center in every commu-nity or neighborhood.

The first priority of the Youth Centerw ould be to ensure that every young personattains the Certificate. The Center shouldprovide a supportive, family-like environ-ment. Young peop!.4 would have year-roundaccess to basic education in alternativesettings, employment and career counseling,work experience and job placement. TheCenter would provide these services bymaintaining strong liaisons with employersand connections with the full range of

.I Inagua Masloy qf me hnindatum Awl,

Schematk RepresentationOf The Commission's Proposals

Sforldorce

/Local

Training Board

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IlinnlisSaily

Certifkate of Initial Mastery

Elementary & Middle School

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We recommend tbat tbe states,tbrougb tbe new log:alEmployment and TrainingBoards . . . establish localYouth Centers . . . The firstpriority of tbe Youth CenterWould be to ensure tbat everyYoung person attains tbeCertificate.

. . . work experience and Job

placement. The' Center wouldprovide tbese services bymaintaining Atrong liaisonswith employers . . .

The Center should employalternate learning techniquesthat are responsive todifferent learning styles.Many of the best existingprograms emphasize learningby doing often on a fob . . .

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community health and social service agen-cies. A strong mentoring network would befostered to provide positive role models forthe Center's participants.

A Center might extend its services in anumber of ways. At one end of the spec-trum, the Center could provide all or most ofthe core services itself. Or, it could contractwith a range of providers. including public,private. for-profit and not-for-profit organiza-tions (including schools) to supply many ofits services. Some programs already in:xistence can point the way (see SupportingInformation II).

The Center should employ alternatelearning techniques that are responsive todifferent learning styles. Many of the bestexisting programs emphasize learning bydoing often on a job as well as use ofcomputer based instruction. These tech-niques and many others could be adapted tosuit individual circumstances.

Building The Connection BetweenWork And Education For YoungPeople Who Do Not Have TheirCertificatesToday, the motivation to achieve in highschool is often overshadowed by the moneya job can provHe. Students who drop Out ofschool, or who merely maintain a physicalpresence long enough to obtain a diploma

(doing as little work as Ex ;sible), often getjobs to have spending money. They see noeconomic benefit to more schoolwork. Theyare often right.

The most effective way to get youngpeople to achieve their educational qualifica-tions is to establish clear signals that theireducation will have genuine value and tocreate positive consequences for effort andsuccess. Vague homilies on the importanceof learning will not work. The lack of anyclear, direct connection between educationand employment opportunities for mostyoung people is one of the most devastatingaspects of the existing system.

That kind of connection will only occurfor many students in the Youth Centers iflocal employers organize to provide jobopportunitie: for them. Business compactsand individual companies across the nationalready give preference in hiring to youngpeople who stay in school.

We strongly urge extension of suchinitiatives to establish employment andtraining options for Youth Center enrollees.

Guaranteeing the right to a goodeducation to every young American andproviding positive links between educationalachievement and jobs are essential to thecreation of an educated nation. However,we recognize that some young people willstill not exercise their right. Thus, successmust -Also depend on placing an obligationon young people to learn.

1731 mimed MiWery Qf Me Fmmdanon Ska 72

Once Youth Centers are established, wepropose that the child labor laws beamended to make the granting of workpermits to young people up to age 18contingent on either their possession of aCertificate of Initial Mastery, or their enroll-ment in a program leading to the Cr.'ificate.

At first glance, this may seemdraconian. But, in the long run, this require-ment will benefit our youth and ultimatelythe nation. If our future workers do notpossess the education and skills signified bythe Certificate of Initial Mastery, they will becondemned to dead-end jobs that leave themin poverty even if they are working. The $4per hour they can earn at age 16 might seemappealing compared to no earnings, but ifthat is all they are equipped to earn at age30, the appeal will be gone.

In 'nigh unemployment areas, where th-:prospect of earning money while going tothe Youth Center program is slight, wesuggest that the stat s and Federal govern-ment, through the Y nith Center. providepaid work-study arrangements. (Safeguardscan be created to prevent displacement ofthe existing adult workforc: and to protectlabor standards.) In certain cases wheresuch work would create particular hardships,stipends for needy students should beconsidered.

Preschool Preparation And SchoolRestructuringNo nation can expect to meet a worldeducation standard when one out of five ofits children lives in poverty. That problemwill not be eliminated overnight. In themeantime, it is essential to address the worsteffects of poverty among children. Muchcan be accomplished through the extensionof effective child development programs tomore children in need, a problem on whichthe administration and the Congress havemade a start. It will also be critically impor-tant to improve the health of young, low-income children, especially the growingnumber born addicted to drugs. We havenot studied these problems in detail, but werecognize that our aspirations require theirsolution.

To say that we cannot reach a worldeducation standard without addressing theproblem of poverty is not, however, to saythat the schools cannot be held accountablefor poor student performance. The recordshows that some inner city and rural schoolsserving very poor children produce highlevels of student achievement.

If standards are raised and nothing isdone to improve our schools, the YouthCenters might become catchment areas for aswiftly growing number of students. This isnot our ;ntention. The success of our pro-

The lack qf any clear, directconnection between edam lionand employment opportunitiesfor most yosurg people is oneof the most devastatingaspects qf the existing system.That kind qf connection willonly occurjbr marry studentsix the Youth Centers Vocalemployers organize to providefob opportunities for thew

Once Youth Centers areestablished, we propose thattbe child labor laws beamended rn make tbe grantingof work permits to youngpeople up to age 18 contingenton either their possession of aCertificate of Initial Mastery,or their enrollment in aprogram leading to theCertificate.

1 247.3 unimrsal Mastery Of The Foundatron Stalls 1 25

No: until there are realrewurds for school staffswhose students succeffl andreal consequences for thosewhose students do not can westile!), assume that erelythingpossible is being done to helpall children succeed in schoo;

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posals will depend on the schools doing amuch better job of educating all students.High standards alone will not ensure thatoutcome

The schools like our businessesalso need to be restructured for high per-formance by pushing decisions down to dieschool staff and then holding die staff ac-countable for student performance. Asmatters now stand, teachers ofter lack thediscretion they need to be able to bring

eryone up to a high standard. But theyalso lack the incentive to make the effort.Not until there are real rewards for schoolstaffs whose students succeed and realconsequences for those whi)se students do

not can 'we safely assume that everythingpossible is being done to help all chiklrensu(ceed in school.

Incentives For Schools To RetainPotential DropoutsNlam hool districts are making substantialefforts to improve the education of lowinLome students but ha\ e little successsimpl because they lack the necessaryfunds A number of the countries we visitedaddress tlus problem by making sure that

se !,chool districts serving the rxmresthiklren and those in sparsely populated

areas are funded at the highest levels. Their

lull erN(l 1 1 gen ( )/ ,),mthim sk

objective is not to provide 'foundation' aidthat can be supplemented by those commu-nities in the best position to do so, as in theUnited States, but rather to be sure thateveryone has what it takes to get up to the

same high performance standard.If the United States followed these

countries' examples, it is very likely thatenrollment in the Youth Centers would fallas the districts became better able to meetthe needs of students in trouble.

Funding The Youth CentersThe Youth Centers we have proposed musthave the funds they need to succeed.School districts would be required to notifythe nearest Youth Center about any studentwho drops out The school district wouldtransfer to the Youth Center the average per-pupil expenditure (including all state andFeckral funds) that the school would havereieived for that student. Payment wouldcontinue until the student receives theCertificate of Initial Mastery or reaches age

21, w hichever collies first.This structure creates a powerful incen-

tive for schools and gm ernments to developprograms to retain and educate their students

properly the first time.Dropouts are expensive for America. A

high percentage of student dropouts abusedrugs, conunit crimes, are unemployed ormust rely on welfare Many become teenageparents. More than 60 percent of the people

(,)

in our prisons are high-school dropouts. Onaverage, it costs more than $16.0(X) per yearto keep prisoners housed compared withless than $4,300 for a year ot high school.

In 1989 approximately 800,000 16-year-okls dropped out of high school. To sup-port them in the schools would have costabout $3.4 billion per year.

To educate those dropouts in YouthCenters would probably be more expensivebecause many have special needs. If weadded a premium of 20 percent for everydropout attending a Youth Center program.and if i', took two extra years in a YouthCenter to attain the Certificate of InitialMastery, the Youth Center system would costabout $8.2 billion per year.

This is a small pric: to pay to assurethat every dropout in the nation acquires theskills and competencies necessary to lead aproductive! work life. If we hope to remaina competithe and productive economy. wecannot afford to lose 20 to 23 percent of ourfuture workers: we must begin taking re-sponsibilit for them,

Who is going to pa) We twee pro-posed that the sche)oi distucts de, so, but it isunreasemable to expect beleaguered innercities and rural communities to pay theadditional costs of dropout recoc ery withouthdp from outside the community. That helpshould he forthcoming from both state and

1 s-5

Federal governments. Some may come fromreallocating funds that now go to wealthierdistricts, but the most likely source will benew revenues. Either way, the sum, thoughsubstantial, is smoll in relation to the certaingain.

tilretsa/ uusterrcy /14,

Aff we hope to remahe acompetitive and productiveeconomy, we caomot qfford tolose 20 to 25 percent qf ourfuture workers,. we mustbeghe taking responsibility fortbem

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11TECHNICAL ANDPROFESSIONALEDUCATION

Recommendation #3A comprehensive system of Technicalatsd Professional Cert(ficates andassociate's degrees should be createdfor tbe majority of our students andads& workers wbo do not pursue abaccalaureate degree.

Our goal is to establish a structure thatwill give our front-line workers the system-atic skills, professional qualifications andrespeci that their counterparts enjoy in othercountries.

The system we propose would alsoprovide a clear structure for young people tomdke a smooth transition from school towork. It would offer them clear routes to avariety of career qualifications. opportunityfor work based learning and an alternativepath to college.

Technical and Professional Certificateswould be offered across the entire range ofservice and man ifacturing occupations. Astudent could earn the first occupation-specific certificate after completing two tofour years of combined work and study.depending upon the field. A sequence of

130

advanced certificates, attesting to mastery ofmore complex skills, would be available andcould be obtained throughout one's career.

This proposal contains four elements:

1. Performance based assessment standardsshould be established for iolr covering thebroad range of occupations in the UnitedStates that do not require a baccalaureatedegree. Achievement of standards wouldresult in awards of Technical and Profes-sional Certificates and associate's degreesfor various mastery levels. The standards,at least equal to those set by other ad-vanced industrialized countries, should beset by national committees convened bythe Secretary of Labor.

2. High schools, community colleges, proprie-tary schools and other educational andtraining institutions should be encouragedto offer courses leading to the Technicaland Professional Certificates and associate'sdegrees. Programs and their providersshould be accredited by state hoards ofhigher and vocational education.

7iximical .4nd Professional Education 131

A National Board fill.Professional and TechnicalStandards should beestablished . ftol .develop a national system qfind.istry based standards andcertifications qf masteryacross a broad range qfoccupations.

Industry and trade basedcommittees appointed ky theBoard would develoovtaWdards for each industty

ul trade.

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3. Employers should puw ide part-time workand training as part of the curriculum ineach certification course and reward those

ho attain the certificates with higherquality jobs and better pay.

4 The ..tote k. and the Federal governmentshoukl furnish four years of financing toall Americans to allow them to pursueeducation beyond the Certificate of InitialMastvry at some point in their adult lives.

A system of industry based skill .:ertifi-cations li:ts a number of attractive katuresIt woukl facilitate communicati, n betweenschools and industry about employer andunion expectatkm, and goals. By setting cri-teria for hiring it would help employers findqualified applicants For employees, it

ould establish clear knowledge and skillbased standards fiif career progres,ion, helppro ent hiriug, discrimination and improvethe transferability of skills. Einall, fiifgmernment, a system of skill based certifica-tm V ould ofF:r an independent means ofassessing the competence of training deliverers.

The Certification SystemA National Board for Professional andTechnical Standards should be established bythe Secretary of Labor with the cooperationof the Secretaries of Commerce and Educa-tion This 13()ard. ctmiposed of distinguished,_presentatiN es of ;.mployers, unions, educa-tion and atkocac groups would develop a

Al bilk (I/ Ohl l'Ifple1(dial I thrtalum

national system of industry based standardsand certifications of mastery across a broadrange of occupations.

Industry and trade based committeesappointed by the Board would developstandards for each industry and trade. EachCommiucc would build upon existingcertification procedures, and develop asingle coherent and internationally competi-tive set of assessments to guide careerprogression within each industry or trade.

The ProgramThe occupational certification programswould be open both to students (as soon asthey receive their Certificates of InitialMastery) and adult workers. The assessmentstandard for a program would be the samefor both adults and students, although thedelivery meL:.anism and curricular detailsmight vary.

Each occupational pn)gram shouldcombine school and work based learningand balance general education and industryspecific requirements. Clear qualificationsand career progressions should be estab-lished with'n each occupation.

Witl appropriate labor standards andother safeguards, the work component ofthese programs could provide industry withthe temporary and part-time workers theysec l.. allowing them to give their full-timewort-ers greater stability. For students, thesejobs would provick. valuable work experi-ence and some income.

133 -8

The system shoukl offer mobility. bothhorizontally among occupations and \ erti-(-ally into options for further training orstudy Above all. it must be designed toavoid dead ends. Young people whosucceed in one of these programs shouldreceive a high-school diploma or anassociate's degree, and should qualify toenter college or a variety of advanced techn;-cal or professional programs

A sample four-year curriculum toprepare manufacturing pniessionals ccnildinclude English. math. histon. statistics.computer programming. co )mmunications.physics. chenustn and operations analysisIt coukl also include industry specific sub-jects such as introducton courses in me-chanical. electrical, chemical and electronicmachinery: instrumentation and testingpnicedures. cost accounting; industrialdesign, and imenton , process and statisticalqiulity control.

A young person \ ho ,:ceives a Certifi-cate ot Initial Masten might pursue thepmgram in high school, a kwal communit)college or in a lw 0-plus-two pro )gram.

indiNicluals seeking a career inretail coukl also pursue a three- ear pn Tramcombining general courses \ ith occupation-specific learning. General courses mightinclude introducton computer pr(Tramming.English and foreigr ' nguages, accounting.

-9 1 4

public speaking, psychology and business.Occupation-specific courses could includeretailing, inventory control, custome: rela-tions. ordering systems, merchandising andmarketing. The program might also includeOptions for specialization in certain products.A program in clothing retailing, for example.might include courses on how diffeient typesof clothing are manufactured, fabric-c'harac-teristics and care, fashion deAgn and so on.

Funding Technical And ProfessionalEducationThe Commission helieves s.rongly that oursociety should provide the resources toallow all students to pursue these Technicaland Professional Certificates. No studentshould be discouraged from doing so forfinancial reasons.

The ast majority of stu.lents enteringthese technical and professional certificationprograms would do so around their junior.ear in high school at age 16.

A substantial amount more than s35billion is already being spent on theeducation hind training of our 16- to 19-year-old population.

All states guarantee free education tostudents in their junior and senior years ofhigh school. These funds could be used forthe first two years of college preparationcourses or professional and technical educa-tion beyond the Certificate of Initial Masteryfor all students.

7ec /mut/ Pnyi,volud Mucation

The system should offermobility, botb horizontallyamong occupations andvertically into options forfurther training or study.Above all, it must be designedto avoid dead ends.

1 5

The specific method (Iffunding chosen is not asimportant as tbe establish-ment id a means to provideuniversal access to seriousppofessional and technicaltrainingfor our non-collegeeducated workforce.

1 q6

In addition, some states also heavilysubsidize attendance at community collegesand universiCes for the 40 to 50 percent oftheir citizens taking post-high-schoolcourses. These funds could be used tofinance the Technical and ProfessionalCertificate programs we propose.

But the current financing systems forpost-secondary students who are not study-ing full time for a baccalaureate dewee areinadequate and Line\ en The Commissionbelieves these students deserve the samekind of support that four-year college stu-dent,. recen e. A mechanism should becreated that provides four years of fundingbeyond the Certificate of Initial Mastery for

eryone. That mechanism could make useof the funds already available, but it shouldprovide a means to meet the needs of evelycandidate for Technical and ProfessionalCertificates.

The needed funds could result from amodification and extension of existingprograms or from new sources.

At one extreme, a 'GI Bill system couldhe funded from general revenues to guaran-tee everyone four free years of educationbeyond the Certificate of Initial Mastery.Studies indicate that the 'GI Bill' paid foritself many tiMes Mer in increased incomefor America.

Iir% /Mica/ .111d PrOfrsmona/ kdlic( non

At the other extreme, a self-financingscheme could be created whereby thegovernment would loan all students thefunds for post-secondary professional,technical or college education and thenrecoup the loan through a small surchargeon an individual's income taxes over manyyearS.

We call upon the National Center onEducation and the Economy to convene apanel of experts to make recommendationsfor funding the system we propose.

The specific method of funding chosenis not as important as the establishment of ameans to provide universal access to seriousprofessional and technical training for ournon-college educated workforce.

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12LIFELONG LEARNING ANDHIGH PERFORMANCEWORK ORGANIZATIONSRecommendation #4All employers should be given incentivesand assistance to invest he tbe pothereducation and training :Ai- tbeir workersand to pursue bigb productivity formsof work organizatiott.

America's productivity in the 1990's willclimb only if the strategies of Americanemployers are redraftc.d to include seriousinvestments in work reorganization and

orker training. While man) employers talkabout human resource issues, t(x) fewconsider them to he fundamental to theirorganization's success

To make full use of the productivep()tential of our N1 orkforce and to encouragethe use of high productivity models of workorganization. N1 e recommend that employersbe provided ith financial incentives to traintheir workers and w ith the technkal assis-tance necessary to move toward higherproducti)ity work organizations

Other countries are dri)en to pursuehigh pnklucti)ity work because public la N1 smake it difficult to pay low N1 ages and layoff workers. National full-employment

81 :18

policies, stringent severance arm layoffnotification laws, high minimum wage lawsand statutes requiring union approval ofmanagement actions all motivate foreigncompanies to invest in their workforces.Since this is a Commission on workforceskills, we have not addressed these broaderpolicies directly.

However, other nations are also drivento high performance work organizations bylaws that require companies to invest directlyin the training of their workers (see Support-ing Information IV). In many advancedindustrial nations, laws require companies tospend between one percent and three and ahalf percent of their payrolls on formaltraining programs (beyond normal on-the-jobtraining).

Because this is required, companies areencouraged to think about how to make thebest use of these funds to develop skills.

In this country, only a handful of ourcompanies invest in training. Those who donot, fear that such investment:z will bewasted, because trained employet.s will be

Lifelong Learning And High Peiformance Work Organizations

America's productivity in tbe1990's will climb only (f thestrategies of Americanemployers are redrafted toinclude serious investments inwork reorganization andworker training.

. we recommend tbatemployers be provided witbfinancial incentives to traintheir workers and with thetechnical assistancenecessary to move towardhigher productivity workorganizations.

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ensplayers trou'd berequired to spendapproximately one percent ofpayroll On education multraining. . .

Emphiyers failing to meet thistaiget imuld be required tocontribute appiwximately onepercent nipariwIl to avationa.' Skills DetvlopmentFund.

All companies. organizationsand institutions, regardless ofsize or type of business.including local and stategoverninents and schools,would be requb-ed toparticipate.

140

hired away. Others simply do not see thevalue of significant training investment,because of the way they use their workers.

Compulsion is never a popular ap-proach to puNic policy. Playing copy-catwith the polides of other countries is notwhat made this country great. However, thesmall minority of our companies that cioinvest in training, either out of competitivenecessity or simply because it makes go(xtbusiness sense, are not being treated fairly.They are carrying the national trainingimperative on their backs.

The overriding issue is noi the eco-nomic survival of a few employers; it is theeconomic security of an er.tire workforceThe nation will not compe:e effectielyunless all employers participate in a set offinancial incentives to train their workers.

An Incentive For Training And WorkReorganizationAmerican employers on average spendslightly more than one percent on formaltraining. 11 wever, the distribution ofspending is highly skewed. A. small percent-age of firms spend more than two percent,while the vast majority are well below onepercent.

We recommend that th Federal gov-ernment require all employers to spend aminimum amount of funds annually to sendtheir employees through certified education

and training 1,rograms. In unionized work-places, compaqies and unions should jointlynegotiate ,,nd administer the training pro-grams.

Initially, employers would be requiredto spend approximately one percent ofpayroll on education and training (with theamount increasing progressively over thedecade). Employers in many foreign coun-tries are already required to invest a mini-mum of one percent in employee training.Companies should fund training for front-line workers in proportion to their totalrepresentation in the firm's worktbrce.

Employers failing to meet this targetwould be required to contribute approxi-mate4 one percent of payroll to a nationalSkills DeveloPment Fund. The exact amountfor each organization would be calculated asa specific payment per worker, in order toensure sufficient resources to train lowerpaid worker

The Skills Development Fund would beused to train temporary, part-time, dislocatedand disadvantaged workers whose trainingemployers would probably not underwrite.

All companies, organizations andinstitutions, regardless of size or type ofbusiness, including local and state govern-ments and schools, would be required toparticipate. The Comniision feels stronglythat this expenditure should come fromemployer, not employee, contributions. Thecontribution would thus give employers an

1411 Ileking learnt .lud Peyomumie tt rk ONantzahons 82

incentive to reorganize work to take advan-tage of the higher skill levels for whirh theyare paying

Until the various certificate programswe propose are implemented. employersshould be Allowed to use their trainingallotment for tuition and instructional costsfor any type of organized instruction (notincluding direct efforts on the lob). Theprogram should be approved by the union ifthere is one.

After the cxcupational certificationprc)grams ire established, however, werecimimend that only accredited courses thatform part of a formal certification program ora college degree program he counted towardthe empk,er's minimum training obligation

Tying acceptable expenditures tocertificate pr(Trams makes the expenditureeasy to monitor, ensures that funds are notbeim. spent on frix ohms actix Ines and helpsemplo)ees ohtain skilk that haxe broadapplication.

Developing emplocvs skilk, how ecer,does not necessarily lead to smooth orsuccessful reorganization of IA ork For thisreason, the Commission recommends that upto 15 percent of the funds be used forexpenses associated IA ith efforts to redesignwork. Acceptabk activities might includeresearch and development on competencybased training or on high productivity workreorganization.

142

Each year, employers would be askedto certify that they had met these trainingand education requirements, perhaps as partof the unemployment insurance tax form. Nonew bureaucracy would be needed and thereportin6 requirement would be minimal.California and Rhode Island, among otherstates, are already collecting funds for train-ing through the unemployment insuranceprogram.

This proposal may appear burdensometo small companies that do not competeinternationally or perceive no need fortraining. But the most equitable initiative isone that treats all companies and institutionsuniformly. If employers cannot or will notmake the necessary investments to train their

orkers today, the government will heforced to tram them tomorrow A skilled.productive IA orkforce benefits our nation'seconomic well-being It is everyone's re-sponsibility.

For that reason, the Commission feek.that the proposed method for financingfurther training is fair and reasonable, how-ever. other proposals might also be used

For example. companies below acertain siz, might be exempted from thisobligation and training for their employeescould he provided through the Skills Devel-opment Fund. Another possibility is to usepublic funds to finance continuing educatkmand training. A third alternative would be to

1 nelong teaming .1ial High Peijonnance tt'ork Organization%

. . only accredited coursesthat form part of a formalcertification program or acollege degree program(should) be counted toward tbeemployer's minimum trainingobligation.

. . . up to 15 percent of tbefunds . . . [could./ . . . be used forexpenses associated withefforts to redesign work

143

Reorganizing toward higherproductivity forms qf workmay seem risky and evencompanies that arecommitted to this path oftenlack tbe information ortechnical expertise necessaryto accomplisu the task. Thisis especially true for thenation's small irtsinesses.

VT -e therefore make two

proposals. First, that anational inftwmation andtechnical sert'ice beestablished to providesupport to companies in thereorganization qf work.Secoml that national qualityawards be expanded torecognize more best-practkecompanies.

144

create an individual training account fi-nanced hy companies and by the govern-ment.

Each method has advantages anddisadvantages. Here again, the details of thefinance plan are less important to this Com-mission than the necessity of developingsome means of investing in our front-lineworkers. Virtually every advanced industrialnation uses one or another of these methodsto create a substantial fund to support thecontinuing education and training of work-ers. We are one of the few with no method

and no fund at all.

Incentives To Create HighPerformance Work OrganizationsReorganizing toward higher productivityforms of work may seem risky and evencompanies that are committed to this pathoften lack the information or technicalexpertise necessary to accomplish the task.This is especially true for the nation's smallbusinesses.

We therefore make two proposals.First. that a national information and techni-cal sen ice he established to provide supportto companies in the reorganization of work.Second, that national quality awards beexpanded to recognize more hest-practicecompanies.

Technical Assistance For EmployersThe United States Department of Commerceshould establish a National Clearinghouse forthe Reorganization of Work and WorkforceSkills Development. The Clearinghouse .

would be responsible for coordinating allFederal assistance to employers and shouldwork closely with the D-Tartments of Labor,Defense. and Education to:

Disseminate information on successfulforms of work reorganization acrossindustries and types of businesses.

Promote and help coordinate educationalvisits to successful high performance worksites.

Provide a one-stop shop for firms seekinggeneral or specific guidance and solutionsto challenges encountered during thetransition to new forms of work.

Distribute examples of best-practicecompanies, as well as materials from otheragencies, such as the Department ofDefense's training methodologies andinstructional programs.

Encourage partnerships among state, localand private sector groups.

The National Science Foundationshould he given a mission to improve work-place practices through the development andapplication of new technology.

I ii, long Learning .4nd Mgh Peribmance Work Organizattom 1 45 84

We endorse the establishment of acivilian technology agency in the Depart-ment of Commerce. Such an agency would,among many other functions, have theresponsibility to help companies organizework so as to make the most efficient andeffective use of new technologies.

Federal raboratories in seve:al Cabinetdepartments shoukl be asked to devotegreattr efforts to the commercial applicationsof the technologies in which they are in-volved and to training companies in imple-menting high productivity work organiza-tions r,:la tx.1 to those technologies.

The 1988 Omnibus Trade and Competi-tiveness Act established three manufacturingtechnology centers and provided fe- assis-unce to state technology centers. These, too,could become a focal point for assessing anddisseminating effective approaches to theorgan'zation of work to businesses interestedin making the most effective use of newmanufacturh g technologies.

Quality AwardsTo focus national attention on the issue ofwork reorganization, awards programsdesigned to recognize and promote quality,excellence, productivity and improvedworkplace environments should be ex-panded.

The Malcolm Baldrige National QualityAward contributes significantly to the na-tioral awareness of quality and the reagani-mtion of work. The Senate prodt hvity

85 146 a

awards and F / awards also playimportant roles. We .,commend expansionof these awards to recognize more best-practi,:e compinies and institutions.

Hie Department of Labor has recentlyest-blished a new award to recognize excel-lence in upgrading the quality of the Ameri-can workforce. We strongly urge that, as partof its criteria, the award include changes inthe organization of work and their effect onworklife and employee productivity.

lifelong Learning And Higi, Performance Wcrk Organizations

Federal laboratories beseveral Cabinet departmentssbould be asked to devotegmater 'JAM to tbecommercial applications qftbe teclonologies be wbkb cbeyare hem ,ed and :o trainingcompanies be impkmentingbigb produaivity workorganizations related totbose tecbnologies.

147

13AND A SYSTEM TO PULL ITTOGETHER

Recommendation #5A system qf Employment and TrainingBoards should be established by Federaland state governments, together withlocal leadership, to organize and over-see tbe new scbool-to-work transitionprograms and training systems wepropose.

In this report, we have comparedAmerican educational and training programsto those in other industrial countries. Inevery case, we have found that somewherein this country, a state, city or institution isdoing something as interesting, as imagina-tive and as effective as anything done any-where in the world.

What is missing is a cohesive system.What we 1-.-k, and what many of our com-petitors hat.e, is a means of joining all thepieces together into one seamless web.

Our preceding proposals lay the foun-dation for a cohesive, high performanceeducation and troining system. We wouldreorganize the current array of programs and

1 4 S87

institutions into a streamlined system basedon two sets of goals:

We expect our standards for the Certificateof Initial Mastery to drive a system ofwork preparation designed to bring everyAmerican, youth or adult, up to a highlevel of foundation skills. These standardsshould be applied to every program orinstitution concerned with baic educationor literacy. This would include our currentK-12 system of education, the alternativeYouth Center system we propose andremedial programs for youth and adultsoperated through a variety of publicprograms.

We expect our standards of technical andprofessional mastery to drive a system ofoccupational education and trainingdesigned to allov a majority of Americanworktrs to thrive on new technologiesand work processes. These standardswould apply to corporate training and toprograms in high schools, communitycolleges and proprietary schools. Thus,no matter where the training took place,

And A System To Pull It Together

Progressing Through The New Structure:Four Examples

t

45-Year-OldHotel Attendantwith Fifth Grade

Educazion

15f)And A System To Pull It Together

employers and individuals would haveconfidence in its quality and its transfer-ability.

The certification s stems we propose,and the tducation and training initiativesthey drive, should be linked to labor marketinformation and to job placement programsat the local and state levels. The fragmentedservices we now provide should be replacedby a uniform system.

Employment And Training BoardsThe leaders of our communities shonld takeresponsibility for building a comprehensivesystem that meets their needs. The localEmployment and Training Boards for eachmajor labor market would:

Take responsibility for the scho(4-to-workand '1outh Center-to-vork transition foryoung people. and for their further coun-seling on education, training and workopportunities.

Manage and oversee the alternative certifi-cation system fc)r scluml dropouts throughthe Youth Centers.

Manage and oversee a second chancesystem for adults seeking the Certificate ofInitial Mastery. This system would beoperated in conjunction with the YouthCenter program, but may require separatefacilities and programs for adults

1528)

Manage and oversee the system for award-ing Technical and Professional Certificatesat the local level.

Manage a labor market information systemto guide program planning. The Boardwould maintain a data base containingdetailed information on the offerings ofservice providers (including their qualityex.ord and the costs of their services). It

\oeld also include information concern-ing the number of trainees registered in allareas of training in any given year. theannual record of placements, job openingsand the expected demand for hbor in allfields.

Manage a labor exchange service, whichwould provide information, counsdingand contacts for individuals sedan% jobopportunities. The service would drawheavily :)n the data base just described.

Coordinate existing programs concernedwith job placement, vocational education,customized job training. j'IVA and weltarerelated job training.

The Boards Y'iould be comp sed ofcompany, union and public official, as wellas representatives of community basedorgar,ization:.. The Boards should also heable to competate and attract a highlyprofessional staff.

Service on the Boa* should be re-garded as a mark of hign honor and mem-bership :)n the staff should be seen as a high

And A System To Pull It Together

The local Employment andTraining Boards for eachmajor labor market would:

Take responsibility for tbeschool-to-work and YouthCenter-tv-work transitionfor youvg people.

Manage and oversee theYouth Centers.

Manage and oversee asecond chance system foradults seeking tbeCertificate of InitialMastety.

Manage and oversee tbesystem far awardingTechnical and ProfessionalCertificates at the localleveL

Manage a labor marketitlformation system.

Manage and oversee tbe Jobservice.

Coordinate existingprograms.

153

We envision a new morecomprehensive system whereskills upgrading for themajority of our workersbecomes a central aim ofpublic policy. It begins withthe inidal skills preparationfyoutb and their school-to-

work transition. It continueswith tbe operation of skillsupgrading programs foradult workers who bare jobs,or are between jobs. It tiestogether this central missionwith job information,employment counseling, jobplacenwn: and hiCuiiicmaintenance for theunemployed

5 4

point in one's career. Boards can andshould be designed to attract some of themost competent and dedicated people in thecommunity.

In cases where labor, management andthe community agree they have been effec-tive. Private Industrial Councils could beused as a base on which to build the Boards.

The states would need to create aparallel structure to support the local boards,coordinate statewide functions and establishstate standards for their operation.

States would also need to work witheach other, perhaps through an interstatecompact, and with the Federal government,to make the national system work smoothly.

As part of this national structure, itwould be wise for the President to create aCabinet council that would be directlyresponsible to the Office of the President forcoordination of Federal government policyand programs relating to human resourcespolicy.

A New Approach To American LaborMarket PhilosophyUnderlying this proposed structure is aphilosophical change in the way we as anation view human resources policies.Traditionally we have operated systems thatwork on the margins of our labor market,linked primarily to income maintenance

And .4 Sy.stem To Pull It Together

systems for the disadvantaged and dislocatedworkers, using short-term training as onemeans of assisting with job placement.

We envision a new, more comprehen-sive system where skills upgrading for themajority of our workers becomes a centralaim of public policy. It begins with theinitial skills preparation of youth and theirschool-to-work transition. It continues withthe operation of skills upgrading programsfor adult workers who have jobs, or arebetween jobs. It ties together this centralmission with job info- Jion, employmentcounseling, job plact.nent and incomemaintenance for the unemployed.

It is this bold, new agenda whichnecessitates the creation of a more uniformsystem to replace the existing variety ofagencies.

1 5 590

toward an economic cliff.longer be able to put a higher

prOportiOn of our people to work to gener-ate ecohomic growth. If basic changes arenot made, real wages will continue to fall,especially for the majority who-do notgraduate from four-year colleges. The gap

economic 'haves' and 'have nots'will widen still further and social tensionswill deepen.

Our recommendations provide analternative for America. We do not pretendthat this vision will be easily accepted orquickly implemented. But we also cannotpretend that the status quo is an option. It isno longer possible to be a tugh wage, lowskill nation. We have choices to make:

Do we continue to define educationalsuccess as 'time in the seat,' or choose 1,new sy. tern that focuses on the denu)n-strated achievement of high standardsi

Do we mntinue n) pro\ kle little iniento.for non-college students to stud\ hard andtake t0tIgh stthick Is, Ut ho( )se a s\ stemthat will reward real ett'ort \\ ith .ttet

and better johs%

1 5 6

Do we continue to turn our backs onAmerica's school dropouts, or choose totake responsibilky for edncating them?

Do we continue to provide unskilledworkers for-unskilled jobs,- or train skilledworkers and give companies incentives- todeploy them in high peffonnance workorganizations?,

Do we continue in most companies tolimit training to a select handful of manag-ers and professionals, or choose to pro-vide training to front-line workers as well?

Do we cling to a public employment andtraining system fragmented by institutionalbarriers, muddled by overlapping bu-reaucracies and operating at the marginsof the labor market, or do we choose aunified system that addresses itselt a

illapHitv of workers%

Do we Lontinue reinain indifferentthe lu A\ \\ age path being ihosen b man\Lompanies. oi do w e pro\ ide InC enti\ estor high produiti\ it \ i hoIces!

t

1 t; 0.( 1

e systems we propose

provides a amigos* Ataerkanadagio* Bolty executed, itbas tbe potential not sump&to put us on as equallootingwith our conspetitors, but toallow us to kap abea4 tobuild tbe world's premierworkforce. In so doing, wewill create a formidablecompetitive advantage.

Taken-together, the Commission'srecommendations provide the immewolk far

Atigh quality Americandon and trainktit system, closely linked tohigh performance worksystem we peal:KeeAmerican sokition. &lyji hasthe potential not simply to put us on anequal footing with our competitors, but toallow us to leap ahead, to build the world'spremier workforce. In so doin& we Wincreate a formidable competitive advantage.

The status quo is not an option. Thechoice we have is to become a nation ofhigh skills or one of low wages.

The choice is ours. It should be dear.It must be made.

1 5 8

In Conclusion

I

/*

THE STUDY

This Commission is deeply indebted to manywho have studied the skills of America'sworkforce before us. Two recent reportsstand out. Workforce 2000: Work andWorkers for the 21st Century, produced bythe Hudson Institute under a grant from theUnited States Department of Labor, made apowerful case for putting the issue of work-ers' skills squarely on the nation's agenda.The Forgotten Half Non-College Youth inAmerica, a report from the William T. GrantCommission on Work, Family and Citizen-ship, made an eloquent plea for attention tothe needs of American youth who do not goto college This is the group with which thisCommission is primarily concerned. To-gether, these reports defined the startingpoint for our work.

The study which supports this reportwas carried out by a research team of 23loaned executives from companies, unions,industry associations and the United StatesDepartment of Labor. The work began inJuly of 1989 and was completed in June of1990.

Our study began in the United States,where we divided the American economyinto industry groups and interviewed firms ineach one.

95

Starting at the top of the firm, we askedthe executives to define their market andtheir competitive environment, what thedrivers of competitive success in their indus-try are, how they organize their workplaces,how their work organization is changing,what skills their workers need, what they aredoing to make sure those skills are availableand what government services they use.Then we went down to the shop floor, officeor construction site and asked a different setof questions: How is each job defined?What 3kills are required to perform that job?How are people s assignments changing?Are managers having trouble hiring peoplewith the needed skills, and, if so, what isbeing done about it?

When we had completed these inter-views, we went abroad to six countries:Germany, Sweden, Denmark, Ireland, Japanand Singapore. There, we repeated theprocess on a somewhat attenuated scale,selecting and interviewing firms in a widerange of industries, asking much the samequestions we had asked at home. We alsoconducted interviews and gathered data onthe economic and human resources policies

1 60 The Study

of those countries, as well as the structureand operation of their social programs,particularly those relating to education,training and other labor market policies.Here, too, we relied not just on publiclyavailable data, but went further, interviewingpeople at every level of the system, fromcabinet ministers to people taking courses intraining centers. Gradually, we put togethera cemposite picture, in some detail, of howthe whole system fits togethefin eachcountry, how values interact with policy,practice, history and demography to framethe way each nation is going about thebusiness of developing a skilled workforce.

We concentrated the next stage of ourresearch in several states. In each of thesestates, we selected one or two major labormarkets. Just as we had done abroad, weproceeded to put together a picture of thelabor market and how it actually operates,how federal, state and local policies interactwith the practice of private finas, publicagencies and education and training institu-tions to define the American system for skilldevelopment and employer demand forskilled labor.

We then drew upon the experience of anumber of our Commissioners and CaseTeam members and asked them to preparepapers in selected fields of expertise. Theseincluded looks at the history of federal andstate labor market policies; an analysis ofapprenticeship and industry institute training

The Study - I 6 1

models; an analysis of 'best practice' pro-grams for dropout recovery and publictraining; a view of educational assessmentmodels now under study in various states; .

and a paper on the financing of America'slabor and education systems.

Before we were done, we conductedinterviews with more than 2,000 people atmore than 550 firms and agencies, notcounting innumerable local labor marketinterviews. Ail along, we read a smallmountain of government and private reportsand analyzed data not based on our ownfield research.

The study was comprehensive in scope.Our subject required the integration ofinformation from diverse disciplines: corpo-rate strategy, labor market policy and educa-tional policy across a number of countries.While our work was thorough, it was con-ducted as a strategy study, not an academicinquiry. Our intent was to gather sufficientinformation and do adequate analysis tomake policy recommendations.

Our corclusions are based in part upondata from our study. They are also based onthe collective wisdom of our Commissioners,who have years of experience addressingissues of labor policy, education and corpo-rate strategy.

96

SupportingInfirmation

4

A

I.

I

0111

SUPPORTINGINFORMATION IA NEW AMEnICANASSESSMENT SYSTEM FORFOUNDATION SKILLS

Assessment System For FoundationSkillsProperly designed, assessment systemshould function both to motivate and organ-ize students' work during the school yearsand set a benchmark to which educationalinstitutions could target their efforts. Tomeet these objectives, the system we recom-mend should:

Reward effort and organized work.

Demand thinking and reasoning skills ofthis nation's students, preparing them formore complex work environments.

D;rectly assess thinking based achieve-ment, using examinations equal to thetask.

Allow students to accumulate evidence ofachievement and accomplishment, ratherthan relying on a single point of examina-tion to determin-! performance.

Be administered and directed by an inde-pendent certification agency.

99

Effort Based, Not Arbitrary, EducationAnd AssessmentThis Commission proposes an educationalsystem that provides clear incentives andgoals for students, measures educationalattainment and skill competencies andrewards a student for effort and perform-ance.

The current educational structure in theUnited States does not adequately measurenor reward a student's effort or academicperformance. Due to the way they areexamined and graded, students are not heldto a clear standard of achievement towardwhich they can work.

For students who do not plan to go tocollege, high-school grades often have littlemeaning. As very few employers scrutinizehigh-school transcripts when making hiringdecisions, what compels students to do morethan the minimum required tc obtain apassing grade? What motivates a student towork hard in school?

Grades have more meaning for collegebound students, but grades alone do notdetermine a student's acceptance or rejectionfrom the college of choice. Admissionsofficers look at performance on standardized

1 R3 Sttpporttng Infigmatton I

national tests, like the ACT and the SAT.However, school curricula are not directlytied to these tests. Students have no way ofadequately preparing for them, save thecram courses that teach shortcuts, but notsubject content. Compounding this, teachersare often actvisectnot-to de/irltely preparetheir students for these exams so as to avoktbeing accused of giving them an 'unfair'advantage.

For either type of student, effort is notdirectly tied to results. Currently, no one canbe held accountable for how students per-form in school. If students who barely makeit through the system receive the samereception in the workplace as those whoreally put forth an effort, is it surprising thatsome students do not take their educationseriously?

An examination based achievementcertification system-can fundamentallychange this. At the heart of such a systemmust be a series of examinations for whichstudents can explicitly prepare, with teachersserving as their coaches, mentors and allies.

Thinking Based Achievement, NotRoutinized SkillsLike other industrialized countries in thenineteenth century, the United States devel-oped two different levels of educationalexpectation one for an academic elite, theother, for the rest of the population. Themajority of students was expected to learn

Supporting Information 11 P 4

routine skills, simple computation, reading ofpredictable texts and reciting civic or relig-ious codes. They were not expected to learnhigher-order functions of thinking andreasoning. These goals were reserved forthe elite, originally in separate high schoolsand more recently in college preparatoryprograms in our comprehensive schools.The curriculum most Americans are exposedto gives them little chance to learn to con-struct convincing arguments and to under-stand complex systems.

A thinking oriented curriculum for allconstitutes a significant new educationalagenda. While it is not new to includethinking, problem solving and reasoning insome students' school curriculum, it is newto include it in everyone's curriculum. It isnew to aspire seriously to make thinking andproblem solving regular aspects of theschool program for the entire population,including minorities, non-English speakersand children of the poor. To meet thechallenge, we must have an achievementcertification system in which me examina-tions assess the kinds of high level compe-tencies to which we aspire. Current forms oftesting do this very poorly.

The system of routinized rather thanthinking based achievement forms the basisfor testing theory and practice even today.

100

Three kinds of examinations can be used:

Performance Examinations. TheOlympics and the performing arts use thistype of examination to determine anindividual's qualifications. It is equally well-suited to assess academic ability and effort.This exam differs fundamentally from themultiple-choice kind of test, in that it meas-ures process as well as end product, and ithas no elements of surprise. Students takingthese exams are aware of the type of per-formance expected of them, and they areable to take the necessary steps in prepara-tion. Teachers can prepare students for theexams, acting as coaches and mentors, ratherthan adverFaries. In the system we envision,both traditional academic and more practicalperformance would be assessed. For ex-ample, practical literacy might be assessedby asking Certificate candidates to assembleequipment following written instructions anddiagrams; and ability to work with others inmaking decisions might be, assessed byrating candidates' performance in an eco-nomic simulation game.

Performance examinations could becarried out either in a live setting, with ateam of judges grading specific features ofthe performance and the overall quality, orthe product of the performance could bescored in place of the live performance. Thelatter option substantially reduces the cost ofperformance examination, making it a viablecomponent of a mass assessment system.

lipportnig hybrmation 1 leC

Portfolio Examinations. This formof examination is modeled on methods ofassessment used in the visual arts in which ateam of judges rates students' products onseveral different criteria. Certain academicskills, especially writing, are well-suited tothis type of assessment, as time based examsimpose unnatural constraints and do notaccurately capture a student's true ability.Current experiments show that this type oftest can have direct educational value: byworking with their teachers in selecting thebest of their work for inclusion in the portfo-lio, students build explicit understand14 ofstandards of judgment.

Project Examinations. The third formof examination evaluates extended participa-tion in learning. These examinations ale thebest way of assessing motivation and socialskills, because judges evaluate a record ofcandidates' extended participation in a taskwith real meaning and consequence in theworld. For example, students might under-take Ali extentied'applied science projectsuch as designing a bridge, conducting aninvestigation of an aspect of community life,or planning and carrying out a constructionproject. Students would be required todocument the major steps taken, supervisorswould sign off and sate the project at desig-nated stages and a final grade would bedetermined, taking into account a wholerange of criteria.

102

Any of these examinations taken alonewould serve to provide a clear link betweeneffort and assessment, measurable by thestudent, the teacher and_.the community atlarge. A combination of the exams, depend-ing upon the skills or knowledge to bemeasured, would provide an even betterpicture of a student's achievement.

A Cumulative Certification SystemThese examinations should be viewed asbuilding blocks rather than high stakesmoments of possible failure. The achieve-ment certification system we propose shouldpermit students to assemble certificationcredentials over a period of years, perhapsbeginning as early as entrance into middleschool. This kind of cumulative certificationhas several advantages over a single point ofexamination.

It helps to organize and motivate studentsover a period of years. Rather thanpreparing for a distant examination whoseform and demanth can be only dimlyimagined by tl-:-. 11- oi 12-year-old,students can begin to collect specificcertifications.

It provides multiple opportunities forsuccess. Cumulative certificates are ourbest shot at drawing in the presentlyundereducated and undermotivated.

/0 3

A cumulative credentialing system, be-cause of its transferable nature, permitsstudents who are not being well taught inthe mainstream educational system to earntheir credentials under other institutionalauspices.

This system avoids the problem of mini-mum credentialing standards becomingfunctionally the maximum. Students whocomplete the base certifications early intheir schooling can start working onadvanced certificates either in schoolsand colleges or in workplace trainingsites.

A cumulative system will avoid the phe-nomenon of 'examination hell' a yearor two of high-tension devotion to noth-ing but exam study that plagues severalcouatries (such as Japan and France) thathave single point-of-exit examinations.

An Independent ExaminingOrganizationCredentials and certification should bedetermined by an organilation independentof school systems and free from politicalinfluence. The Governing Board of thisorganization should be broadly representa-tive of educators, employers and the citi-zenry at large.. Under the Board's generaloversight, working commissions in severalknowledge and skill domains should deter-

1 R 7 Mlporting Injhrmanon I

mine appropriate skills a.ld knowledge forcertification standards, establish the per-formance, portfolio and project examinationsprocedures and oversee the professional andobjective nature of the judging of theseexams.

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I R S

Supporting litliomunwi 1 104

SUPPORTINGINFORMATION IIALTERNATIVE PROGRAMS FORAT-RISK YOUTH: SWEETWATERUNION HIGH SCHOOL, THE

.139,1T9N PCIAIWT AND THEWEGMAN'S PROGRAM

The dropout problem and the ill-defmed andoften restrictive school-to-work transitionhave spurred communities from coast tocoast to devise al*.emative programs for theiryouth. Sweetwater Union High School, theBoston Compact and the Wegman's Programare three good examples.

Sweetwater Union High School:Dropout RecoveryThree years ago, in a determined attempt toreduce its growing dropout rate, theSweetwater Union High School District inSan Diego, California set up an alternativesystem for students to acquire their high-school diplomas. Two relocatable buildingswere Set up ncxt to-the high school andequipped with classrooms of computers andsoftware necessary to provide a full high-school course offering.

Sweetwater's superintendent found away to reverse the traditional incentives thatencourage professionals to get rid of theleast desirable students. He decided tooperate the program as a business. Ninety-four percent ot the revenue (derived from

105

the entire state allotment for each dropoutattracted to the center) would go to theschool. The school would pay all operatingexpenses including staff salaries, but thertmaining 'profits' would belong to theschool and could be spent at the principal'sdiscretion.

Today, former dropouts sit at computerterminals, fully engaged in their studies,well-behaved and full of hope. Many arewell on their way to receiving their diplo-mas. Of the most recent group of graduates,approximately 60 percent have enrolled incollege. These are the very same studentswho, a few years earlier, would have beenejected from classrooms for disruptive

,behavior,or who would, have quietly slippedout of school, feeling it had nothingid Offer."

The district does no recruiting for theprogram. Word of mouth has produced awaiting list of those who want to enroll.

The high quality of education thestudents receive ard the flexibility of sched-uling are key components of the success ofthe system. Students can both go to school

1 69 Supporting Information 11

and work full-time, and can participateany of the school's extracurricular or socialactivities.

In a conventional program, the districtwould have had to build a $35 millionphysical facility for these students. But therelocatable classrooms and computer equip-ment cost a tiny fraction of that amount, andthe program has requked no new staff. Mostimportant, 6,000 young people who had littleto look forward to in life now have a goodstart.

The Boston Compact And ItsCommitment To Boston's YouthThe current labor market structure makes itvery difficult for low-income young people

White, Black or Hispanic to getmatched to jobs. The first roadblock theyencounter is access to information or peopleconcerning jobs. Too often, they and theirparents lack the personal contacts and theresources of their middle class counterpartsthat would enable them to get that firstinterview.

The powerful negative stereotypes thatexist on both sides of the hiring equationmake looking for a job that much moredifficult for these youth. Employers cannothelp but be swayed by what they see inprint about inner-city youth. And inner-cityyouth, especially minorities, have their ownnegative ideas about downtown hiringpractices.

170

The Boston Compact, a community-wide commitment to improving the educa-tional achievement of Boston's public schoolstudents, has put the issue on the city'sagenda. Some of the strongest initiativesinclude:

A school system commitment to measur-able improvements in student attendanceand academic achievement.

A private sector commitment to employstudents in the summer and upon gradua-tion through the Bosion Private IndustryCouncil.

The school-based Careers Service, whichcombines the resources of the school andbusiness communities to create linkagesbetween inner-city youth and employers.

The contribution of $17 million by thebusiness community to a fund to aidpublic education, including a 'last dollarscholarship' program for all graduatesadmitted to college.

The agreement between city high schoolsand the 24 area colleges and universitiesto increase the number of students goingto college and graduating.

Tiv- commitment of the Area BuildingTrades Council (AFL-CIO) to increase theenrollment in apprenticeships for Bostonhigh school graduates.

Supporting InjOrmation 11 4 106

A commitment to measure results carefully,including a survey of all students in thefall after graduation to ascertain theireducation and employment circumstances.

An examination of one of the programs,the Careers Service, shows how commitmentto youth can ease the school-to-work transi-tion, espedally for the disadvantaged.

The Service, a joint effort of Boston'seducational and business communities,under the direction of Boston's PrivateIndustry Council, employs career specialistswho work with students, teachers, staff andemployers to pair students with jobs. Thereare no guarantees for employment. Both thestudents and the employers must be con-vinced that the matches fit before any com-mitments are made on either side.

Currently, some 900 firms in the cityparticipate in the summer jobs and thegraduate hire programs. Personnel officerswork with the service's career specialists,exchanging information and opening doorsthat were formerly closed to Audents.

The results have been dramatic. In1989, 3,316 high-school students foundsummer employment at an average wage of$6.08 an hour. That same year, 1,107 gradu-ates were hired for permanent, full-timepositions at an average wage of $6.75 anhour. Graduates from Boston high schoolsfound full-time jobs through the CareersService, at an average wage of $8.43 anhour.

A comparison of the 1985 survey ofBoston graduates with BLS numbers for thenation shows employment for 62 percent ofthe White (10 points above the nationalrate), 60 percent of the Black (32 pointsabove), and more than half the Hispanicgraduates (11 points better than the nationalrate).

Employment/Population Ratios forClass of 1985

U.S.A. BostonWhites 52% 62%Hispanics 43% 54%

Blacks 28% 60%

For graduates of the class of 1988, theBoston PIC reported that 66 percent ofWhites, 58 percent of Blacks and 71 percentof Hispanics were employed.

An analysis of wages a year and a halfafter graduation for the class of 1988 byProfessor Andrew Sum of Northeastern'sCenter for Labor Market Studies showsBoston's non-college youth earning $8.04 anhour, nearly half again as much as the $5.40non-college high-school graduates in othercentral cities surveyed by the Census Bureau.

This survey's results are important intwo ways: First, they show how much acommitment to improving current systems

1 7110' Supporting Inf0rmallonll

can provide students, regardless of back-ground, with a positive future; second, theyunderline the need for accessibility andtimely transmittal of data so that thoseinvolved can see the concrete results of theirhard work and effort.

While the external partners have madeprogress toward their goals, school improve-ment has come slowly in Boston. At theBoston PIC annual meeting in 1988, thebusiness community and the mayor refusedto renew the Compact until satisfied that thestructure of the schools would improve. ByMarch, 1989, when Compact II was at lastsigned, the leadership of the Boston PublicSchools and the Boston Teachers Union hadcommitted to a contract incorporating schoolbased managemi .it and a new accountabilitysystem that measures individual schoolperformar

Reccgnizing that entry level jobs are notenough to assure economic security, Com-pact II sets a goal of building links betweenwork and further learning &Ting Lhe fouryears after high school for those students notgoing to college. The first project under thisilew effort is designed to lead to professionalcertification and an associate's degree in thehealth professions for students.

With technical assistance from theNational Alliance of Business, 12 cities inaddition to Boston are developing compactsbased on agreements between schools,business and government to carefully meas-

172Supporting Information II

ure progress toward improvement in educa-tion and employment for young people.

The Wegmnn's ProgramWegman's Supermarkets in Rochester, NewYork offers an example of a company thathas taken up the challenge on its own. Forseveral years, the owners of Wegman's havebeen offering part-time supermarket Os tr14-year-old students who are identified bythe local schools as likely potential dropouts.The one condition for employment is thatthe students must stay in school to keep thejob.

A Wegman's employee works at theschool district headquarters to coordinate theprog. an with parents and teachers, recruitstudents, monitor their progress and helpIi 1 out if they get in trouble. Employees atthe supermarkets act as mentors Tor thestudents on the job and also tutor them intheir school subjects. Best of all, for anystudent who succeeds in finishing schooland continues onto college, Wegman's paysthe full tuitiun. The result is that Wegman'shas single-handedly managed to create amultifaceted and caring support structure forthe students that hinges upon the students'continuing effort to learn.

108

Thew is no single recipe for successfulworker training. Some of the most exem-plary programs in the natkiii deer-greatly inapproach, administration and scope. Somesuccessful experiments are being initiated byunions in cooperation with employers andeducational institutions and by high schoolsand community colleges working together.

Industry Network TrainingMe Sheet Metal IndustryTraining The Skilled CraftsmenHigh geographic mobility characterizes thesheet metal industry. A worker in Jackson,Mississippi on Monday 'eoukl find hIMseltworking in San Francisco, California onFriday of the same week. He and his em-ployer would not expect the difference inlocale to have any bearing on his ability towork. Formerly, it did. Due to the widediversity in content and quality of trainingpractices around the country, there was noguarantee of consistency in work habits.

Recognizing this, the union and theemployers' association, through a nationwideCenective Bargaining Agreement, created aNational Training Trust Fund in 1971 to

109

research current training practices. TheFund looked to sheet metal workers andemployers throughout the country.for ideas.From their responses and suggestions, theFund devised a national apprentice trainingcurriculum and a loan/grant program forequipment and facility upgrade. (Theprogram made monies available in interest-free long-term loans and outright grants.)

The study also unveiled some seriousshortcomings in the existing system. For themost part, industry practice was to offer aone-time program for -apprentices only. Theneed,Eor crAntinuing ,education,and,skillsupgrading of journeymen went largelyignored. In 1973, the Training Fund, inconjunction with the National Center forResearch in Vocational Education at OhioState University, devised a `train-the-trainer'program to raise the teaching ability of localinstructors and to introduce them to theconcept of continuous training, for appren-tices through master craftsmen.

Since the start of ti.is program 16 yearsago, more than 3;000 instructors have beentrained, and many local sheet metal Joint

1 73Supporting Infiirnunion III

Apprenticeship and Training Committees;TATC's) now offer training beyond theapprenticeship level. Programs includewelding, computer-assisted design (CAD)and computer-assisted manufacturing (CAM),indoor air quality, architectural sheet metaland other advanced studies.

The Fund continues to closely monitoremployment requirements and 'Orecasts skillneeds for the industry's future. Growingconcerns about energy conservation haveprompted a training program for energymanagement technicians and auditors.Techricians are trained to examine theenergy efficiency of existing buildings.Following the:prograni, they 'hAve the skills'to retrofit structures toefficiency and indcor air quality.

National network training programsmmleled around-similar principles,now,existfor six other building trades.

Joint Apprenticeship/Degree ProgramsSkilled trades in other industries are takinganother approach to training. They arestructuring apprenticeship programs-to allowapprentices to apply coursework and experi-ence toward the attainment of an associate'sdegree.

The National Joint Apprenticeship andTraining Committee for Operating Engineers,the American Association of Community and

supporting Info, nialion1 74

Junior Colleges (AACJC) and the AtneticwCouncil on Education (ACE) are working-Ottthis dual enrollment model. The*** 'management and union committee hasreached agreement upon a generaland curriculum (including contentinstructional material) for theships, subject to some local variation.administrators are encouraged to concentrateon more macro issues rather than be delayedor limited by rigid specifications. The AACJCprovides technical support in course plan-ning and implementation.

Colleges have been granting appren-tices in tbese dual enrollment programsCredirs eciunraient't6 50 io 86 percent of the

- totaiscredits needed tizot,aP .as.F.:::' degree'

joint Union/Employer Training,Unifed,Asaqmohile Workers 4tod The ,Auto IndustrySince the early 1980s, the United Automo-pile Workers (UAW) has successfully negoti-gled dedicated training funds into its con-tracts with major auto companies.

Ford Motor Company. The NationalEducation, Development and Training Center(NEDTC), located on the campus of HenryFord Community College, to this point hasprovided training for about half of Ford'shourly workforce.

While much of the training in technicalliteracy, problem solving and teamwork forUAW-represented Ford employees takes

IN

place after working hours, a great deal of itis clearly linked to the training sponsored oncompany time. As the company has empha-sized statistical process control training for itsworkers, the NEDTC haF provided courses inremedial matit and computer_awarenessfor those who need to acquire basic skills.More than 30,000 workers have participatedin this companion training.

Since the UAW and Ford decided tomake training a strategic issue, thecompany's financial profile has moved fromlosses to profits. The 1988 annual reportnoted: "Ford learned a pivotal lesson duringthe bleak days of the'early 1980's == if thecompany was to be successful it kid to focusoil the basics of its business and engage thefull support of its employees." Ford recog-ni7es NEDTC as having played an integralrole in this turnaround.

General Motors. Every one of the 157General Motors facilities in the United Stateshas UAW training programs in place. ACRochester is among the most active.

AC Rochester has undergone tremen-dous change in a short period of time. In1985, AC Rochester produced carburetors.Since then, the plant has introduced a newproduction process and technology, andnow the primary product is fuel injectionsystems.

/ / /

Organizational changes have followedin the wake. The previous 112 productionclassifications have been collapsed intothree. Because of this dramatic restructuring,employees (25 percent o( whom. do notpossess a high-school education) have to beretrained, their skills upgraded and theirversatility increased. Job-specific training ismandatory and is offered to workers onseniority basis. If workers experiencdifficulty completing required job s,jdlltraining, alternative basic skills c rsework isprovided for them. Workers ar allowed torepeat a training course, if n ssary, untilneeded job Skill Coinkten es are obtained.

AC Rochester pays for this training .---'using both UAW-GM funds and publicresources. Approximately 20 percent of ACRochester's employees are enrolled in atleast one of the program's 75 job-specifictraining modules.

GED education programs (started in1986), Adult Basic Education and English asa Second Language programs supple.nentjob-sptcific training for approximately-680AC Rochester workers. New York State'sEmployer Specific Skills Training Grant andWorkplace Literacy funds provide trainingfor another 30 percent of the plant's workers.

Seven hundred and fifty workers are inthe plant's JOBS bank, a job security pro-gram created in the UAW-GM nationalagreement. All JOBS hank workers as well

1 75 Alipporting Information al

- -^,-

..;,-

=.t,..._

as all active workers in the plant, can takepart in a full-time college attendance pro-gram created by AC Rochestet's Joint trainingcenter staff. Upon completion of a GED/Workplace Literacy Program, an activeworker or a JOBS bank worker is eligible toentt- the full-time college program. Bothactive and JOBS bank workers receive fullpay and benefits, plus up to $2,250 annualtuition payments while enrolled in thecollege program. To remain eligible, work-ers must obtain a minimum of 15 credithours per semester and be matriculated intoan associate's, bachelor's or master's degreegranting program. Approximately 50 percentof the workers in training at AC Rochesterare enrolled in the full-time college an,dance program.

Chrysler. The UAW-Chrysler NationalTraining Center, headquartered near down-town Detroit, operates eight United Statesregional training centers near major Chryslerplant locations and directs 45 differenttraining and joint activity programs in 41locations in the United States.

More than 60 percent of UAW-repre-sented Chrysler workers 1.articipate in somekind of formal training or educational pro-gram, ranging from 'Tech Prep' basic skilldevelopment to new technology training.(More than 30,000 UAW-represented Chryslerworkers have participated in computer

Supporting Information III 1 7

training alone.) The National TrainingCenter has experimented with a number ofnew training and educational techniques andhas undertaken a number of special pilotprograms in 'Tech Prep' training.

Two-PlusTwo Programs InTechnical FieldsA growing number of communities arecreating better lir.'cages betweentigh__ 4

schools and community colleges. Experi-mental two-plus-two' programs can befound across the country, creating a bridgefor students who do not pursue four-yearcollege degrees.

A 'Tech Prep' program in NorthCarolina's Richmond County School Districtis an example of this link. Prior to theestablishment of the program, 25 percent ofthe districes high-school students wereenrolled in college preparatory courses, andthe remaining 75 percent in general aca-demic/vocational courses. For three quartersof the student body, courses were outdatedand did not reflect the needs of the commu-nity.

In 1986, the district decided that thevocational track needed attention. A 'TechPrep' program was created with upgradedand revised vocational courses. Thesecourses reflected the demands of Richmondemployers, and they required more rigorousacademic and vocational preparation thantraditional non-college programs of study.

112

The program has been most successful.Today, obout one third of Richmond.students are enrolled in college preparatoryprograms and another third can be found inthe Tech Prep' program. Enrollment forAlgebra I courses has increased by 42cent, and Algebra II course enrollment hasgone up by 57 percent in just three ears.Mathematics has not been th only areaafkcted by the system's reform. Morestudents are taking advanced English, socialstudies and science courses, and the averageSAT swres for the district have increased 46points. Additkmally, the annual dn)pout ratehas declined from 7.2 percent to 4.8 percent.'The number of graduates choosing ta attendcommunity college has dtmbled.

1 77I I,t Supporting Information III

SUPPORTINGINFORMATION IV:SKILLS INVESTMENT TAXES:FOREIGN EXAMPLES

All of the foreign competitors we studiedrequire firms to invest in developing andimproving the skills of their workers. Thesecontributions, organized as part of nationalstrategies for training and skills development,generally take two forms.

Companies often directly contribute topublic employment and training services, asin Germany, Japan and Denmark. Throughthis approach, the government may organize,oversee or directly provide the training tothose individuals needing basic or upgradedwork skills.

Firms are often required to contributethrough a periodically assessed tax or levy toa national training fund, as in Ireland,

,. Singapore 'and Sweden. ThiS fund mityoperate as a monitored 'training account.'from which companies can retrieve theirfunds to offer some form of approvedtraining

The funds for these initiatives arechanneled from various sources such aspayroll taxes, general government revenueand tax-deductible contributions, all ofwhich are expenditures above and beyond acompany's in-house training investment. Inevery case, the goal of the national system is

1 15

to encourage companies to train, to spreadcosts and ultimately to create a self-perpetu-ating program for continually upgrading theskills of the adult workforce.

GERMANYGerman corporations contribute a total ofnearly 3.5 percent of annual payroll to publictraining and employment schemes throughjoint employer-employee financed nationalunemployment insurance, the nationalsystem of apprenticeship and mandatorycontributions to local Chambers of Com-merce.

In this system, employers are assessed2.3 percent of annual payroll to the unem-ployment insurance fund, and eMplOyeesmatch their contributions. In 1988, 42percent of this fund was devoted to trainingand labor exchange programs, includingemployment counseling and placement,incentives for companies to employ andretrain hard-to-place workers and freetraining for workers who are unemployed orfacing unemployment fcr skills reasons,Although this fund is managed by the gov-ernment, the training is provided by the

I78 sr imx otng hybrmat um 11"

private sector and generally lasts trom fourmonths to two years. Individuals receive thenormal unemployment benefit to supportthemselves during training.

Beyond this expense, German compa-nies contribute DM 25 billion (U.S. $13.5billion), or another 2.5 percent of payroll, for1.7 million trainees in the apprenticeshipsystem. Through these apprenticeships,companies largely finance the last two tofour years of secondary education for themajority of German youth.

In addition to the contributions toapprenticeships and insurance fund pro-grams, German companies are required tocontribute to their local employers' organiza-tions (generally the Chambers of Industryand Commerce or the Crafts Chambers).Seventy percent of the .-hamber budgets aredevoted to training purposes, geared particu-larly to those small companies that lack theresources to train extensively in-house.

Many larger German corporations,along with funding public training, dedicatesignificant resources to their own traininginitiatives. For example, Seimens AG allo-cated DM 470 million, or 2.5 percent ofpayroll, to train and upgrade its workers in-house in 1967.

SWEDENSwedish firms contribute to training byfinancing the public employment and train-ing systems and by contributing to govern-

Supp lallng hyorma Mal /1

ment-established training funds. An em-ployer contribution of approximately 2.5percent of annual payroll fimaces theNational Labor Mai tset Roard (AMS), whichoperates Sweden's n..,ional employmentservice, manages labor exchange and pro-vides mining and subsidized employme.lt.This contribuuon is independent of theunemployment compensation system, towhich companies also contribute, and of theemployer's extensive social security obliga-tions. In 1987, Sweden spent $3.9 billion onlabor market measures kg a workforce of 4.4million.

The Swedish government also estab-lishes renewal funds, into which all compa-nies of a certain size are required to contrib-ute 10 percent of net profits. The tax-deductible contributions are placed into aninterest-free account and may be withdrawnlater to support company training that hasbeen approved by the government and thelocal unions. Volvo, for example, utilized itsrenewal fun& tc ovide up to two years ofinitial training for employees when it openedits team-style auto production plant inUdevalla.

DENMARKIn Denmark, training fw. unemployed indi-viduals and a substantial amount of trainingfor company employees is provided free of

/ /6

charge by the government through theNational Labor Market Board (AMU). Whilegeneral government revenues fund most ofthis effort, employers contribute up to 600Dkr (U.S. $82) per worker. This figurerepresents a total employer contribution of0.2 percent of annual payroll. Employeesalso match the contribution. In 1988, AMUprovided 1.1 billion Dkr (U.S. $137 million)to train 100,000 participants.

IRELANDIn Ireland, the larger companies are requiredto contribute one to 2.5 percent of payrollannually into the levy-grant scheme, creatinga fund similar to Sweden's renewal fund.Ninety percent of funds are then returned tothe company for use in training programsapproved by the national employmentauthority (FAS). The remaining 10 percent isused for administrative purposes. FAS.working through its industrial trainingcommittees, assists companies in devisingtheir training programs and administers thelabor exchange system.

SINGAPORESingapore has aggressively supported train-ing as part of its overall high prodlictivitydevelopment strategy. The ,kills Develop-ment Fund (SDF), to which employerscontribute one percent of payroll annually, isused by the government to partially reim-burse companies for approved forms of

117

training. This includes approved apprentice-ship and in-house training, external trainingin recognized courses offered by accreditedinstitutions and particularly training in hightechnology and 'economically critical' skills(for which companies receive twice thenormal reimbursement).

The Singapore government also fundsfrom general revenues a number of traininginstitutes, often in cooperation with multina-tional companies.

JAPANJapanese corporations have a strong philo-sophical commitment to training, and inmany cases build and run their own schoolsand training centers for the constant better-ment of their workforce.

Japanese corporations are required tocontribute an average of one percent ofpayroll into the National Employment Insur-ance Fund, which-pays for unemploymentcompensation and three employment andtraining programs. Of this one percent tax,about one third to one half is used to financethe three employment and training initia-tives.

In addition, employer tax funds arecombined with federal, prefectural (state)and, to a lesser degree, municipal generalrevenues to finance the Ministry of Labor'sHuman Resources Development Bureau,

16 USupporting Infonnation IV

which administers the Capability Develop-ment Program. This program supportsnearly 400 public or vocational trainingfacilities, provides direct assistance to firmsin creating their own in-house trainingcapability and helps develop and implementa set of industry based skill certifications and

examinations.Each of these countries requires compa-

nies to promote the skills development ofthe national workforce. In each case, themandatory corporate contributions are inaddition to the amounts that companiesspend to train their own employees.

Mpporttng InPrmation IV 118

SUPPORTINGINFORMATION VFINANCING OUR PROPOSALS

The, United States spends more than $300billion each year in Federal. state and localfunds on public and private education at alllevels. This Commission's recommendationsconstitute a system of quality controls toassure we are getting the most for thesedollars.

What The Current System CostsBefore estimating the costs of these recorn-mendations, the Commission estimated theamount of public funds currently being spenton the 16- to 19-year:old population. Thesemonies include the last two years of high

school, two years of college, government-sponsored training programs like the JobTraining Partnership Act and employmentassistance like the Targeted Jobs Tax Creditand Unemployment Insurance.

Using 1987-1988 data (the last schoolyear with the most comprehensive enroll-ment and revenue information available), weestimate that between $34.2 and $36.5 billionof public funds were spent on the operatingexpenses of education and training programsand for employment assistance for civiliansin this age group.

The Focus Population

Age Total Population Post-Secondary Enrollment Grades 11-12 Enrollment

16-19 14,548,500 2,903,737 5,795,822

1 82I I() ,SupportIng hyormanon 1

Public Expenditures:Education Operating Costs And Training-Related ProgramsFor The 16- To 19-Year-Old Population Public Expenditures

($ Billions)$23.1 - 24.7'

7.8 - 8.52

Secondary School:Grade 11 11.7 12.5

Grade 12 10.7 11.4

Unclassified 0.7 0.8

Higher Education:Public Institutions 7.4 7.9

Federal 0.3 0.4State 6.2 6.3Local 0.5 0.6Pell Grants 0.4 - 0.6

Private Institutions 0.4 0.6Federal 0.1 0.1

State 0.1 0.2Lo:al < 0.1Pell Grants 0.2 0.3

Employment and/or Training Assistance:3yrpA Programs(including Block Grants, Summer Youth Program,

2.2

Dislocated Workers, Job Corps, NativeAmericans and Migrant Worker programs, JTPA for Veterans)

Employment Service 0.2

Unemployment Insurance 0.3

Other Second Chance Programs(including Vocational Rehabilitation,

0.4

Food Stamp Employment & Training,WIN/JOBS, Refugee Assistance)

Targeted Jobs Tax Credit < 0.1

TOTAL $34.2 - 36.5

1 P 3Supporting Information V 120

In calculating these costs, the Commis-sion counted only those public funds associ-ated with current fund operating expensesfor 16- to 19-year-olds. Capital outlays,interest on debt, research money, and bothiestricted and unrestricted grants and con-tracts were excluded.'

As the above charts indicate, the bulkof public cost is attributable to state andlocal funds for junior and senio,' years ofpublic high school and to state expendituresfor the two years of public higher educationimmediately following high school.

Youth CentersBringing disenfranchised groups into aneducation system, any system be itpublic high school, Job Corps or new YouthCenters will require additional funds.

In calculating a cost, the Commissionmade several assumptions. First, the YouthCenter participants may have special needsthat result in higher than average per pupilexpenses. Thus, we increased by 20 percentthe 1988 per pupil average foi grades K-12to arrive at a Youth Center per pupil expen-diture of just under $5,100.

Second, because the majority of drop-outs leave school at age 16 or 17, we as-sumed that the average length of enrollmentin a Youth Center would be two years.Once a person has attained the Certificate ofInitial Mastery, the individual would pursue

121

the various options available through workor more advanced technical and professionaltraining.

1989Age Population5

DropoutRate

AnnualYouth Center

Costs°(in billions)

16 3,351,000 20% 3.4

3,534,000 20% 3.618 3,676,000 20% 3 719 3,662,000 20% 3.7

To date, attempts at solving our nation'sdropout problem have been expensive,frustrating and largely unsuccessful. Ourcontinued failure means greater costs forsociety:

Fifty-two percent of high-school dropoutsare unemployed or receiving welfareassistance. Fer this population of Ameri-cans, welfare benefits and lost tax rev-enues totaled $75 billion in 1987:

More than 80 percent of pregnant teenag-ers are high-school dropouts."

Sixty percent of prison inmates are high-school dropouts. The annual cost tohouse an individual in prison is more than$16,000.9

1 4Su/porting hilonnation I

The Commission believes that while thesums of money it proposes for Youth Cen-ters are not small, the costs are minimalcompared with the incalculable benefits tobe derived from a total population of 'work-ready' individuals. The proposed systemmakes it very difficult for individuals to slipthrough the cracks meaning that nearly100 percent of our young people shouldacquire the basic mastery skills necessary tolead productive work lives.

Funding Technical and ProfessionalCertificatesIf we had paid up to $5,000 for every 16-.17-. 18- and 19-year-old to pursue educationbeyond the Certificate of Initial Mastery in1987-1988, the cost would have amounted toS72.7 billion (versus roughly $36.5 billionspent under the current system).

The Commission has suggested that theNational Center on Education and theEconomy conduct a detailed analysis of thissubject and explore ways to ensure that allstudents have the financial means to pursuethis further education.

Given the anticipated economic benefitsto society. a strong argument can be madethat general revenues should be used tofinance this type of guarantee. The originalG.I. Bill is one example of how an initialgovernment investment can produce mev.sur-able benefits for many years. At a cost ofabout $14 billion, the G.I. Bill providedtraining and education for more than 7.8

Supporting Information l"

million World War II veterans. A recentcongressional study concluded that, of thosewho used the entitlement to attend college,the ratio of benefits to costs was a minimumof 5 to 1 and as high as 12.5 to 1. The studyalso found that the additional taxes paid bythe college educated veterans during theirworking lives more than paid for the pro-gram.'°

Another example of a high ratio ofbenefits to costs is found in quality pre-school programs, such as Head Start. Theseprograms demonstrate that for every federaldollar spent, $3 to $6 is saved in future socialservices, welfare, unemployment andremediation."

Other funding strategies could be usedto make the proposal 'revenue-neutral.'

Individual Training Account: Indi-vidual Training Accounts (ITAs) could beestablished that would combine a vouchersystem similar to the G.I. Bill with a savingsand equity based financing system analogousto Individual Retirement Accounts (IRAs). 12

Students would make tax-deductible contri-butions and withdrawals to purchase trainingand education. Most importantly, negativeaccount balances would be permitted whilean individual is enrolled in an education ortraining program; repayments to the accountwould begin once the individual beganworking and would be spread over time.

1 P 5 122

Training Surcharge on Personalincome: A plan similar to the IndividualTraining Account could permit an individualto repay a four-year government-backededucation and training voucher over thecourse of one's working life. Paymentswould take the form of a small surcharge(less than one percent of personal income)on one's annual tax return.

Both the Individual Training Accountand the Training Surcharge would allowyoung people to purchase education andtraining when they need it and repay thedebt later. Also, both plans could be usedthroughout orw's lifetime as an incentive forfurther training. Employers as well asemployees could make contributions to anIndividual Training Account.

Skills Development FundThe Skills Development Fund will be fi-nanced through the federal training trustfund. This trust will not require any GeneralFund expenditures situ:. it will be createdwith revenues collected irom the assessmenton every employer who chooses not toinvest in employee training One percent ofthe curient United States payroll v,ouldproduce between $28 and i0 billion annu-ally. Because a small percentage of compa-nies already spend ene percent or more ontraining and more can be expected to do thesame as a direct result of the assessment, thetrust fund will total less than this amount inthe first year.

I2

Other ProposalsWe recognize that our other recommenda-tions have fiscal implications, including thoserelated to Technical and Professional Certifi-cation, Employment and Training Boards andthe Certificate of Initial Mastery But, inrelation to the costs just described, theamounts are small and likely to be supportedby reallocating currently available resourcesand drawing on the resources of the privatesector.

An example of how the Technical andProfessional Certification system can operateis the Advisory Committee for Trade Negotia-tions and its nem (ilk of smaller industryspecific groups.

In the Trade Act of 197,4, Congressestablished a private sector advisory commit-tee system to ensure that trade policy re-flected United States commercial and eco-nomic interests. The system consists ofapproximately 40 committees with a totalmembership of approximately 1,000 advi-sors, who serve on policy, technical, sectoraland functional ach isory committees. Eachadvisor represents a different industry orcommodity group.

All advisors, who are nominated bytheir peers, serve a finite term withoutcompensation for their time or expenses.With the exception of the initial selectionprocess and the staff support of a few

1 R 6

Supporting Information

government employees, there is no otherfederal role and no budget outlay. Thecommittees meet regularly, are self-governedand are considered prestigious and effective.

NOTE&1. 1987-1988 public school enrollment for grade 11

was 2,935,615; 1987-1988 public school enrollmentfor grade 12 was 2,680,843. Using the official 1987and 1988 per pupil current expenditure averages forgrades K through 12 of $3,977 and $4,243 respec-tively (based upon average daily attendance) onecan calculate a range of $23.1-$24.7 billion of totalspending for grades 11 and 12. The Commissionnotes that per pupil expenses for secondary schoolare greater than those for the elementary grades(due to the costs of senior high school laboratories,vocational programs and smaller class sizes). Inaddition, some private secondary schools receiverevenues from Federal, state and local governmentsources; however these amounts are minimal anddata are not available. Because the published datado not satisfactonly measure the size or place ofenrollment. the Commission assumed that mostindividuals benefiting from public vocationalmonies would he countxl in high school or in two-year community college programs.

Sot ace National Centerfor Education Stanstks.'Digest of Education Statistics - 1989

2 The Commission counted all 18- and 19-year-oldsenrolled in all institutions of higher learning. In1987-1988 this number was 2.696.652 or 21.1percent of total post- secondary enrollment (Tho emdbiduals younger than age 18 who were enrolledin these institutions totaled 207.085 or about 1.6r rcent of all higher education students )

1 7S I ippo rt I Ijo 011a/ion

The Commission applied all federal, state and localappropriations, including Pell Grants, to theproportion of enrolled 18- and 19-year-olds (bypublic, private, four-year and two-year institutions)to produce a range of $7.848.5 billion.

Source: National Center for Educatum Stoutuicp"Digest o je Education Statistics - 1989."

3. The Commission used the United States Depart-ments of Labor, Agriculture, Treasury and Healthand Human Services estimates of the proportion of16- to 19-year-olds being served by governmentprngrams. These proportions were then applied tototal program budgets.

4. By counting only government appropriations forcurrent student expenditures, the Commissionrealized it was losing some federal, state ind localfunds that ultimately do contribute to studentinstruction, such as state incentive grants to students-and local scholarships. Due to the lack of detaileddata. the Commission chose to underestimate ratherthan overestimate the figures.

5. 1989 unpublished data from the current populationsurvey. the Bureau of Labor Statistics, United StatesDepartment of Labor.

6. The Commission used the United States averagedropout rate (as officially defined) of 20 percent tocalculate the anticipated costs of the Youth Centers.The high-school graduation rate is another measurethat can be used. In 1989. the nation's high schoolsgraduated ahout 71 percent of those students whoentered secondary school, according to the UnitedStates Department of Education. Based on this rate,the cost of educating 29 percent of today's 16-year-old population in Youth Centers (with an annualper pupil expenditure of $5.100) would be about$4.9 bilh.m per year or $9 8 billion for two years.

7 Data from research conducted by the MulticulturalPrevention Resources Center. San Francisco andpublished as an article -A Nation in 0:Ms: TheDropout Dilemma.- by Byron N. Kunisawa in NMToday. January 1988.

124

8 Ibid.

9. 1988 data from the National Institute of CorrectionsInformation Center, Boulder, Colorado.

10 "A Cost-Benefit Analysis of Government Investmentin Post Secondary Education under the World WarII G.I Bill," a staff analysis prepared for the use ofthe Subcommittee on Education and Health of theJoint Economic Committee December 14, 1988

11. "The Preschool Challenge" by Lawrence J.Schweinhart; High/Scope Educational ResearchFoundation. 1985

"Changed lives The etTects of the Perry Preschoolprogram on youths through age 19," Monographs ofthe High/Scope Educational Research Foundation,by John R Berrueta-Clement, Lawrence J.Schweinhart, W. Steven Bamett, Ann S Epstein &David P Weikart. 1984.

12 This concept is discussed in The High Flex Societyby Pat Choate and,' K Imger 1986

1 8/2 Slipp011111,k

Acknowkdgements'

! ,

ACKNOWLEDGEMENTS

We thank Marc Tucker for the vision hedisplayed in defining the agenda on whichthis Commission has worked and the Boardof Trustees of the National Center on Educa-tion and the Economy for providing us theopportunity to address that agenda.

We acknowledge with gratitude thefinancial support extended to the prcject bythe Carnegie Corporation of New York. theState of New York. Towers Perrin. Cresap/Telesis. SJS, Inc. and The German MarshallFund of the United States which made theentire effort possible. None of these organi-zations is responsible for the statements or%iews expressecl in this report.

We thank ,loan Wills, the Project Man-ager, v, ho shepherded the meetings of theCormmssion and staff and drew together thestrings of hat became an unusually wideranging enterplie ith admirable skil: andtenacit.

Thanks are due, too, to the marorganizations that contributed their execu-ti% es to the Case Team research effort duringan eight-month penod and supported theirexpenses w hen in the field. Without theiraid. it w oukl hae been impossible to mountthe research program. hich in many wayshas giN en this Commission its distinctivecharacter.

And, we owe our thanks, of course, tothe case study_research team membersthemselves, whose prodigious effort on threecontinents provided a unique perspective.Though technically on leave from theirsponsoring institutions for part of this period,virtually all found that they simply had toadd these time-consuming tasks to a full-tin-ejob, which they did without complaint andwith great dedication.

The staffs of the National Center,Cresap/Telesis and SJS, Inc. provided sup-port beyond the usual call of duty withoutcomplaint and with a high degree of profes-sional skill, for which we are extremelygrateful.

We would also like to express OWappreciation to the thousands of people inthe United States and abroad who allowedus to come and talk with them in the courseof our research. Their hospitality and open-ness made it possible to form a picture of aery complex reality that could have beendeveloped in no other way.

190

Commission on tbeSkills of tbe AmericanWorkforce

At knouledgemerit%

04+0

Ap endkves

NATIONAL CENTER ONEDUCATION AND THEECONOMYBOARD OF TRUSTEES

Mario M. Cuomo, Honorary Chairmanernor

State ot New York

John Sculley, Oa mut nChairnun. President and Chief Executive OffkerApple Computer. Ink

James B. Hunt, Jr.. ChairmanPartnerPov ner

R. Carlos Carballada, TimsurerVice-ChancellorNO% York State 13(tard of RegentsPresident and Chief Ewcutne OfficerCentral Trust Company

Marc S. Tucker, PresidentNational Center on Education and the Econoim

Anthony P. CarnevaleVice President of Nati(inal Awn-,

and Chief Ec( in( nmstAmerican Sok ietv t( it Training and 1)ev el(tpment

Sarah H. ClevelandLaw StudentYale Law School

Hillary Rodham ClintonPartnerRose Law Firm

133

Thomas W. Cole, Jr.PresidentClark Atlanta University

VanBuren N. Hansford, Jr.PresidentHanshird Manufacturing Corporation

Louis HarrisChief Executive OfficerLouis Harris and Associates

Barbara R. HattonDeputy DirectorEducation and Culture ProgramThe Ford Foundation

Gullbert C. HentschkeDeanScluxil of Educati( in

University of S(mthern Calihirnia

Vera KatzSpeaker of the HouseOregon House of Representatives

Thomas H. KeanPresidentDrew university

Arturo MadridPresidentThe Tomas Rivera Center

1 92 Board of Trustees

Ira C. MagazinerPresidentSJS, Inc.

Shirley M. MalcomHeadDirectorate of Education and Human ResourcesAmerican Association for dle Advancement

of Science

Ray MarshallChair in Economics and Public AffairsL.B.J School of Public AffairsUniversity of Texas at Austin

Peter McWakersSuperintendentRochester City School District

Richard P. MillsCommissioner of EducationState of Vermont

Philip H. PowerChairmanSuburban Conimunications Ca mporation

Lauren B. ResnickDirectorlearning Research and Do ek Tment CenterI 'nit ersit, of Pittsburgh

David Rockefeller, Jr.Vice ChairmanRockefeller Family & Assouates

' 1.-', )

.i. 0

ih,tild f.)/ Il 11,slees

Adam UrbanskiPresidentRochester Teachers' Association

Robert F. Wagner, Jr.PresidentNew York City Board of Education

Kay R. WhitmoreChairman, President, and Chief Executive OfficerEastman Kodak Company

13,4

COMMISSION ON THESKILLS OF THE AMERICANWORKFORCEBIOGRAPHICAL SKETCHES

Ira C. Magaziner, Chairha C. Magaziner is currently President ot S1S.Inc.. a consulting firm providing assistance togroups addressing economic and sotial issuesfacing America m the 1990 s. Preciously. he wasFounder and President of Telesis, an knternationalconsulting firm specializing m corporate strateg)and economic de% elopment policy. MrMagaziner continues to be a consulting associate

ith Telesis Prior to founding Telesis in 1979.Mr Magaziner worked tor the Boston ConsultingGroup During his career, he has led hundredsot comprehensne strateg studies for companiesbased m ten countries He has also led ..tudiestor gm ernments in S eden. Ireland, Canada,Great Britain and Israel. Mr Magazmer gradu-ated from Brown Unnersity and attended BaCollege th ford as a Rhodes Scholar Author ofnumeious books, Mr Magazmers latest book isMe Went U ar Itmule the Global Business Battles.sbaping America's Funin, He is a member otthe Board of Trustees of the National Center onEducation and the Ecorvimy

William E. Brock, Co-ChairE Brock is Senior Partner ot The Brock

Gmun, a Washington, D C. consulting firmspecializing in international trade, human re-sources and ince,ment strategies Senator Brockwas a member ot President Reagan's Cabinetsen ing from 1981 to 1985 as United States TradeRepresentati, e. the President's chief trade policyack iser and ihtemational trade negotiator. andserved from 1985 to.198' as Secretary of LaborAs Secretar. he initiated the landmark study of

orkforce and workplace demographic trends

;-3

entitled Workforce 2000 Win* and WorkersPrthe 21st Century, achieved major pension reformlegislation and reinvigorated efforts at labor-management cooperation. Senator Brock soledfour terms in the House of Representatives untilhe was elected Senator from Tennessee in 1970In 1977, Senator Brock served as Chairman of theRepublican National Committee. Senator Brockcurrently serves on President Bush's EducationPolicy Advisory Committee, is Chairman of IT. SLabor Secretary Dole's Commission on AchievingNecessary Skills (SCANS) and is Chairman of theNational Endowment for Democracy. He is alsoa Serior Counselor at the Center for Strategic andInternational Studies in Washington D.0 , Chair-man of the International Advisory Committee otthe Unit ersity of South Carolina and President ofthe National Academy Foundation

Ray Co-ChairRay Marshall holds the Make and BernardRapoport Centennial Chair in Economics andPublic Affairs at the L. B.1, School of PublicAffairs at the University of Texas at Austin andserced as President Carter's Secretary of LaborAs President Carter's chief advisor on labormatters, Mr Marshall administered laws andprograms in employment and training, laborstatistics, labtir-management relations and othermatters affecting the nation's workforce Mr.Marshall serves as a member of the Advisory

ommittee to the National Science Foundation'sDirectorate for Science. and Engineering Educa-

1 94Bio,Lvapbr( (r/ sket,

non and is a member of the Boards of theAnwncan Academy of Work and Learning, theQuality Education for Minorities Network and theInteractive Training Institute. He is a Trustee ofCarnegie Corporation of New York and served asa Carnegie Forum Advisory Council member.Among his recent publications IN Unheard l'oices1.cthor and Economic Policy in a CompetitiveWorld (1987) Mr MaNhall is a mernber of tlwNational Center's Board of Trustees

Robert M. Atkinson, HDirector of Academk Pnigrams tor the School ofBusiness and Indnstry at Florida A Ni Universityin Tallahassee, Fk Robert NI. AtI:m.on is amember of the liciard of Directors for the Strate-gic Business Imestois Devdopment Corporationw here he served as Chairman of the Board from1985 to 198' Pri or to obtaining his currentpc)siticin in August 1989, lw was Director of tlwDicision of Management Sciences at the Schocil ofBusiness and Industry from 1986 to 1989 From1982 to 1986. lw was an Associate Professor inthe Division of Managernent Sciences, From 1974to 1982, Mr Atkinson was an Assistant Professorof Iliismess Administration at the College ofCAmmwrce and licismess Administration at theUnicersity of Illinois Mr Atkinscin was a FirstLieutenant in the Signal Corps. United StatesArmy

Owen BieberOwen Bieber is President of tlw t ntcd Automo-bile Workers In 1980, he was elected Intermi-tic nu! Vice P-esident. lie was elected Presidentof the International limon first in 1983 and againin )986. AN President, Mr. Bieber has promotedgle..tel job security tor industrial workers byhelping to pioneer contractual app( )aches, suchas the creation of job banks, and has impk-mented number of innmative educationpn)grams Mr. Bieber began his career with the

Brographu al Meek ho

UAW in 1949. He is a Vice President and anExecutive Council member of the AFL-CIO andserves on the Boards of the National Associationfor the Advancement of Colored People, theUnited Way of America and New Detroit. He is amember of the Michigan Governor's Commissionon Jobs and Economic Development, the Eco-nomic Alliatwe of Michigan and the President'sAdvisory' Committee for Trade Negotiations.

Edward J. CarloughEdward J Carlough is General President of theSheet Metal Workers' International Association,AFL-CIO He was elected President of the unionin 1970 and has been reelected without opposi-tion at each successive convention. He hashelped create the National Training Fund forapprentices and journeymen, a StabilizationAgreement to hdp unemployed workers and theNatiomil Energy Management Institute. Prior tobeconung President, he served 13 years as theSheet Metal Union Research Director and Organ-ming Director Mr. C.arlough became a SheetMetal Workers' apprentice in New York City in1949. Currently, he serves as Vice President ofthe AFL-CIO Building and Constniction TradesDepartment and a member of the General Boardof the AFL-C10

Anthony P. CarnevaleAnthony P. Carnevale is tlw Vice President ofNational Affairs and Chief Emnornist for theAmerican Society for Training and Devdopment(ASTI)) in Alexandria, Virginia. From 198,througi- 1988, Mr. Carnevale was Chairman of theFiscal Policy Task Force fi)r the Council onCompefis veness From 1981 to 1982, he was co-m(iderator for the White HoUNC Conference onProductivity In 1978, Mr Carnevale served asthe Government Affairs Director tor the American

195 136

Federation of State, County and MunicipalEmployees (AFSCME). Prior to his work withAFSCME, Mr. Carnevale served in the Congress asa staff member in the U.S. House of Representa-tives and the Senate Mr. Carnevale's governmentservice also includes work in the U.S. Depart-ment of Health, Education and Welfare. MrCarnevale was a co-author of the principalaffidavit in Rodnguez v. San Antonio, a landmarkSupreme Court case arguing for equal educa-tional opportunity. Mr Carnevale has authoredseveral books and monographs on training in theworkplace Mr Carnevale holds a Ph D. from theMaxwell School of Public Affairs of Syracuselniversity He is a member of the Niard ofTrustees of the National Center

Paul J. C muette, Jr.Paul j Choquette. Jr is President of GilbaneBuilding Company in Providence, Rhode IslandAppointed President in 1981, he is the sixthconsecutiv e family member to sene as Presidentsince the wmpany's founding in 18'3 Befiireassuming his present role, Mr Choquette servedas General Counsel, Vice President and ExecutiveVice President at Gilbane Currently. he alsosen es as Chairman of the Board of GilbaneProperties. Inc , a real estate developmentsubsidiary of Gilbane Building Company MrChoquette serves as a Trustee Emeritus of Brow n

ersity and Vice Chairman and member of theBoard of Direcuirs of the Rhcide Island PortAuthcirity and E«inomic Devekipment Corpira-non He is also a past Chairman of the NewEngland Council Prior to jciining Gilbane, MrCluxjuette served as legal munsel to then RhodeIsland Governor John 11 Chafee kir two years

Richard CohonRichard Cohon is President of C N BurmanCompany in Paterson, New Jersey Mr Cohonalso is an ahisor to the President's Commissuinon Vocational Edue anon Ile serves as a member

t

of the Board of Directors of the National StrategyInformation Center and the United Skills Invest-ment Corporation and is a national advisor of theCenter for New Leadership. Mr. Cohon is amember of the Association for ManufacturingExcellence and the Young President3' Organiza-tion. He is Chairman and Founder of YPO'sManufacturing Project and Chairman of theNational Center for Manufacturing Sciences'Education and Training Committee.

Badi G. FosterBadi G. Fa:!er is President of the AEtna Institutefor Corporate Education, a position he has heldsince' its inception in 1981. He is responsible forcomorate education programs in human re-sources development, management, education,bumness strategy and organization effectiveness.Mr Foster also oversees the Institute's manage-ment and consulting activities, educationaltechnology and research and AEtna's educationalinvolvement with outside organizations Prior topining AEtna, Mr Foster held several positions atHarvard University including: Director of FieldExperience Program, Graduate School of Educa-tion, Chairman, Hispanic Study Group; AssistantDirector, J F. Kennedy Institute of Politics; andVisiting Professor in Afro-American Studies Hehas published a number of articles on business,education and community development andserved in several public service capacities at theFederal. state and local government level.

Thomas GonzalesThomas Gonzales s Chancellor of the SeattleCommunity College District VI, the Iargest of 23community colkge districts in the State ofWashington. As Chancaor, he also serves asChiet Executive Officer. From 1981 to 1989. DrGonzales served as President of Linn-BentonCommunity College in Albany. Oregon, and from

q 6111().e:Mphic skett hes

1981 to 1989 was Adjunct Professor at OregonState University, School of Education. He wasappointed by Oregon's Governor to serve on theBoard of the State Apprenticeship and TrainingCouncil from 1985 to 1986. Prior to theseexperiences, Dr. Gonzales was Campus VicePresident of the Community College of Denver,Auraria Campus, Dean of Instruction at San JoseCity College and a consultant to the WyomingHigher Education Council. Dr. Gonzales is amember of the American Association of Commu-nity and Junior Colleges (AACJO and is ViceChair of the AACJC Commission on ImprovingMinority Education. He was a former member ofthe AACJC Board of Directors and Chair of itsmembership committee. While in Oregon, Dr.Gonzales served on the Private Industry Council(PIC), and now serves on the PIC Board inSeattle, Washington.

Rear Admiral W. J. Holland, Jr., USN(Retired).Ierry Holland is President of the Armed ForcesCommunications and Education AssociationEducational Foundation, which sponsors scholar-ships and provides professional training in thedisciplines related to defense command, commu-nications. Intelligence, computers and informa-tion management systems. Rear Admiral HoLandserved on active duty for 32 years, primarily innuclear submarines. He was a teacher andsupervisor of training at every grade includingcommand of the Navy's largest technical trainingfacility, the Submarine School. He was theUnited States Naval Academy's first Director ofProfessional Development, a department hefounded. Rear Admiral Holland has written onsubmarine warfare. national strategic policy,technical training and maritime affairs.

Blograpbu. al Sleek lw,.197

James R. HoughtonJames R. Houghton is Chairman of the Board andChief Executive Officer of Corning Incorporated.Since joining Corning in 1962, Mr. Houghton hasserved as European Manager, Vice President,General Manager, Director and Vice Chairmanand was elected Chairman in 1983. Houghton ispast Chairman of the Business Council of NewYork State and a member of The BusinessRoundtable, Council on Foreign Relaiions and theBusiness Committee for the Arts. He is also aDirector of Dow Corning Corporation, Metropoli-tan Life Insurance Company, CBS, Inc., J.P.Morgan Company and Owens-Corning FiberglassCorperation. He serves as a Trustee of theCorning Museum of Glass, the Corning GlassWorks Foundation and the Metropolitan Museumof Art in New York City.

James B. Hunt, Jr.James B. Hunt, Jr. served Ps North Carolina's firsttwo-term Governor, holding office from 1977 to1985. Under his leadership, the North CarolinaSchool of Science and Mathematics, the Micro-electronics Center of North Carolina and theNorth Carolina Business Committee for Educat, inwere all established. Governor Hunt chaired theNational Governors' Association Task Force onTechnological Innovation, the Education Com-mission of the States and its Task Force onEducation for Economic Growth that producedAction for Excellence, one of the major educationreform reports of 1983. Now an attorney inprivate practice with the firm of Poyner andSpruill, he was a member of the CarnegieForum's Task Force on Teaching as a Profession,chaired the Planning Group that chartered theNational Board for Professional Teaching Stan-dards and is currently Chair of the NationalBoard. He is also a member of the NationalCenter's Board of Trustees.

138

John R. HurleyJohn R. Hurley is Vice President and Director ofCorporate Training and Educational Resources forThe Chase Manhattan Bank, Previously, he wasDirector of Training at the Insurance Company ofNorth America and has held senior level humanresource and marketing positions at the XeroxCorporation. Early in his career, he was a publicschool teacher and school administrator. Cur-rently, he is active on the Council for ContinuingEducation and is the President of the AmericanSociety for Training and Development

John E. JacobJohn E Jacob is President and Chief ExecuticeOfficer of the National Urban League. Inc., aposition he has held since 1982. Author of aweekly newspaper column. "To Be Equal." whichappears in more than OM newspapers. Mr. Jacobhas served as Executit e Vice President of theNational Urban League. Inc from 1979 to 1981and President of the Washington, D C UrbanLeague from 19"5 to 1979 He also acted asExec utive Director of the San Diego I 'rbanLeague wnn 1970 to 1975 Mr Jacoi, !legan hisUrban Leapue career in 1965 as Director ofEducation .ind Youth Incentn es at NI 71. inWashington, DC During his tenure, the UrbanLeague :las offered yotmg people variousworkforce training, skills deN elopment andemployability programs and has worked directly

ith school systems to improt e the school-to-w ork transition Mr. Jacob currently sen es asChairman of Howard Unn ersity 's Board ofTrustees and on the Boards of Local InitiativesSupport Corporation (USC), New York Tele-phone, Continental Corporation and Coca-ColaEnterprises

Thomas H. KeanThomas H. Kean is President of Drew Universityin Madison, New Jersey. Prior to assuming thepresidency, he was Governor of New Jersey from1981 to 1989. In 1987, Governor Kean chairedthe Republican Governors' Associatior He was amember of the Executive Committee of theNational Governors' Association, Chairman ofNGA's Task Force on International Education andis a member of the National Board for Profes-sional Teaching Standards, He has also served asChairman of the Education Commission of theStates and was a member of the CarnegieForum's Task Force on Teaching as a ProfessionBefore being elected Governor, Governor Keanserved ten years in the New Jersey State Assem-bly holding positions of Minority Leader. MajorityLeader and Speaker. In 1984, Governor Keanwas named Man of the Year by the New JerseyNAACP. Before bucoming involved in politics,he was an American history high school teacher.He is a member of the National Center's Board ofTrustees.

William H. KolbergWilliam H Kolberg is Piesident of the NationalAlliance of Business, a position he has held since1980 Prior to joining the National Alliance ofBusiness, he was Vice President for Public Affairsot the Union Camp Corporation, President ofKolberg 8t Associates and consultant to TheBusiness Roundtable Before entering privateindustry, he served as Assistant Secretary of Laborand Administrator of the Employment andTraining Administration from 1973 to 1977 Hewas the Assistant Director of the Office ofManagement and Budget in the Executive Officeof the President from 1971 to 1973. Mr Kolberg'srange of experience includes policy planning andadministration, national leadership roles inemployment and training, education and welfarereform and authorship of national workforce

198By,graph ;cal sleek lieN

quality initiatives. In 1970, he was the recipientof the Distinguished Achievement Award of theU.S. Department of Labor. He is the author ofPreparing Manpower Legislation and the editor ofThe Dislocated Worker.

William LucyWilliam Iiicy was elected International Secretary/Treasurer, the second highest national office, ofthe more than one-milhon member AmericanFederation of State, County and MunicipalEmployees (AFSCME), AFL-CIO, in 1972. A civilengineer by trade, Mr Lucy is Vice President ofthe AFL-CIO Industrial Union Department, theMaritime Trades Department and the Departmentfor Professional Employees. He serves on theBoards of the African-American Institute, Ameri-cans for Democratic Action and Commission onWorking Women. He is a member of the Na-tional Leadership Conference on Civil Rights andthe National Labor Advisory Council of the Marchof Dimes Foundation He is President and aFountkr of the Coalition of Black Trade Unionists(CIITU), an organization of union leaders andrank-and-tile members dedicated to focusing onthe needs of Black and minorit group wo-kers

Margaret LA. ..lacVicar1arg.1 rei MacVicar holds the Cecil and Ida Green

Chair in Education at the Massachusetts Instituteot Technoh)gy, w here she is Dean for Under-graduate Education and Professor of PhysicalScience From 1983 to 198'. she vas VicePresident ot the Carnegie Institution of Washing-ton In 19-9 she was Chancellm's DistinguishedProtessm at the Uniersity of California atBerkelt.1 Dean MacVicar is Chair of the Nationalsciene hmnalti( n s Advisory C()Illinittee onEducation and Human Resources and Co-Chair otthe National Council on Science and

Thographic al Sketches

Technology's Project 2061 of the AmericanAssociation for the Advancement of Science.Professor MacVicar was a Trustee of the CarnegieFoundation for the Advancement of Teaching anda member of the Carnegie Council on PolicyStudies in Higher Education. She is a member ofthe Corporations of Charles S. Draper Laboratoryand Woods Hole Oceanographic Institution, aTrustee of Radcliffe College and the BostonMuseum of Science, and a Director of ExxonCorporation and W.H. Brady Co. Dean MacVicaris a Fellow of the American Physical Society andholds patents and is published in the field ofelectronic materials

Eleanor Holmes NortonEleanor Holmes Norton, Professor of Law at theGeorgetown University Law Center, was ap-pointed by President Carter as the first wonun tochair the Equal Employment Opportunity Com-mission As EEOC Chair, Professor Nortonadministered Title VII of the 1964 Civil Rights Act,the Equal Pay Act, the Age Discrimination inEmployment Act and Section 501 of the Rehabili-tation Act and is highly regarded for her work indeveh)ping equal emphyment law and policy.Professor Norton is an authority on labor forceand employment matters. anti-discnminationpolicy, family, education and poverty concerns.She has co-authored a book entitled-Sax-Dis-crimination and the Late. Causes and Remedies.She has been named one 01 the One HundredMost Important Women in America. has received53 honorary degrees and serves on the Boards ofthe Rockefeller Foundation, the Martin LutherKing, Jr. Center for Social Change, MetropolitanLife Insurance Company, Pitney Bowes Corpora-tion and the Stanley Works Company.

140

Karen NussbaumFaren Nussbaum is the Executhe Director of9to5. National Association of Working Women.thi leading membership organization lot thenation.... 20 million office workers. 9to5 combinesactivism, research and public education to winrights and respect for women who work inoffices A former secretary herself. Ms.Nussbaum has been organizing office workerssince the early 1970's ancl helped found one oft!te first 9toi chapters in Boston in 1973. Today9to5 has cner 14.000 members with 26 chaptersnationwide. She also sen es as President ofDistrict 925. a national union for office workersunder the Sen ice Employees International Union.AFL-C10 Ms Nussbaum has co-authoredSolutions jiff the Neu. Work Rove jOr aAeu. Socail Contract and 91o5. The WOrking

innan s Guide to Office Surma!

Peter J. PestilloPeter( Pestillo is Vice President of CorporateRelations and Dnersitied Businesses for the FordMotor Company He has responsibility for theCompany's Employee Relations. Public Affairsand Grwernmental Affairs Staffs. and for FordAerospace Corporation and Ford New Holland,Inc. Mr Pestillo is a member of the 13(iard OfDirecuirs of Rouge 'steel Company and Par.kRidge Ccirpcirati(in, parent firm cif Hertz Cairpora-non He rece.ied his law degree fromGeorgetmn Unnersity and is a graduate of theAchanced Management Program at Han ard'nn ersity

Philip H. PowerPhilip II Po- r is Founder. Owner and Chair-man of the Board (if Suburban CommunicationsOn-poi-anon. a group ot c(inimunity newspapersthniughout Michigan and around Cincinnati,Ohio Mr Power serves on the board of Direc-tors ot the Mkhigan Grow th Capital Foundation,

the Power Foundation. the World Press Frc niiCommittee and is a Trustee of the NationalCenter on Education and the Econonly V.- is amember of the University of Michic4an's Boa,1 ofRegents, chairs the Michigan Job Trai'ting 0 ordi-nating Council and is a member of GoverncrBlanchard's Cabinet.Council on Human I -.vest-ment and Commission on Jobs and EconomicDevelopment. Mr. Power is widely recognizedfor his highly regarded reorganization ofMichigan's lob training programs, as well as forhis development of an integrated labor marketpolicy for the state.

Lauren B. ResnickLauren B. Resnick is Director of the Lc mingResearch and Development Center and Professorof Psychology and Education at the University ofPittsburgh. In 1986, Professor Resnick wasPresident of the American Educational ResearchAssociation and from 1979 to 1980 was Presidentof the American Psychological Association'sDivision of Educatiimal Psychology. She hasbeen a member of the National ResearchCouncil's Commission on Bektvioral and SocialSciences and Education, the Board of Trustees ofthe Cirnegie Foundation for the Advaocement ofTeaching and the Educational Testing Service.Ms. Resnick currently serves on the MathematicalSciences Education Board and on U. S. LaborSecretary Dole's Commission on AchievingNecessary Skills (SCANS). Professor Resnick isthe founder and editor of Cognition and Instruc-tion. She is a member of the Board of Trusteesof the National Center.

2 oii

Biographical Sketches

Kjell-Jon RyeKie II-Jon Rye is a teacher at Bellevue High Schoolin Bellevue, Washington. A teacher in this schoolsince 1984, Mr. Rye established the TechnologyEdo:anon Program, which includes instruction inthe following areas: robotics, lasers, computers,aerospace and biomedical technology, construc-tion, manufacturing, communications and trans-portation technology and mechanical, electronic,architectural and civil engineering. He is anadvisor to the Congressional Office of Technol-ogy Assessment on issues relating to technologyInd education of youth. Mr. Rye was a memberof the Washington State Advanced TechnologyAdvisory Board, which ad..ised the Governor onpolicies relating to the impacts of advancedtechnology on education. He is currently amember of the Technology Education AdvisoryCouncil of the International Technology Educa-

tion Association and sits on the Editorial Board ofEducational Digest. He is currently on leave atthe Center for Educational Renewal at theUnii ersny of .Washington orking ith Dr. JohnI Good lad.

Howard D. SamuelHoward D Samuel is currently President of theIndustrial Union Department, a semi-autonomousmganiiation a:;sociated with the AFL-CIO. Hehas had a forty-year career in the labor move-ment. Prior to his role at IUD, Mr. Samuel wasDeputy Undek Secretary of Labor for InternationalAffairs. In that position, he directed the LaborDepartment's Bureau of International LaborAffairs and w as responsible for internationalatm files. Mr Samuel has seri ed on variouscommissions including: the National ManpowerAthisory Council, me Coinnission on PopulationGrmth and the American Future and thePresident's Commission on Compentheness. He

2t I/ hcs

series as Trustee of the Brookings Institution,Martin Luther King Center, Work in AmericaInstitute and the Council on Competitiveness andis a member of the Defense Science Board.

*John SculleyJohn Sculley joined Apple Computer, Inc. asPresident and Chief Executive Officer in 1983 and

was elected Chairman of the Board in 1986. Mr.Sculley has led Apple to a top position in thepersonal computer industry, focusing on technol-

ogy for business and education. Prior to joiningApple, Mr. Sculley was President and ChiefExecutive Officer of Pepsi-Cola Company. He is

the recipient of numerous awards, includingAdvertising Man of the Year, the Joseph E.Wharton Business-Statesman Leadership Awardand UCLA's Anderson Graduate School ofManagement Exemplary Leadership in Manage-ment Award. Most recently, he was chosen CEOof the Decade for Marketing by the FinancialNews Network Mr. Sculley serves an the Boardof the international Foundation for the Survivaland Development of Humanity, an East-West`codper5tile efforfon "hutiian"rigfits, ectuC-aticin,

arms reduction, energy and the environment. Healso serves on the SEI Board at the Center forAdvanced Studies and Management and on the

Board of Overseers, both at the Wharton School,

on the Board ot Advisors at the Graduate Schoolof Business at Stanford University and on theBoard of Trustees at Brown University. Mr.Sculley is the author of the best selling autobiog-raphy, Odyssey, Pepsi to Apple. Mr. Sculleyseries as the Chairman of the National CenterBoard of Trustees,

1)2

William J. SpringSince 1984. William J. Spring has been the VicePresident ot District Community Affairs at theFederal Rest_ e Bank of Boston. Prior to hiscurrent role. Mr spring .isa consultant to theFederal Reserve Bank of Boston and President ofthe Boston Prn ate Industry Council from 1983 to1985 w here he w:is extensively imohed insetting up the Boston Compact. From 19--through 1981, Mr Spring w as the AssociateDirector ftir Emphiment Policy with the tIomes-tic Polic; Staff at the White House. He is theauthor and co-author of numerous articles onmph); ment policy as seen in 71w Aim,' 104Times Magavne. Me Aim,. Republic, 71w Wash-ington Post and The Baylor, Globe Mr Springauthored a working paper for the National Centerentitled, -From Solution' to Catalyst. A New Rolefor Federal Edutation and Training D'illars."

Anthony.). TrujilloAnthon J Trujillo is superintendent of theSweetwater [Akin" Nith Schoiil District in Chula\ ma, Californ.a Nun to be«nning a Superinten-dent. Mr Trujillo was a teacher, print pal andadministrator and has taught at the unnecsity.1e% el. Mr Trujillo sened as Chairman of theEducational Management and Evaluation Com-mission tor the California State Board of Edut a-non from PI'S to 1980 and Chairman of tlw StateCtimmission on Sclusil GMernance and Manage-ment from I 984 to 1985 Currenth, he is .1member 01 the San Diego United Wa; Board ofDuet. tors

Marc S. Tucker\tart S Tut ker is President of the National Centeron Edmation and the Ett non 1k. as printi-pal author of the Center's report, 7b Seettre OurFunny The &demi Role hi Ilducation. Prior tothe establishment of the National Center inJarman 1988. w as Executne Director of theCarnegie Fiirum on Edthation and the Et onomy

Mr. Tucker sened as Staff Director and principalauthor for the Forum's report, A Nation Prepared.'leachers for the 21st Century. Mr. Tucker servesas a member of the Board of visitors of theCollege and Graduate School of Arts and Sci-ences at Wake Forest University. the Board ofVisitors of the University of Pittsburgh's School ofEducation and the Board of Directors of theNational Alliance of Business Center for Excel-lence in Education. Mr. Tucker is also a Profes-sor of Education at the University of Rochester.

Laura D'Andrea TysonLiura D'Andrea Tyson is Director of Research atthe Berkeley Roundtable on the InternationalEconomy (BRIE) and Professor of Economics atthe Unix ersity of California at Berkeley She wasa visiting professor at Harvard Business Schoolduring the 1989 to 1990 academic year. Prior tojoining the faculty at the University of California.she was an Assistant Professor of Economics at.Pnuceton University. She f a Trwifiber of theCuomo Commission on Trade and Competitive-ness. the Leadership Council of Rebuild Americaand the Council on Foreign Relations. She hasserved as a consultant to the President's Commis-sion on Industrial Competitiveness. Council onCompetitneness, Western Governors' Association,World Bank. the Office of Technology Assess-ment and RAND Corporation Ms. Tyson haswritten numerons books on the economics ofcompetitiveness including: .4inerican Industry inInternational Competition (1983), Me Dynamics(?f7rade and Employment (1988) and Politics andPmductwity 71w Real Story qf Houjapan ItOrks(1989). She is currently working on a book ontrade policy for the InAtute of InternationalEconomics in Washington, D.0

2 P 2niugltip/M. il/ Sktic bes

Kay R. WhitmoreKay R. Whitmore is Chairman, President, andChief Executive Officer of Eastman KodakCompany in Rochester, New York. He began hiscareer at Kodak as an engineer in film manufac-turing in 1957. Mr. Whitmore serves as a mem-ber of the Board of Dflectors of The ChaseManhattan Corporation, The BusinessRoundtable, the Business Council of the State ofNew York, the University of Rochester and theInternational Museum of Photography at theGeorge Eastman House. He is Chairman of theIndustrial Management Council of Rochester. He

is also a member of the National Center's Board

of Trustees.

Alan L WurtzelAlan I.. Wurtzel is Chairman of the Board andformer Chief Executive Officer ot Circuit City

,Stores., 1ndet his.leadership: Circuit City hasbecome the lacgest and most profilahre SpeCialty

retailer of bran&pame consumer electronics andappliances in the United States with sales inexcess of $2 billion. Prior to joining Circuit OtyStores, Mr. Wurtzel was a Washington, D.C.

attorney From 1986 to 1988, Mr. Wuitzel servedas President of Operation Independence. anonprofit organization whose goal is to assistIsrael io become economically independent.Currently he serves as a member of the Board ofVisitors of Virginia Commonwealth Uni4rsity,Trustee of Oberlin College, Director of OfficeDepot (the nation's largest office speciality retailstore chain), Washington Project for the Arts and

the Greater Washington Educationa! Telecoramu-'nications Association, w hich oNrates the publicradio and television stations in Washington. D.C.

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Biographical Sketcho144

COMMISSION ON THESKILLS OF THE AMERICANWORKFORCECOMMISSION ASSOCIATES

DavidJ. BarramVice PresidentCorporate AffairsApple Computer, Inc.

Eugene C. BatenConsultantAEtna Institute for Corporate Educatum

Ellen BravoAssociate Director9to5, National Association of Working \X omen

!ewe S. LercbeEducation Projects De%elopment ManagerFord Motor Compan

David Luthersenior Vice President. tairpi nate

Director-QualaOwning inciwpinated

John R. McCarthysenior IC, President and Mecum-

)111(w.tte Relatum,Eastman Kt Klak compallN

Frank MusickDuo. it nspecial PH netts

tilted Automobile Vc ()ricer,

Stephanie G. RobinsonDirectorEducation and Career DevelopmentNational Urban League, Inc.

Freeman SmithDirectorState and Local Government RelationsCorning Incorporated

Billy J. TidwellDirector of ResearchWashington OperationsNational, I irban league,. Inc.

James D. Van ErdenAdministratorOffice of Work-Based Learning

S Department of Labor

2n 445

ASSOCI4410

COMMISSION ON THESKILLS OF THE AMERICANWORKFORCECASE STUDY RESEARCHTEAM AND STAFF

Apple Computer, Inc.Lucille UeltzenManager, Apple University Operations

Center for the Study of Human ResourcesUniversity of Texas at AustinRobert GloverResearch .eissociate

The Chase Manhattan BankCharlotte PollardVice President, Learning Resources

Laura CoyneSecond Vice President, Learning Resources

Cresap, a Towers Perrin companyEugene R. Smoley. Jr.Vice President

Eastman Kodak CompanySusan ConnollyDirector of Education Development

National Alliance of BusinessBetsy Brown RuzziSenior Project Manager. Youth and Education

Programs

Pete CarlsonDirector, Economic and Policy Analysis

National Center on Educationand the Economy

Joan L. Wills, Project ManagerVice President

Jana L. CarlisleStaff Associate

Tina IsaacsStaff Associate

Larry A. McKnightNetw At Administrator

Ann Marie Potte.Staff Assistant

Dennis LyonsDirector of Technical Education Resources Patrina Smith

Administrative Av+istant

International Brotherhood of ElectricalWorkers

Ken EdwardsDirector of Technical Training

Case ctudy Team and Staff 20 5

Cathy D. SpangenburgStaff Assistant

Susan SullivanDirector, Administrative Services

246

Sheet Metal Workers' International William J. MaroniAssociation Consultant

Jerry OlejnkzakAdministrator. National Training Fund Debra Moms

Administrative AssistantPalnwr C PitcherConsultant

SJS, Inc.Karen BanijasAssi mate

Sarah H Ck Adam!Ass( x. late

Christine I icenanAssociate

scan Rot haAss(wiate

Marione TarmeAss( x. late

Chip oungAoc late

Telesis/Cresap, a Towers Perrin companyEdv,ard J Caron, case kain Ci)ordina fiwManaging Consultant

,tephen V" coonConsultant

Cnthia IsabellaAdministrame Assistant

nn M. MargherioResearch Associate

Norene M. RicksonConsultant

Denise RkketsonAdministratie Assistant

Deborah RosenResearch Associate

TPF&C, a Towers Perrin companyKarl F. PricePrincipal

United Automobile Workers/ChryslerNational Training Center

Linell Burrell, Jr.Grant and Training Specialist

U.S. Department of LaborAmbrose "Red" BittnerChief of National Priigram Caxirdination

and Training GroupIhircau ot Apprenticeship and Training

Janet Pease MooreExec uticc AssistantOffice of Work-Based Learning

2 61 4- taw Study:team and Mall

Publications Order FormNational Center on Education and the Economy Publications Quantity CostCaminisston on the Skills if the American WorkfireeAmerica's Choke: high skills or low wages!

The Report gthe Commtsston on the Skill, cf. the American WorkfarceISM 0-962706,3-0-2

1-9 copies $18 0(1 each ppd.

10+ $15.00 each ppd

America's Choke: high skills or low wages!Supporting Works

(Dm/Inter:A /he OnnenIvant's odernalional, labor rnarkel and trulusm. rewart-htOmtimmtott on the Ski& of the American WOrkihnv$15 each pptl

/Wend Role VertexTo Secure Our Future: The Federal Role in Education

Aational Center on Education and the EconomyS-.50 eat h ppd

Commimioned Papers - S-1.00 each pptlThe Yoke of Special Education: How To Break It

Alan Gartner and Dondhy Kerzner Lipskr

Training America: Strategies for the NationAnthony P carnecale and Janet Johnston

Higher Education and American CompetitivenessErnest A trilion

From "Solution" to Catalyst: A New Role for Federal Educationand Training Dollars

ilham I. Spring,

Also Available

A Nation Prepared: Teachers for the 21st CenturyThe Kepon if the Thsklorce on Teaching as a Prolession Jar theCanteqie ',arum on Education and the &mono'ISM\ 0-9616685-0-4

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The atillinisSioll on theSkills of theAnieriam Workforce'

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