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INSTITUTION
REPORT NO
PUB DATE
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CE 055 312
America's Choice: High Skills or Low Wages! The
Report of the Commission on the Skills of the
American Wr,Kforce.
National Center on Education and the Economy,
Rochester, NY.
ISBN-0-9627063-0-2
Jun 90
209p.
publications Order Selvice, National Center on
Education 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; *Employment
Qualifications; *Entry Workers; Job Development;
*Labor Force Development; Organizational Development;
*Productivity; *School Business Relationship;
Standards; Transitional Programs
IDENTIFIERS *Certificate of Initial Mastery
ABSTRACT
Work force growth will slow dramatically in the
1990s. To ensure a more prosperous future, productivity and
competitive position must be improvec. New high performance forms of
work organization operate very differently from the system of mass
manufacturing. These work organizaticms require large investments in
training. The approach to work and edlcation must fundamentally
change. Recommendations include the following: (1) a new educational
performance standard should be set for all students, to be met by age
16, with the standard established nationally and benchmarked to the
highest in the world; (2) states should take the responsibility for
assuring that virtually all students achieve the Certificate of
Initial Mastery (CIM), with new local Employment and Training Boards
creating and funding alternative learning environments for those who
cannot attain the CIM in regular schools; (3) a comprehensive system
of Technical and Professional Certificates and associate's degrees
should be created for the majority of students and adult workers who
do not pursue a baccalaureate degree; (4) all employers should be
given incentives and assistance to invest in the further education
and training of their workers and to pursue high productivity forms
of work organization; and (5) a system of Employment and Training
Boards should be established by federal and state governments,
together with local leadership, to organize and oversee the new
school-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
NATIONAL
CENTER
ON
EDUCATION
AND THE
ECONVMY
01,11ipyright © 1990 by the National Center on
Education and the Fconomy
ISBN 0-9627063-0-2
All rights reserved. Brief quotations from this report
may be reproduced without restriction, provided that
acknowledgement is given as follows.
This Report was prepared by the
National Center on Education and the Economy's
Commission on the Skills qf tbe American
Workforce.
Larger portions of this publicatkm may not be reproduced without permission of the National Center on
Education and the Economy.
An order form for this report, its supporting works and
additional reports and papers available from the
National Center on Education and the Economy can be
found at the end
5
The National Center on Education
and tbe Economy
The National Center on Education and the Economy is
a not-for-profit organization created to develop
proposals for building the world class education and
training system that the United States must have if it is
to have a world class economy. The Center engages
in policy analysis and development and works
collaboratively with others at local, state and national
levels to advance its proposals in the policy arena.
National Center on Education
and the Economy
39 State Street
Suite 500
Rochester, New York 14614
716/546-7620
FAX: 716/546-3145
iii
6
COMMISSION ON THE
SKILLS OF THE AMERICAN
WORKFORCE
Ira C. Magaziner, Chair
President
SJS, Inc.
William E. Brock, Co-Chair
Senior Partner
The Brock Group
Former Secretary
U.S. Department of Labor
Ray Mare-all, Co-C'hair
Chair in Economics and Public Affairs
L.B.J. School of Public Affairs
University of Texas at Austin
Former Secretary
U.S. Department of Labor
Robert M. Atkinson
Director of Academic Programs
School of Business and Industry
Florida A & M University
Owen Bieber
President
United Automobile Workers
Edward J. Cariough
General President
Sheet Metal Workers' International
Association
Aathony P. Carnevale
Vice President of National Affairs
and Chief Economist
American Society for Training
and Development
Paul J. Choquette, Jr.
President and Chief Executive Officer
Gilbane Building Company
V
Richard Cohon
President
C. N. Burman Company
Badi G. Foster
President
AEtna Institute for Corporate Education
Thomas Gonzales
Chancellor
Seattle Community College District VI
Rear Admiral W. J. Holland, Jr., USN (Retired)
Presictent
Educational Foundation
Armed Forces Communications and
Education Association
James R. Houghtor_
Chairman of the Board and
Chief Executive Officer
Coming Incorporated
James B. Hunt, Jr.
Partner
Poyner & Spruill
Former Governor
State of North Carolina
John R. Hurley
Vice Prtysident and Director
Corporate Training and Educational
Resources
The Chase Manhattan Bank
John E. Jacob
President and Chief Executive Officer
National Urban League, Inc.
The Commission
Thomas H. Kean
President
Drew University
Former Governor
State of New Jersey
William H. Kolberg
President
National Alliance of Business
William Lucy
International Secretary/Treasurei
American Federation of State,
County and Municipal Employees, AFL-CIO
Margaret LA. Mac Vicar
Dean for Undergraduate Education
and Professor
Massachusetts Institute of Technology
Eleanor Holmes Norton
Professor of Law
Georgetown University Law Center
Former Chairwoman of the Equal
Employment Opportunity Commission
Karen Nussbaum
Executive Director
9to5, National Association of
Working Women
Peter). Pesti llo
Vice President
Corporate Relations and Diversified
Businesses
Ford Motor Company
Philip H. Power
Chairman
Si iburban Communications Corporation
Lauren B. Resnick
Director
Learning Research and Development Center
University of Pittsburgh
Mt Commission 8
Kje ll-Jon Rye
Teacher
Bellevue (WA) Public Schools
Howard D. Samuel
President
Industrial Union Department
AFL-CIO
John Sculley
Chairman, President and
Chief Executive Officer
Apple Computer, Inc.
William). Spring
Vice President
District Community Affairs
Federal Reserve Bank of Boston
Anthony). Trujillo
Superintendent
Sweetwater Union (CA) High School District
Marc S. Tucker
President
National Center ori Education
and the Economy
Laura D'Andrea Tyson
Director of Research
Berkeley Roundtable on the
International Economy
University of California at Berkeley
Kay R. Whitmore
Chairman, President, and
Chief Executive Officer
Eastman Kodak Company
Alan L Wurtzel
Chairman of the Boa id
Circuit 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.,14
Paul .1 Choquette. Jr
grglA
Bach G Foster
Owen Bieber
Anthony P. Carnevale
'7:a.....t a
I
Richard Cohon
c):~11 Thomas gonzaks
9
Signalorm
W. J. Holland, Jr. James R. Houghton
9-1447 i41w
e
James B. Hunt, Jr. John R. Hurley
John E. Jacob
lid
William H. Kolberg
Margaret L. A. MacVicar
eLAIN1/4-°'
Karen Nussbaum
Philip H. Power
Ssgnatorses
1 0
Thomas H. Kean
4,41111011.
Eleanor Holmes Norton
dogrito
Peter 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 Or
Competitive Advantage?
Chapter 4: The Organization Of Work
In America
Chapter 5: How We Prepare Our
Children For Work
Chapter 6: The Education And Training
Of America's Adult Workers
Chapter 7: Voices From Abroad
Chapter 8: The Choice
Chapter 9: .The Foundation Skills
Chapter 10: Universal Mastery Of
The Foundation Skills
Chapter 11: Technical And Professional
Education
Chapter 12: Lifelong Learning And
High Performance
Work Organizations
Chapter 13: And A System To
Pull It Together
Chapter 14: In Conclusion
XI
1 The Study
13 Supporting Information
19 I. A New American Assessment
19 For Foundation Skills
23
31
95
99
99
II. Alternative Programs For At-Risk 105
Youth: Sweetwater Union High
School, The Boston Compact And
The Wegman's Program
III. American Examples Of Successful 109
37 Worker Training
IV. Skills Investment Taxes: Foreign 115
43 Examples
V. Financing Our Proposals 119
Acknowledgments 129
Appendices 133
National Center on Education 133
and the Economy
Board of Trustees
Commission on the Skills of the 135
American Workforce
77 Biographical Sketches
Commission on the Skills of the 145
American Workforce
Associates
Commission on the Skills of the 146
American Workforce
Case Study Research Team and Staff
Publications Order Form
49
57
67
69
71
81
87
91 149
,* tie.
EXECUTIVE SUMMARY
The Problem
Since 1969, real average weekly earnings in
the United States have fallen by more than
12 percent. This burden has been shared
unequally. The incomes of our top 30
percent of earners increased while those of
the other 70 percent spiraled downward.
In many families, it now takes two
people working to make ends meet, where
one was sufficient in the past.
The United States is in the midst of the
second longest economic expansion in its
history. But that expansion is built largely
on the fact that 50 percent of our population
is employed compared with 40 percent in
1973. Forty million new i,obs were created
as the 'baby boom' generation reached
working age, and more women entered the
workforce. More of us have been working
so we produced more.
However. workforce growth will skriv
dramatically in the 1990s. We can no longer
grow substantially just by adding new
workers.
The key to maintaining, to say nothing
of improving, our standard of living is
productivity growth more products and
services from every member of the
workforce.
i
But, during the past two decades, our
productivity growth has slowed to a crawl. It
now takes nearly three years to achieve the
same productivity improvement we used to
achieve in one year.
If productivity continues to falter, we
can expect one of two futures. Either the
top 30 percent of our population will grow
wealthier while the bottom 70 percent
becomes progressively poorer or we all slide
into relative poverty together.
The Task
To ensure a more prosperous future, we
must improve productivity and our
competitive position. We cannot simply do
this by using better machinery, because low
wage countries can now use the same
machines and can still sell their products
more cheaply than we can.
The key to productivity improvement
for a high wage nation lies in the third
industrial revolution now taking place in the
world. The steam engine and electric motor
drove the first two industrial revolutions,
causing profound changes in work organization. This boosted productivity, quality and
living standards dramatically. The creation
of the modem factory in the 1800's and mass
production in the 1900's followed these
technology breakthroughs.
Executive Su mmaty
The advent of the computer, high speed
communication and universal education are
heralding a third industrial revolution, a
revolution the key feature of which is high
performance work organization.
The Organization Of Work In
America
The organization of America's workplaces
today is largely modeled after the system of
mass manufacture pioneered dunng the early
1900's. The premise is simple: Break
complex jobs into a myriad of simple rote
task.. which the worker then repeats with
machine-like efficiency.
The system is managed by a small
group of educated planners and supervisors
who do the thinking for the organization.
They plan strategy, implement changes,
motivate the workers and solve problems.
Extensive administrative procedures allow
managers to keep control of a large number
of workers. This form of work organization
is often referred to as the *Taylor' model.
Most employees under this model need
not be educated. It is far more important
that they be reliable, steady and willing to
follow directions.
But in the world's best companies,
new I- 'An performance work organizations
are replacing this 'Taylor' method. These
companies are using a new approach to
I
Executim Summar
5
unleash malor advances in productivity,
quality, variety and speed of new product
introductions.
Mass production methods will continue
to produce high volume, inexpensive goods
and services for a long time to come. But
what the world is prepared to pay high
prices and high wages for now is quality,
variety and responsiveness to changing
consumer tastes, the very qualities that the
new methods of organizing work make
possible.
'Tayloristic' methods are not well suited
to these goals. Firms struggling to apply the
traditional methods of work organization to
more complex technologies, more frequent
product introductions, increased quality
requiremems and proliferating product
variety often create cumbersome and inefficient bureaccracies.
The new high performance forms of
work organization operate very differently.
Rather than increasing bureaucracy,_ they
reduce h by giving front-line workers more
responsibility. Workers are asked to use
judgment and make decisions. Management
layers disappear as front-line workers assume responsibility for many of the tasks
from quality control to production scheduling that others used to do.
2
Work organizations like these require
large investments in training. Workers' pay
:t-vels often rise to reflect their greater
qualifications and responsibilities. But the
productivity and quality gains more than
offset the costs to the company of higher
wages and skills development.
Despite these advantages, 95 percent of
American companies still cling to old forms
of work organization.
Is There A Skills Shortage In The
United States?
Because most American employers organize
work in a way that does not require high
skills, they report no shortage of people who
have such skills and foresee no such shortage. With some exceptions. the education
and skill levels of American workers roughly
match the demands of their jobs.
Our research did reveal a wide range
of concerns covered under the blanket term
of 'skills.' While businesses everywhere
complained al)out the quality of their applicants, few talked about the kinds of skills
acquired in school. The primary concern of
more than 80 percent of employers was
finding workers with a good work ethic and
appropriate social behavior: 'reliable,' 'a
good attitude. 'a pleasant appearance,' 'a
good personality.'
Most employers we interviewed do not
expect their skill requirements to change.
Despite the widespread presumption that
advancing technology and the evolving
3
service economy will create jobs demanding
higher skills, only five percent of employers
were concerned about a skills shortage.
These were mainly large manufacturers,
financial service organizations and communications companies.
The reason we have no skills shortage
today is that we are using a turn-of-thecentury work organization. If we want to
compete more effectively in the global
economy, we will have to move to a high
productivity work organization.
How We Prepare Our Front-Line
Workers For Work
More than 70 percent of the jobs in America
will not require a college education by the
year 2000. These jobs are the backbone of
our economy, and the productivity of workers in these jobs will make or break our
economic future.
No nation has produced a highly
qualified technical workforce without first
providing its workers with a strong general
education. But our children rank at the
l)ottom on most international tests behind
children in Europe and East Asia, even
behind children in some newly industrialized
countries.
More than any other country in the
world, the United States believes that natural
ability, rather than effort, explains achievement. The tragedy is that we communicate
1 6 Executive Summary
to millions of students every year, especially
to low-income and minority students, that
we do not believe that they have what it
takes to learn. They then live up to our
expectations, despite the evidence that they
can r2.eet vety high performance standards
under the right conditions.
Unlike virtually all of our leading competitors, we have no national system capable
of setting high academic standards for the
non-college bound or of assessing their
achievement against those standards.
America may have the worst school-towork transition system of any advanced
industrial country. Students who know few
adults to help them get their first job are left
to sink or swim.
Only eight percent of our front-line
workers receive any formal training once on
the job, and this is usually limited to orientation for new hires or short courses on team
building or safety.
The American post-secondary education
and training ,:ystem was never designed to
meet the needs of our front-line workers.
The system is a combination of education
programs for full-time college students and
short term training for the severely disadvantaged. and can be difficult to access. Because employers have not set training standards, few studeli's can be sure that there is
a market for the courses they pursue. Education is rarely connected to training and
both are rarely connected to an effective job
service function.
Ewc Mill! Summary 1 7
Anotfier Way
While the foreign nations we studied differ
in economy and culture, they share an
approach to the education and training of
their workers and to high productivity work
organiration.
They insist that virtually all of their students reach a high educational standard.
We do not.
They provide 'professionalized' education
to non-college bound students to prepare
them for their trades and to ease their
school-to-work transition. We do not.
They operate comprehensive labor market
systems which combine training, labor
market information, job search and
income maintenance for the unemployed.
We do not.
They support company based training
through general revenue or payroll tax
based financing schemes. We do not.
They have national consensus on the
importance of moving to high productivity
forms of work organization and building
high wage economies. We do not.
Our approaches have served us well in
the past. They will not serve us well in the
future.
4
The Choke
Americans are unwittingly making a choice.
kis a choice that most of us would probably
not make were we aware of its consequences. Yet every day, that choice is
becoming more difficult to reverse. It is a
choice which undermines the American
dream of economic opportunity for all. It is
a choice that will lead to an America where
30 percent of our people may do well at
least for awhile but the other 70 percent
will see their dreams slip away.
The choice that America faces is a
choice between high skills and low wages.
Gradually, silently, we are choosing low
wages.
We still have time to make the other
choice one that will lead us to a more
prosperous future. To make this choice, we
must fundamentally change our approach to
work and education.
1. Problem: Two factors stand in the way
of producing a highly educated workforce:
We lack a clear standard of achievement and
few students are motivated to work hard in
school. One reason that students going right
to work after school have little motivation to
study hard is that they see little or no relationship between how well they do in
school and what kind of job they can get
after school. Other advanced industrial
nations have stringent prformance standards
that virtually all students must meet at about
age 16 and that directly affect their employment prospects.
5
Recommendation: A new educational
perfbrinance standard should be set for
students, to be met by ate 16 This
standard shoals, be estabashed nationally and bespcbmarbed to tbe bftbest
the world.
We propose that all American students
meet a national standard of educational
excellence by age 16, or soon thereafter.
Students passing a series of performance
based assessments that incorporate the
standaid would be awarded a Certificate of
Initial Mastery.
' Possession of the Certificate of Initial
Mastery would qualify the student to choose
among going to work, entering a college
preparatory progranl or studying for a
Technical and Professional Certificate,
described below.
Creation of the Certificate of Initial
Mastery standard would require a new
approach to student performance assessment. We recommend the creation of new
performance based examinations for which
students can explicitly prepare. The assessment system would provide multiple opportunities for success rather than a single high
stakes moment of possible failure. Most
important, the examination, though set at a
very high standard, is not intended as a
sorting mechanism on the pattern of virtually
all the major tests now in use. Our goal is to
1 8 Evecullve Summary
set a tough standard that almost everyone
will reach, although not all at the same time.
Once created, this system would establish objective standards for students and
eiucators, motivate students and give employers an objective means to evaluate the
accomplishments of students.
2. Probleim More than 20 percent of our
students drop out of high school almost
50 percent in many of our inner cities.
Thtse dropouts go on to make up more than
one third of our front-line workforce. Turning our backs on those dropouts, as we do
now, is tantamount to turning our backs on
our future workforce.
Recommendation: Tbe states should
take responsibility for assaring that
virtually all students achieve tbe Certificate of hoitial Mastery. Through tbe new
local Employment and Training Boards,
states, with federal assistance, should
create and fund akernative learning
enviromnents for tbose wbo cannot
attain the Certificate of initial Mastery
in regular schools.
All student; should be guaranteed the
educational attention necessary to attain the
Certificate of Initial Mastery by age 16, or as
soon as possible thereafter. Youth Centers
shoukl be established to enroll school
dropouts and help them reach that standard.
9
Federal, state and local funds should be
raised oi reallocated to finance these dropout recovery programs. Once the Youth
Centers are created, children should not be
permitted to work before the age of 18
unless they have attained the Certificate of
Intal Mastery or are enrolled in a program
to attain it.
3. Probkm: Other industrial nations have
multi-year career-oriented educational
programs that prepare students to operate at
a professional level in the workplace.
Graduates of these programs have the skills
to hit the ground running whcn they get
their first full-time job at age 19 or 20.
America prepares only a tiny fraction of its
non-college bound students for work. As a
result, most flounder in the labor market,
moving from low paying job to low paying
job until their mid-twenties, never being
seriously trained.
Recommendation: A comprehensive
system of Technical andivrofess-WWit
Certificates and associate's degtees
should be created for tbe majority of
our students and adult workers wbo do
not pursue a baccalaureate degree.
Technical and Professional Certificates
would be offered across the entire range of
service and manufacturing occupations. A
student could earn the entry-level occupation
specific certificate after completing a two- to
four-year program of combined work and
Eveciiniv Sit tummy 6
study, depending upon the field. A sequence of advanced certificates, attesting to
mastery of more complex skills, would be
available and could be obtained throughout
one's career.
The Secretary of Labor should convene
national committees of business, labor,
education and public representatives to
define certification standards for two- to
four-year programs of professional preparation in a broad range of occupations. These
programs should combine general education
with specific occupational skills and should
indude a significant work mponent.
Students could pursue these programs
at a wide variety of institutions accredited to
offer them, including high schools, community colleges and proprietary schools. The
system should lx designed to make it possible for students to move easily between the
Certificate programs and college.
A means should be established to
ensure that all students can receive financing
to pursue these programs.
4. Problem: The vast majority of American
employers are not moving to high performance work organizations, nor are they
investing to triin their non-managerial
employees for these new work organizations. The movement to high performance
work organizations is more widespread in
other nations, and training of front-line
workers, funded in pan by national assessments on employers or general public
revenues, is commonplace.-
Recommendationt Al entployers should
be Ono goottetres and assistottat to
invest hi the ftwthor oikocation and
training q f tbotr workers and to pontoe
bigb productivity Arms qf work orgassi-
=Hos
We piopose a system whereby all
employers will invest at least one percent of
their payroll for the education and training of
their workers. Those who do not wish to
participate would contribute the one percent
to a general training fund, to be used by
states to upgrade worker skills. We further
recommend that public technical assistance
be provided to companies, particularly small
businesses, to assist them in moving to
higher performance work organizations.
5. Problem: The United States is not well
organized to provide the highly skilkd
workers needed to support the emerging
high performance work organizations.
Public policy on worker training has been
largely passive, except for the needs of a
small portion of the severely disadvantaged
population. The training system is fragmented with respect to policies, administration and service delivery.
Evearrive Summary.
Recommendation: A system of Employment anti &Make Boards Mould be
estadoNsiarAby ~era/ and-itatiegnithirit-:
meats, twitter witb local leadersbip, to
organise and oversee tbe new scbookowork trattsition program and training
systems see Ce A,
We envision a new, more comprehensive system where skills development and
upgrading for the majority of our workers
becomes a central aim of public policy.
The key to accomplishing these goals is
finding a way to enable the leaders of our
communities to take responsibility for building a comprehensive system that meets their
needs. The local Employment and Training
Boards for each major labor market would:
Take responsibility for the school-to-work
and Youth Center-to-work transition for
young people.
Manage and oversee the Youth Centers.
Manage and oversee a 'second chance'
system for adults seeking the Certifi( ate of
Initial Mastery.
Manage and oversee the system for awarding Technical and Professional Certificates
at the local level.
Manage a labor market information
system.
Manage and oversee the job service.
Coordinate existing programs.
Kva nave Su nunwy 21
The states would need to create a
parallel structure to support tbel9citl,Upgr4,
kiieWkielUriCtions and establish
state standards for their operation.
In Conclusion
America is headed toward an economic cliff.
We will no fdriger be-able tn,put,atigbeK,,
proportion of our people to work to
generate economic growth. If basic
changes are not made, real wages will
continue to fall, especially for the majority
who do not graduate from four-year
colleges. The gap between economic 'haves'
and 'have nots' will widen still further and
social tensions will deepen.
Our recommendations provide an
alternative for America. We do not pretend
that this vision will he easily accepted or
quickly implemented. But we also cannot
pretend that the status quo is an option. It is
no longer possible to be a high wage, low
skill nation. We have choices to make:
Do we continue to define educational
success as 'time in the seat,' or choose a
new system that focuses on the demonstrated achievement of high standards?
Do we continue to provide little incentive
for non-college bound students to study
hard and take tough subjects, or choose a
system that will reward real effort with
better pay and better jobs?
8
Do we continue to turn our backs on
America's school dropouts, or choose to
take responsibility for educating them?
Do we continue to provide unskilled
workers for unskilled jobs. or train sl" xl
workers and give companies incentivLs to
deploy them in high performance work
Organizations?
Do we continue in most companies to
limit training to a select handful of managers and profesionals. or choose to provide
training to front-hne workers as well?
Do we cling to a public employment and
training system fragmented by institutional
harriers, muddled by overlapping bureaucracies and operating at the margins of
the labor markt,. or do we choose a
unified system that addresses itself to a
maiority of workers?
Do we continue to remain indifferent to
the low wage path being chosen by many
companies, or do we provide incentives
for high productivity choices?
Taken tc)gether. the Commission's
recommendations provide the framework for
developing a high quality American education am. training system, closely linked to
high performance work organimtions. The
system we propose provides a uniquely
American solution. Boldly executed, it has
the potential not simply to put us on an
9
equal footing with our competitors, but to
allow us to leap ahead, to build the world's
premier work te. In so doing, we will
create a form.. ie competitive advantage.
The status quo is not an'option. The
choice we have is to become a nation of
high 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 Commission
have grown increasingly uneasy as we have
watched Singapore. Taiwan and Korea grow
from run-down Third World outposts to
world premier exporters; as Germany, with
one quarter of our population, almost
equaled us in exports; as Japan became the
world's economic juggernaut; and, as America
became the world's biggest borrower.
As all this happened, we heard the
excuses: The countries we beat in the Second World War are simply regaining their
former place in the world. The Europeans
and the Japanese are exploiting their low
wages. Our competitors are class-ridden
countries.
The truth is otherwise: Our former
adversaries are doing far better n relation to
us than they did before the war. A dozen
nations now pay wages above ours. Our
distribution of income is more skewed than
any of our major competitors and our poverty
rate is much higher.
Our education statistics are as disappointing as our trade statistics. Our children
rank 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. They
compare a small number of their best to our
much larger average.
The facts are otherwise: Many of the
countries with the highest test scores have
more of their students in school than we do.
The apologists say it is unfair to compare their scores to ours because we must
educate a diverse population, while their
student bodies are homogeneous. This is
the most disturbing excuse of all. Do we
really believe that Black, Hispanic and
immigrant children can't be educated to the
same standard as Whites? Whites are a
declining percentage of our youth. If we
bow to this excuse, we are giving up on
America.
But isn't this America-bashing? Don't
we have firms in America as competitive as
any in the world? Don't we have schools as
good as those in any country? Isn't it true
that .ve are in the midst Of one of the longest
economic expansions this country has ever
had?
Sure, but we are not facing the facts
about our future.
What we are facing is an economic cliff
of sorts. And the front-line working people
of America are about to fall off it.
2 :Le
From the 1950's to the 1970's, Arr :rica's
productivity grew at a healthy pace. The
nation was getting richer, and workers lived
better on what they earned.
Since then, the rate of increase in
productivity has dropped dramatically. The
distribution of income in the United States
has been worsening. Those with college
degrees are prospering, but the front-line
workers have seen the buying power of their
paychecks shrink year after year.
To be sure, the economy has grown.
But that growth came from the fact that more
of us have been working. During the 1980's
a higher percentage of Americans were
working than at any time in this century.
The 'baby boom' generation came into the
workforce and many women went to work
to maintain family incomes at their former
levels.
In addition, the country has been
borrowing at unprecedented levels to maintain national income. We underinvested in
.,r infrastructure and allowed it to deteriorate. As a result, many of us are living as
well as we did, but we are living on borrowed money and borrowed time.
What happens now? In the future, we
cannot grow our economy by putting more
people to work, as we have done for 30
years. Fewer people are entering the
workforce. and few , - still will enter in the
years ahead. We must grow by having every
25
Pre/ at e
America-1 worker produce more. If we
don't, our incomes will go into a free fall with
no end in sight.
That is the economic cliff we face.
To avoid falling off, many policy
changes are needed, but one thing is certain:
we must work .nore productively and be
more competitive. We cannot do this simply
by using better machinery, because low wage
countries can now use the same machines
and still sell their products more cheaply than
we can.
We can do this only by mobilizing our
most vital asset, the skills of our people
not just the 30 percent who will graduate
from college, but the front-line workers, the
people who serve as bank tellers, farm
workers, truck drivers, retail clerks, data entry
operators, laborers and factory workers.
We can do this only by reorganizing the
way we work in our stores and factories, in
our warehouses and insurance offices, and in
our government agencies and hospitals. We
can give much more responsibility to our
front-line workers, educate them well and
train them to do more highly skilled jobs.
By doing this, we streamline work.
Many fewer supervisors, fewer quality checkers, fewer production schedulers and fewer
maintenance people are needed, so organizations become more efficient. Because they
are more efficient. they can sell more. Be14
cause they can sell more, they can expand.
Because they can expand, they can employ
more people. Although each operation
requires fewer people, society as,a,whole
can increase employment and wages can go
up.
Our most formidable international
competitors are doing just this. For the most
part, we are not.
We still have a robust economy. Some
of our firms are among the best run in the
world. They learned how to organize for
high productivity. If many more do so, and
we make the required investment in skills for
our front-line workers, this country will have
a very bright future. If not, our incomes will
decline at an accelerated pace.
This is our choice: high skills or low
wages.
Bill Brock
Co-Chair
Ira C. Magaziner
Chair
Ray Marshall
Co-Chair
15 2 6 Preface
S<, ar.0 itr%
, .'' 1... L '' , II .0 1
'
"
L ,ts r' 416,, L."
THE PROBLEM
Over the past two decades, our productivity
growth-has slowed to a craw1,-our incomes
have stagnated and the wage gap has widened between our nation's educational
shaves' and have nots.'
From 1960 to 1973, American private,
nonagricultural workers each produced an
average of 2.9 percent more every year than
the year before. Since 1973, it has taken
nearly three years to achieve the same
productivity improvement gained in one pre1973 year.
Our economy has grown because we
now have 50 percent of our people working
instead of 40 percent as in 1973. We added
40 million new jobs. More of us have been
working, so we have produced more.
Because our economic growth has not
come from improved productivity, however,
our wages have not improved. In fact, real
average weekly earnings have dropped more
than 12 percent since 1969.
These hardships have not been borne
equally by all Americans:
The highest earning 30 percent of American families increased their share of
national income from 54 percent in 1967
to 58 percent in 1987, while the bottom 70
percent have been losing ground.
19
The WcOndinit-CIRE
A Few Of Us Are Getting Richer,
But Most Of Us Are Losing Ground
58
55%
C,11111°11.1111461:4
46
45%
42
1967 1987
Distribution of income in the United States
1967-1987
Source: Bureau of the Census
P8 The Problem
Over the past 15 years, the earnings gap
between white collar professionals and
skilled tradespeople has gone from two
percent to 37 percent; the gap between
professionals and clerical workers has
gone from 47 percent to 86 percent.
Over the past decade, earnings of collegeeducated males age 24 to 34 increased by
10 percent. Earnings of those with only
high-school diplomas declined by nine
percent. And those in the workforce who
do not hold high-school diplomas saw
their real incomes drop by 12 percent.
Over 60 percent of White families have
incomes over $25,000 per year, compared
with only 49 percent of Hispanic families
and 36 percent of Black families. The
poverty rate for Black families is nearly
three times that for Whites, and the gap
has been widening.
One in five American children one
third of our future front-line workforce
Is born into poverty.
9
11w Pros, em
The More Education You Have,
The More Money You Earn
aria , 0 Men 24-34
0 Women 24-34 li 0
15
4 10%
2
S
IASI.
LI
.s
-12
HJ 11 +11 +11 fft
S
Changes in Earnings
by Education Level
1979-1987
Source: fducation & IncomtUagssgtnal&
Levy & Mkbel
20
What The Future Holds
Our population in the 1990's is likely to
grow at about eight percent, a slower rate
than for any period since the 1950's. This
compares to a 1970's growth rate of 20
percent and a 1980's rate of 11 percent.
Over 40 percent of new workforce entrants
will be minorities and immigrants, groups
which are at disproportionately low income
levels tmlay.
25%
The Economic Cliff:
Workforce Growth Is Slowing
0 Aduk Population
librkforce
16
15
16
11
1960's 1970's 1980's 1990's
(Estimated) ''.owth of Adult Population
r-kforce
gu efLabor Statistics
We can no longer depend upon more
people working to give us economic growth.
If productivity continues to falter, and real
wages decline, we can expect one of two
futurcb. Either the top 30 percent of our
population grows wealthier while the bottom
70 percent becomes progressively poorer or
we may ail slide into relative poverty together.
$350
$300
$250
The Economic Cliffs
Earnings Are Declining
1949 1959 1969 1979 1989
Average Weekly Earnings
Total 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 shall
see, this will require major changes in the
way we organize our workplaces, and a
major investment in the skills of our people.
60%
50%
40%
130%
20%
10%
0
1960-73 1973-09
% Growth for Two Periods Since 1960
The Emma, erhm
Because More Are-Worlds*
4.111111111111111111111111 52
veasge
29
32
9
Sources: Bureau of Economic Analysis
Bureau of labor Statistics
31
Me Pmblem 20
IS THERE A SKILLS
SKORTAGE?
A front-page series in The Neu, York Times
last September foretold an impending crisis
in our national workforce. David Kearns,
Chairman of Xerox Corporation, described
"the makings of a national disaster." Former
Chairman of Procter & Gamble Brad Butler
predicted the creation of -a Third World
within our country." And James Burke.
Chief Executive Officei of Johnson & Johnson, lamented "the American dream twned
nightmare."
Strong language is not new to the
debate over the American skills crisis. Since
the release of the Workforce 2(X)0 report in
1987. the attention of our nation's business
and education communities, and increasingly
of our governments, has focused on the
problem of the mismatch of skills to jobs.
Companies are sounding the alarm.
Telephone sales jobs are going begging in
Boston because MCI cannot find qualified
workers; textile workers are no longer able
to operate their computerized machines; and
aircraft manufacturers in California have
teamed up out of necessity to train employees. Companies such as New York Tele2
phone report hiring frustrations of epic
proportions 57,000 applicants had to be
tested to find 2,100 who were qualified to fill
entry level technical jobs.
The cry from America's board rooms,
education think tanks and government
officials is two-fold: America's workers are
ill-equipped to meet employers' current
needs and ill-pmpared for the rapidly approaching high technology, service-oriented
future.
So why, given the scope of the existing
debate, launch yet another study of
America's skills crisis? It was our purpose to
go back and examine the skills issue from
the bottom up, to propose solutions by
grappling with the problem's underlying
causes.
This required visiting hundreds of
American firms in all sectors of the economy
and interviewing thousands of employers,
personnel managers, production supervisors
and workers. The goal of our inquiry was to
understand what American workers are
doing what their jobs demand, what their
employers expect of them and how these
expectations are likely to change in the
future.
.
!s %here .4 Skills Shortage'
. . . why, given tbe scope elf
the existiug debate, lautscb
yet another study qf
America's skills crisis? It
was oar purpose to go back
and exassisse tbe Wits issue
from the bottom NA to
(grapple) with the proldenes
underlying causes.
13
The primary concern of more
than 80 percent of employers
is finding workers with a
good work ethic and
appropriate 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 skills
shortage, but one much more subtle and
complex, and ultimately more discomforting,
than that reflected in the public debate.
Our research revealed a wide range of
concerns covered under the blanket term of
'skills.' While businesses everywhere complain about the quality of their applicants,
few -der to the kinds of skills acquired in
school. The primary concern of more than
80 percent of employers is finding workers
with a good work ethic and appropriate
social behavior 'reliable,"a good attitude,'
'a pleasant appearance,"a good personality.'
Although a few managers are worried
about literacy and basic math skills, education levels rarely seem a concern. Employers do not complain about an inability to do
algebra or write essays, though some are
frustrated that a large number of their employees do not possess the elementary
capability to read a production schedule or
follow an instruction card.
Many employers require a high-school
diploma for all new hires, yet very few
believe that the diploma indicates educational achievement. More than 90 percent
view the diploma as a sign of the applicant's
reliability and staying power, proof only that
they did not drop out.
A Mere A clalls Shortage%
Less than 30 percent of our sample
firms are concerned about the labor market
predictions of Workforce 2000: Work and
Workers for the 21st Centuty that women,
minorities and immigrants will make cp the
vast majority of new entrants to the
workforce in the 1990's and jobs requiring
higher skills will grow faster than low skill
jobs. Few of these firms are worried about
skills. Their focus is on providing day care
for workers' children or English as a Second
Language classes.
A few of the employers surveyed (15
percent) mentioned occupation-specific
shortages. The most commonly reported
shortages are for workers in the traditional
craft apprentice trades, like skilled construction or manufacturing, and in such traditionally female occupations as skilled secretaries,
clerks and nurses.
These shortages can be largtly attributed to changes in the relative earning
potential of these workers. Men and women
who ordinarily would have gone into skilled
non-college jobs that require substantial
preparation have chosen to attend college to
take advantage of the higher wages offered
to college graduates.
3 5
24
120%
100%
80%
60%
40%
20%
0
The Reladve Wages Of Front4hse Workers
Are Going Down
0 1972
ill 1967
I
si 111 Change in Wages
for Selected Occupations
Relative to Each Other
Source: Bureau of Labor Statistics
25 3 6
Perhaps even more interesting than the
absence of an obvious skills gap was the
lack of any expectation among the majority
of employers that their skill requirements
would be changing. Despite the widespread
presumption that advancing technology and
the evolving service economy would create
jobs demanding higher skills, only five
percent of employers are concerned about
growing educational skill needs. These were
mainly large manufacturers, financial service
organizations and communications finns.
To sum up, in our survey of employers
across America, we found:
Only five percent of employers feel that
education and skill requirements are
increasing significantly.
More than 80 percent of employers express concern about 'skills' shortages, but
they generally mean a good work ethic
and social skills.
Employers who think that education levels
are insufficient usually refer to illiteracy
and a lack of basic math skills.
Only 15 percent of employers report
difficulty finding workers with the appropriate occupational skills. These shortages
are generally in chronically underpaid
'women's' occupations and traditional craft
trades.
Is There A Skills Shortage?
Onlyilve percent qf
employers feel that education
and skill requirements are
increasing significantly.
Only 15 percent qf employers
report difilasityfroding
:Porkers with tbe appropriate oecapatiowat
Mese shortages ewe
generally in chronically
underpaid 'women's'
occupations and traditional
crq/1 trades.
7
... in a broad surrey of
employment needs across
America, we found little
evidence of a far-reacbing
desire for a more educated
workforce.
All 1o14 more tban 70 percent
of tbe Jobs in America will not
require a college education
by tbe year 2000. These Jobs
are tbe backbone of our
economy. and tbe
productivity of workers in
these Jobs wig, make or break
our economic future.
38
We did find a skills shortage of sorts.
The problem of preparing young people
who are reliable, presentable and who
communicate well on the job should not be
taken lightly. For the people who lack them,
these skills often prove permanent obstacles
to acquiring meaningful employment.
But in a broad survey of employment
needs acros.s America, we found little evidence of a far-reaching desire for a more
educated workforce.
Where Are People Working?
The evident absence of a serious shortage of
people with strong cognitive skills is easier
to understand after an exlanination of the
places where most Americans work.
Despite the central position that a
college education plays in the American
dream. the United States employs one and a
half times as many janitors, nearly twice as
many secretaries and five times as many
clerks as all the lawyers. accountants, investment bankers, stock brokers and computer
programmers combined.
Despite the decline of the agricultural
sector in our high-tech society, America still
employs more than two million farm workers
compared with 85-1.0(X) doctors and dentists.
There are 1.8 million engineers in America.
but 6.2 million people work as retail sales
clerks and more than 18 million on factory
floors.
A 1 here .1 skill.+ shortage'
All told, more than 70 percent of the
jobs in America will not require a college
education by the year 2000. These jobs are
the backbone of our economy, and the
productivity of workers in these jobs will
make 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
Professional
Sales
What Skills Do Jobs Require?
According to our survey of national skill
requirements, as confirmed by the Bureau of
Labor Statistics, jobs held by the total United
States workforce can be categorized as
follows:
3 9
26
More than one third require little more
than an eighth grade education.
More than one third require a basic education plus some additional non-college
skills.
Education Required For Today's Jobs
ri 16 Years
or More
8-10 Years Plus
Additional
Training
No More
Than 8 Years
Source: Bureau of Lab(); Statistics
4 0
Less than one third require a four-yeai
college degree.
Category 1: Out of 117 million employed workers in 1989, 40 million, or 34
percent, were employed in jobs that required
less than a high-school education. These are
the people who work behind counters, clean
offices, make hotel beds, drive buses, take
care of the sick nd elderly, grow, prepare
and serve tixxl, wash dishes and work in
factories. Most of these jobs require only
eighth grade level math and communication
A pleasant personality behind the
service counter, physical stamina on the
construction site or a steady hand on the
wheel tend to be the important requirements.
Category 2: Forty-two people
arc employed in jobs in America that require
a significant amount of training beyond a
basic euucation. but not a four-year college
degree. In this group fall the traditional
skilled NNorkers apprenticed trades, auto
mechanics. secretaries and data workers.
firefighters. electricians. plumbers and
technicians. It was in these jo'ts that Nxe
fi)und occupation-specific skills shortages
most often mentioned.
Category 3: The last group of 35
million people are in jobs that are likely to
require a four-year collego degree. Workers
in this category include managers, financial
analysts, accountants, salespeople, doctors.
ls i1en..1 Skills Shortew'
. . . Jobs hekl by the total
United States worifforce can
be categorized as follows:
More than one third
require little more than an
eighth grade education.
More then one third
require a bask education
plus some additional noncollege skills.
Less than one third require
a four-year college degree.
4 1
The introduction of new
technology increases job skill
requirements for some, but
lowers skill requirements for
others . . . In our survey we
found more examples of deskilling.
With some exception& the
education and skill lerels of
American workers roughly
match the demands of
their jobs.
42
lawyers, teachers and engineers. These
people have gained the most income as the
real wages of workers in the other two
categories have declined.
Is America Changing The Way It
Works ?
The distribution of jobs among these three
categories has changed only slightly over the
last 17 years. The proportion of jobs in both
the unskilled and skilled craft categories has
dropped only three to four percentage points
each from their levels in 1972 (from 37
percent to 34 percent in the first category, 40
percent to 36 percent in the second).
The management and professional jobs
of Category 3 have increased from 23 to 30
percent since 1972. Even more significant. a
higher number of people occupying these
jobs are now graduates of four-year colleges
close to half merall, and more than three
quaners of new entrants.
The major 'skills gap defined by the
orkfinve 2000 repon is simply a continuation of this trend An increasing number of
all new jobs created En Category 3 in the
next decade \ \ ill require a four-year college
degree.
We found no other major change in
skill requirements on the horizon. The
introduction of new technology increaNes job
skill requirements tor some. but lowers skill
requirements for others A computer can be
used both as a tool to expand the informaThere A Stalls Shortage%
tion available to a worker, thereby increasing
responsibilities, or it can be used to remove
responsibility and judgment from a worker
by standardizing procedures and limiting
responses. The latter 'de-skills' jobs, while
the former increases skill requirements. In
our survey we found more examples of deskilling.
What Is The Challenge We Face?
With some exceptions, the educallon and
skill levels of American workers roughly
match the demands of their jobs.
The vast majority of our businesses are
not planning any major reorganization of the
way work is done that would affect this
equilibrium.
Although the demand for college
graduates will probably rise over the decade,
this will not dramatically alter the character
of our labor market, nor create a crisis.
Four-year ,:ollege graduates have been
increasing as a percentage of our workforce
since 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 to
the 30 percent that is likely to be required by
the year 2000.
We will face a challenge similar to that
faced by many Third World countries, to
instill in our youth the attitude and social
manners required for work in an advanced
43
28
industrial nation. Ve will also have to till
selected occupational shortages that emerge.
And, we will have to make provisions for
day care as well as English classes for immigrant workers.
Meeting these challenges will not be
easy. But if we meet them, we will no
longer have a skills gap.
However, simply meeting these challenges will not raise our living standard.
By preparing more Americans for
today's jobs we will, at best, r..rpetuate the
nation's current slow rate of productivity
growth and the incomes of inost American
workers will slide.
But there is an alternative . .
4 4,
29 Is There A Skills Shortage?
By preparke more
American's/or today's jobs
we wilt at best, petpetuate
tbe xenon's curreet slow rate
qfprodectivity growth and
tbe incomes qf most Amerkais
workers will slide. But there
is axe alternative . . .
s
4 5
3
AMERICA'S WORKERS:
DISPOSABLE RESOURCE
OR COMPETITIVE
ADVANTAGE ?
The stories in this chapter are true; the names
of people hair been changed and one of the
plants is described anonymously.
Joe Smith is a Vietnam vet who works
in an electrical control panel plant in the
Midwest.
for the past 15 years..1oe has been
punching holes into the metal sheets that
form the panel casing. Seven or eight
hundred times a day he pulls th: metal
sheets off the conveyor bell, aligns them on
the drill press, activates the drill, watches as
the press comes crashing down, removes the
sheets from the press, wipes away the metal
flashing from around the holes and then
returns the sheets to the conveyor belt.
The monotony is interrupted every so
often when Joe's machine breaks down or
when a problem crops up down the line and
the service people come to fix it. Somefirms, too, the forklift operators deliver the
wrong materials or the set-up people have to
readjust the machines when the plant is
running a new batch.
4 6
i 1
lie
Joe earns about $9 per hour ($13.50
when he gets overtime) plus health insurance and pension benefits. Between his
$25,000 salary and his wife's $15,000 salary
from her job at the bank, his family gets
along pretty well.
Lately, though, Joe has begun to worry.
The company introduced a new kind of
snap-on panel that looks as if it may replace
the one he makes. Joe has noticed that the
new job is not a career job. Most of the
workers are young practically kids and
they earn only $6 per hour. They do not
receive the benefits Joe gets.
Last year, a friend of Joe's lost his job
when the company moved the wire harness
department to Mexico. His friend finally
found a $6-per-hour job as a shopping mall
security guard. Now his friend's family is
having trouble paying the mortgage. At 38-
years-old and with only a high-school
diploma, Joe worries that if he loses his job
he will not fare.any better.
America's U orken
Sam lopresti was assigned to
manage Joe's plant two years
ago because *be plant was
not earning mucb money.
Sam's role was to cut costs
apd turn tbe plant around
He cbose to do tbis by
replacing well paid workers
witb lower paid ones tbrokgb
ouisourcing and by product
redesign to use 1.:ss materials
and labor. So far be bas
saved tbe company $20
million.
4 7
Our wages are five times
higher than those in Taiwan
and Singapore, six times
higher than ix South Korea
and eine times higher than in
Mexico. Increasing6P, fierce
competition has forced
American companies to cut
costs aggressively.
Fmployers are responding to
this pressure in a number of
ways. One way is to move
production to low wage
countries, closing down
American plants and
becoming importers. Another
is to replace workers with
machines. A third is to lower
labor costs by cutting wages
and benefits: replacing higher
paid workers with lower
paid ones.
4 S
Sam Lopresti was assigned to manage
Joe's plant two years ago because the plant
was not earning much money. Sam's role
was to cut costs and turn the plant around.
He chose to do this by replacing well paid
workers with lower paid ones through
outsourcing and by product redesign to use
less materials and labor. So far he has saved
the company $20 million.
For example, Sam found that by mewing
the wire harness assembly department to
Mexico, he could replace workers he was
paying $12 per hour (including benefits)
with dollar-per-hour labor. Within the plant,
Sam's engineers found a way to snap the
panel case together. The proposal was a
double winner. It eliminated the need to
drill holes and bolt the panels together,
saving labor. Moreover, the simple assembly
allowed Sam to hire $6-per-hour temporary
workers to replace the more expensive
career machine operators.
"The panel is too big to move to
Mexico," Sam explains. "But it really bugs
me to pay $12 an hour for people to use
screwdrivers. My 10-year-old son can do
that."
Sam now plans to expand the practice
of snapping on panels. "Well save almost
$1.5 million on that project alone," he says.
"We feel the Japanese breathing down our
necks in this industry; we have to cut costs
or we're history."
Joe will lose his job this year.
.4 awn( a 'A lt orkers
Across our -iation today, millions of
workers face situations similar to Joe's. To
stay competitive, many companies are
increasingly trying to cut the cost of labor.
Why is this happening? There are.
many reasons, but one of the most serious is
increased competition. Our wages are five
times higher than those in Taiwan and
Singapore, six times higher than in South
Korea and nine times higher than in Mexico.
Increasingly, fierce competition has
forced American companies to cut costs
aggressively. Deregulation of service industries like transportation, banking and telecoMmunications has intensified domestic
competition and forced cost cuts. Public
employers have been forced by funding cuts
to adopt stringent efficiency measures as
well.
Employers are responding to this
pressure in a number of ways. One way is.
to move production to low wage countries,
closing down American plants and becoming
importers. Another is to replace workers
with machines. A third is to lower labor
costs by cutting wages and benefits; replacing higher paid workers with lower paid
ones.
American companies have adopted all
three approaches. Some 700 American
companies employ more than 350,000
4 9
32
people in Singapore, Mexico and Taiwan
alone. Many more companies import products to sell under their own brand labels
goods ranging from air conditioners to
microwave ovens and VCRs. Service companies, like retailers and whca-salers that
cannot move offshore, am cutting the benefits of their long-term workers and increasingly resorting to part-time or temporary
labor to keep wages and benefits down.
Public employers are also taking drastic
steps. Some are instituting hiring freezes
and reducing services. Others are using
private contractors who pay lower wages to
perform public services. In order to meet
immediate cash needs, investments in public
infrastructure are being reduced.
The employers instituting these changes
are not nec-:ssarily Scrooges; they are responding to real economic pressures. They
see no other way to survive.
But there is another way.
An Alternative
Six years ago, an IBM circuit hoard factory in
Austin. Texas was in big troubk. Executives
from IBM's personal computel ,,kint complained to top management that the), could
buy the Iloards elsewhere and szive the
company S60 million Wlw should they
continue buying from Austin?
For many companies, s(10 million in
savings would haxe been enough reason
close the plant But IBM has a full employrJ
ment practice that discourages closing plants
and firing workers, so the company gave
Austin a chance to become competitive.
Unlike Sam Lopresti at the control panel
plant, the Austin managers deckled to cut
costs by changing work organization. The
plant had huge indirect costs. For every
direct worker building the circuit boards,
two or three indirect workers were required
to move materials, inspect quality, repair
mistakes, maintain the machines, schedule
and supervise. Despite the efforts of countless supervisors, planners and inspectors, too
many boards were shipped with defects and
costly inventory lay all ar)und the plant.
The IBM managers tackled the problem
by upgrading skills. They organized their
line workers into teams. giving each group
responsibility for its own inspection, repair,
maintenance, material ordering and supervision. They assigned indirect workers to the
teams and gave them direct production tasks.
The ratio of indirect to direct workers was
reduced to less than one-to-one.
The IBM executives also changed job
classifications by reorganizing manufacturing
slots into seven categories (manufacturing
technical associates IMTA's1) based upon skill
reouirements. Workers performance on
competency tests determines their classification. Under the earlier organization tlw
career track for a manufacturing worker
America's Workers
But there is another way . . .
the Austin managers decided
to cut costs kv changing work
organization. The plant bad
huge indirect costs. For
every direct worker building
the circuit boards two or
tbree indirect workers were
required to move materials.
inspect quality, repair
mistakes, maintain the
machines, schednle and
sapervise . . .
They cssigned indirect workers
to the teams and gave them
direct production tasks.
5 1
Old Work Organization
Support
d6666'
Front-line 'Workers
ended after about five years. By contrast,
the new MTA system provides opportunities
for advancement through the fifteenth or
twentieth year, with each level requiring a
higher degree of skill or responsibility.
Vera Sharbonez had worked at the
Austin plant ever since she left high school
in 1969. Her job was to feed circuit boards
into the automatic insertion machine which
rapidly fitted each board with more than -)0
transistors and capacitors. When the madline had completed its work, she pulled the
board out, inspected it for mistakes and put
It in the 'pass' 01 'reject bin. She did this
about 1,200 times a day. Her pay was $10
per hour.
.1nterica S It (wizen.
New Work Organization
§566M
Oe 666bM
When rumors started spreading about
trouble at the plant five years ago, Vera
worried that she might lose her job. Good
johs were scarce in Texas, and she needed
the money she earned at IBM.
Instead, Vera was able to keep her job.
She was assigiied to a new team of production workers. The team included people
from all areas of the plant. They were told
that, in addition to their old tasks, they
would have to learn a range of new skills.
Vera would not only operate the insertion
machine but also set it up at the beginning
of the day and fix it when it broke down.
She and the others would be responsible for
setting their own schedules and they would
take turns leading the team.
5 2 .14
"When the MTA system v int. Aueed,
I was worried." Vera recalls. "I wasn't sure
that I could do the nev; jobs. I thought that
management was just hying to get mc...e
work out of us for the same pay."
To prepare Vera and her co-workers,
!BM launched a maim education and training
initiative for its workforce, some of whom
lacked a high-school education. The planP
now spends more than five percent of total
payrod (not including lost wages) to teach
workers how to maintain machine: y, plan
production, troubleshoot lectronic circuitry
and use computers. In some cases, workers
had to he taught basic reading and math
before they could take the other courses.
Today. Vera's group meets to discuss
the day's work plan each momint;. They
order their own materials from 'he storeroom, they speak with internal suppliers
about materials problems and talk with
customers about quality. The team keeps its
own quality records and helps with decisions
about what equipment to purchase. Vera
still spends 25 percent of her time loading
hoards, but it is only one of the many jobs
she knows how to do.
"I've been working a lot harder the past
few years than before. but its worth it. I
feel like they're treating me like an adult
now. I can make decisions. I am also
learning things that will be useful to me in
all kincis of jobs. If management would give
1... the production goals, I think we could
run the whole plant now!"
35 53
Workers at IBM Austin also help make
investment decisions. Frank Jones and his
co-workers in the lamination area, for t.xample, decided to build a better 'clean
environment. They studied alternate systems, worked with potential vendors, conducted a cost/benefit analysis and helped
design and order the equipment.
Improvements have made the Austin
plant competitive with its rivals. The $60
million gap has been closed. Productivity
has improved by more than 200 percent andquality by five times, and inventory has been
reduced by 40 percent. Despite the improved productivity, no one has been laid
off at the plant (though IBM does have an
early rlirement plan). As the plant has
become more competitive, production has
expanded by 600 percent, a new product is
being introduced and the facility is employing more people than ever before. Management plans to extend the new organization
much further, delegating even broader
responsibilities to the line workers.
Which Choice ?
The managers at IBM Austin and at the
control panel plant were both trying to cut
costs to be more competitive. But the
choices they made were fundamentally
different. While the panel plant achieved 75
percent of its cost improvements by paying
America's Workers
To prepare Vera and her coworkers, 11111 lasenthed a
nagjor esktanstlos and iralaliss
ittliativrikr Stit woripsom
sow qpirbon lethal 1 a MOschool adocatkm Th.pSm
wow spends more tbaafiso
percent of total payroll (not
beanbag lost wages) to teach
workers bow to etaintain
stsachinety, plax Prosktclion,
troubleshoot electronic
arcaitry mut use conqmsters.
54
The managers at IBM Austin
and et tbe control panel plant
were both trying to cut costs
to be more omnpetitive. But
tbe choices they made wet e
fOndamentally different.
While tbe panel plant achieved
75 percent of its cost
improvements by paying
lower wages, IBM Austin
acik eyed more than 90
percent of its improvement
through greater productivity
with no net loss in
employment.
lower wages, IBM Austin achieved more
than 90 percent of its improvement through
greater productivity with no net loss in
employment.
Why didn't Sam Lopresti try a skills
upgrade approach? For him, the choice
seemed too risky. "It would take too much
investment to try to educate the guys we
have here to take more responsibility," he
said. "Many aren't even high-school graduates. I've read about these factories that are
giving power to the workers and expecting
them to act like college. grads. That's academic stuff. It sounds great in the classroom, but it would take years even if you.
could make it work, which I doubt. I don't
have years to turn this place around."
The IBM managers, though dealing with
a similarly educated workforce, did not have
Sam Lopresti's option; the ampany's full
employment practice discourages layoffs. As
IBM's managers note, good quality is hard to
get with a low wage, high turnover philosophy.
From a management point of view,
both approaches worked. Both turned
around unprofitable plants. In the short run,
either choice was a good one. For the
nation, however, the choice has serious
long-term implications. High productivity
work organizations mean the jobs stay at
home. Job security increases, as do wages.
America's Workers 55 36
4
THE ORGANIZATION OF
WORK IN AMERICA
The organization of America's workplaces
today is largely modeled after the manufacturing system made famous by Henry Ford in
the eany 20th century. Frederick Winslow
Taylor ,:onceived the system tt provide an
efficient way to organize mass production
with a large population of low skilled workers. The premise is simple: Break complex
jobs down into a myriad of simple rote tasks,
which the worker then repeats with machine-like efficiency. The system was
designed on the correct assumption for the
early 1900's that educated w orkers would be
hard to find.
The system is managed by a small
group of educated planners and supervisors
who do the thinking for the organization.
plan strategy, implement changes, motivate
w olkers and solve problems. An extensive.
hierarchical supervisory structure and elaborate administrative procedures allow managers to keep control of a large number of
workers.
Most employees under the Taylor
model need not be educated. It is far more
important that they be reliable. steAy and
37 56
willing to follow directions. The managers
do the thinking, technology furnishes the
productivity ach ances and the operators
simply supply grease for the wheel.
The America of the 1950's and 1960's
prospered with the Taylor model. Immigrants arriving at our shores and farmers
migrating to the cities furnished a limitless
supply of low skilled labor. America's vast
domestic market also encouraged capital
investment for mass production. The United
States embraced the system more firmly than
any other country.
This system helped make our nation
rich and, in earlier decades, made the United
States the largest manufacturer with the
largest middle class of any country in the
world. The system stilt determines the way
we organize our schools, our offices, our
banks and our hospitals. And it continues to
define the job expectations of workers like
Joe and Vera, as well as the options that
managers like Sam are willing to consider.
10e Organization Of WOrk In Amerwa
Most employees sender tbe
Taylor model "died not be
educated. It is far more
impulsion tbat tbty be
reliable, steady and wiling
tofollow tliractions. The
managers do tbe Oilskin&
tedmologyfternisbes the
productivity advances. . .
57
As a new century approaches,
however, this old work
organization as becoming less
appropriate for a high wage
nation. High speed
communication and
transportation me. Ise it
possible to produce most
products and wrvices
anywhere in the workL
Modern machinery and
production methods con
tberefore be combined with
low wage workers to drive
costs down.
58
Why Mass Production Is Outdated
As a new century approaches, however, this
old work organization is becoming less
appropriate for a high wage nation. High
speed communication and transportation
make it possible to.produce most products
and services anywhere in the world. Modern machinery and production methods can
therefore be combined with low wage
workers to drive costs down.
High wage nations like the United
States can succeed only by producing higher
quality products, providing customers with
greater product variety, introducing new
products more frequently and creating
automated systems which are more complex
than those that can be operated in low wage
countries.
These lequirements increase production
complexity, making it difficult for a small
group of managers at the center to control
their businesses through administrative
procedures.
Under the Taylor system, niore planners
are needed to develop procedures for new
product introductions; more schedulers are
needed to schedule greater product variety;
more set-up and maintenance people are
needed to handle the automated systems;
and more checkers are needed to check the
checkers already in place to ensure high
quality.
Surrounding the direct-line worker
doing 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 machines; inspecting and reworking faulty
products; receiving, storing and delivering
materials to the line; cleaning up; Tunning
the utilities; producing computer runs of
parts, orders, schedules and performance;
hiring and firing employees; designing
products and prucesses and assuring quality.
In addition, several layers of managers exist
to supervise all of this.
Mass production has become highly
bureaucrati.c and less efficient than it was. An
increasing number of production steps and
indirect processes means more hand-offs of
information, parts and finished products.
This, plus the growing number of dependencies, lengthens production time and causes a
dramatic increase in mistakes.
In back offices of layloristic' insurance
companies, for example, forms are passed
from one worker to another in assembly line
fashion. Functionaries take longer to process forms, make mistakes that must be
corrected and shuffle customers who have
made telephone inquiries from department
to department. Each specialized worker
knows only a single part of the form and has
no authority to solve a customer problem
that goes beyond a narrowly defined area.
As policy options increase, new forms
of risk are insured and computers are .ncreasingly sed to store and process information, work xomes more complex and
38
change becomes a way of life. The number
of tasks to be perforrned increases exponentially, and the tasks change often. To control
all of this, administrative guidelines, work
procedures and indirect functions multiply
until bureaucracy overwhelms efficiency and
quality.
An Alternative: High Performance
Work Organizations
Managers, however, do have another choice.
Across the United States and throughout
high wage countries around the world, some
companies have been adopting a completely
new style of work. The guiding principle of
this new work organization is to reduce
bureaucracy by giving authority to direct
workers for a wider variety of tosks.
Workers are asked to use judgment and
make decisions rather than follow, by rote,
cumbersome procedures spelled out in
detail. Management layers disappear as
front-line workers take over many of the
tasks that others used to do from quality
control to production scheduling. Tasks
formerly performed by dozens of unskilled
individuals ar.. now perfirrmed by fewer
highly skilled people
New forms of work organization apply
in some form to almost every industry. In a
traditional American hank, for example, th..
fun-tions of a teller are usually limited to
accepting deprkits, cashing checks and
recording loan and bill payments. The
position is highly specialized. some tellers
.i9 00
deal with commercial clients, others with
foreign currency transactions, others with
travelers' cheques and still others with small
acccunt customers.
-If a customer has a more complex
transaction, seeks financial advice or is
interested in bank 'prolucts,' the tzller refers
the customer to a back-up depamnent,
staffed in large part by college-educated
customer service representatives. Some
banks have even instituted different groups
of back-up personnel who are organized by
the complexity of the customer issue. The
entire 'front office' system from automatit
teller machines to tellers, from customer
service and sales representatives to loan
officers is organized by operations managers to move customers in and out of the
bank as quickly as possible. It is a highly
'Tayloristic' work design.
Most American banks have a turnover
rate among tellers that averages more than
40 percent a year, and in some branches can
approach 200 percent. Salaries are low,
sorting at about $14,000 annually. Pressure
is high to perform one's duties accurately
and quickly, and advancement is limited.
Training for these jobs consists of four to six
weeks of orientation and practice.
In a number of European banks, such
as Hypo, Dresdner and the Bavarian Bank in
Germany, work k now being reorganized to
The Organizanon qf Work In Amenca
Tbe gadding principk q ftbis
Ism woo* tegaalzatkutts to
reduce bureaucracy by
authority to 4fred wtsrbersihr
a wider variety q /tasks
Maaagnmesa layers sitiappear
asfrattt-ibte workers tabe over
many qf the tasks that others
used to do.
New forms of work
organization apply in SOW
form to almost every industry.
61
In a number of European
banks . . . work is now being
reorganized to assign greater
responsibility to skilled
financial 'clerks'. . . They
handle all tbe functions of the
average American teller, plus
open new accounts, grant
mortgages and loans, process
commercia4 foreign and
consumer transactions,
provide investment advice
and sell stocks and bonds
functions performed by
specialized departments In
traditional American banks.
62
assign greater responsibility to skilled financial 'clerks.' The individuals who fill these
positions are actually viewed as 'front office'
professionals, rather than as tellers. They
handle all the functions of the average
American teller, plus open new accounts,
grant mortgages and loans, process commercial, foreign and consumer transactions,
provide investment advice and sell stocks
and bonds functions peiformed by specialized departments in traditional American
banks.
in some foreign banks, these workers
are assigned their own clients with whom
they build professional relationsh,ps. There
is an emphasis on job rotation, working in
small groups with other bank professionals
and demonstrating some degree of competency in every banking function both in
the 'front' and 'back' offices.
The financial cleik position is regarded
as an official profession for which one must
train for tl ree years in a competitive and
rigorous apprenticeship program beginning
at age 16. Learning does not end with the
apprer ..!ship: a uni) ersity track or an
industr) supported professional banking
academy provides considerable opportunities
for advancement.
The education foundation and the
apprenticeship program that prepare young
people for these professions have been in
existence for decades; now in the face of
increasing global competition in financial
The Otganizahon lThrk ht Amerka
markets, these foreign banks are redesigning
work to take greater advantage of the capabilities of these well-trained employees. To
be sure, not every foreign bank is making
such changes; but the tools, the potential
and the trend is evident.
Work reorganirations like this require
big investments in training. Workers' pay
levels often rise to reflect their greater
qualifications and responsibilities. But the
productivity and quality gains more than
offset the costs to the company of higher
wages and skills development.
Despite these advantages, most American companies still cling to old forms of
work organization. For more than 95 percent of the companies in our survey, the
,:ontrol panel plant's solution is still the
preferred route.
Why Compnies Continue To Make
The Low Wage Choice
Faced as they are with munting foreign and
domestic competitive pressures, why do
most American companies stick with traditional forms of work organization? For many
companies, the costs seem too high and the
benefits still uncertain:
A substantial initial investment is necessary
to shift to a high productivity path. Workers and managers must be retrained.
Unlike capital investment, which is an
employer's to keep, companies risk losing
their training investment if employees
seek work elsewhere.
63 40
Returns on investment from reorganization
may take several years to realize The
perverse short-term financial horizons by
which most American companies operate
present tremendous obstacles to this type
of investment.
The flow of work and responsibilities must
be redesigned. The transition can disrupt
work processes.
Public policy often encourages the low
wage path. Our lack of national commitment to full employment makes it easier
for companies to hire temporary or seasonal workers and lay them off with little
consequence. Our foreign tax credit and
deferral and foreign trade zone legislation
provide incentives for low wage production offshore. Our equal pay law does not
apply to part-time and temporary employ
ces, making it cheaper for employer; to
replace full-time permanent workers with
contingent workers.
American companies that overcome all
the obstacles and decide to pursue high
productivity work organizations run into one
final obstacle that their foreign counterparts
do not have to face: a front-line workforce
that often needs remedial education.
As one financial services manager said
to our study team, "We can pay to give
remedial education to our current workers,
41 64
but we can't afford to regive high-school
educations to all our new hires who are
high-school graduates because they didn't
learn much the first time?
Or as another financial services human
resources director said, "I can do my back
office functions anywhere in the world now.
If I can't get enough 'skilled workers here, I'll
move the skilled jobs out of the country and
just do the customer interface here."
Why Work Organization Is Pivotal
The changes taking place in work organization are key to productivity and quality
improvement, the touchstones of economic
success.
Steam and electricity drove the first two
industrial revolutions, causing profound
changes in work organization which increased productivity, quality and living
standards dramatically. The creation of the
factory in the 1800's and mass production in
the 1900's followed these technology breakthroughs.
The advent of the computer, high speed
communications and universal education are
heralding a third industrial revolution. High
performance work organizations are already
unleashing new advances in productivity. A
greater variety of high quality products and . services are possible with shorter lead times
between new product generations and
between the placing of an order and the
receipt of the product.
The Organization Of Work In America
IMO performance work
nelintazallas are already
sudeasbing stew suivances
productivity. A greater
variety tif NO *ASV
products and services are
possible with theater lead
times betwear new product
generations and between the
placiag qf an order mut tbe
receipt of tbe produa
R5
Work organization cbaages
drive tbe demandfor NO
skills. But :vitbout a skilled
workforce, most companies
will settle into low wage work
organizations.
America implemented the mass production revolution faster than other nations,
even though others the British and Germans primarily had pioneered more of
the enabling technologies. The enabling
technologies for today's new revolution have
been pioneered mainly in the United States,
but this does not guarantee that we will reap
the greatest economic benefits. To do so,
we must also lead the world toward new
high performance work organizations.
Work organization changes drive the
demand for high skills. But without a skilled
workforce, most companies will settle into
low wage work organizations.
As we shall now see, we are not now
providing the education and skills to a
majority of out students and workers which
will be required to support a move to new
high performance work organizations.
C 6
The Organization Of Work In America 42
HOW WE PREPARE OUR
CHILDREN FOR WORK
No nation has produced a highly qualified
technical workforce without first providing
its workers with a strong general education.
America invests little in its front-line workforce. We do not expect much from them in
school. We give them few job skills and
little training. And we let them sink or swim
when they try to get into the workforce.
Yet, these are the very people we must
count on to lead the way to a competitive
and productive economy.
The educational performance of those
students who become front-line workers in
this country is well below the average
performance of their counterparts in some
newly industrializing low wage countries.
Our front-line workers will not be able to
compete in the economic arena because they
are increasingly unable to compete in the
educational arena. They are fast becoming
unemployable at American wage levels.
In our expectations for young people,
the resources that we devote to them and
the rewards for performance that we give
them, our whole system conspires to produce minimal educational effort or achievement among our students who are not
college bound.
43 E 7
80
70
SO
40 0 10 20 30 40 50
% of Student Population Taking the Courses
U. S. Students Anchor The Bottom
On Most International Tests
(Algebra Results For 17-Year-Olds)
Ja Pan
Finland
United Kingdom
eon 11/-1,Sweden Israel 0 tario
New
Zealand
British Scoand Columbia
United States Hungary
Sources Incentives for 1.earl
John H. Bishop
How We Prepare Our Children For Work
America invests little in its
front-line worlebrce. We do
not expect mucbfross tbem
scbool We sive tbakftw Job
skills and *de tfwinksg. And
we let Mem sink or swim
saes tbey try to get into tbe
workprce.
Olsrfrosa-line workers will
not be able to compete i tbe
economk arena because tbey
are &crow** unabk to
compete in tbe educational
arena. They are fast
becoming susemPloYable at
Americas, wage levels.
Our educational system is
almost wholly oriented
toward the needs of the
college bound We provide
very little for the majority of
this nation's youth who do
not go to four-year colleges.
One infive American children
grows up in Third World
surroundings . . . many of
thzse children start out with
severe learning
disadvantages from which
they never recover.
R9
Two Tracks From The Starting line
Beginning in elementary school, students are
sorted and grouped within their classrooms
by ability. In the early grades, these groups
are often given birds names, like 'Bluebirds'
and 'Robins.'
Louis, a 'Bluebird' in a third grade class,
spends the reading hour sounding out words
on a blackboard one by one His teacher
'knows' that his ability is low, so she doesn't
push him hard.
Jim, a 'Robin' in Louis' class, sits by
himself at a desk on the other side of the
room. He and the rest of the 'Robins' are
expected to read a certain number of stories
per week and write mini-reports on their
favorite story.
Seven years later, Louis and Jim no
longer go to the same classes:
In his general math class, Louis is
learning to calculate sales tax on a grocery
bill. For his homework assignment, he is
supnosed to add columns of figures together
and then apply percentages to the total.
Down the hall, Jim has been working
on problems in analytical geometry for the
past hour. Next period, he and his lab
partners will work on the design of a simple
software program to control a toy robot they
are building.
Louis represents nearly half of all highschool students, those who are relegated to
'general curriculum' courses to learn life
survival skills.' It is a path to nowhere for
Louis and the others who go on to become
America's front-line workers.
Jim, k.n the other hand, will go on to
college. There, he will be given the skills,
knowledge and credentials he needs to
direct the front-line workers of this nation.
Studeins who enter the workforce
rather than attend college or post-secondary
vocational-technical training, account for
only about 25 percent of all secondary
school vocational credits. Surprisingly,
students headed for college account for
nearly 48 percent of these vocational credits.
Less than one eighth of general education
students enter a job with any occupationspecific vocational education preparation.
As a result, the 'general curriculum' ends up
providing neither strong academic skills nor
strong vocational skills.
Our educational system is almost
wholly oriented toward the needs of the
college bound. We provide very little for the
majority of this nation's youth who do not
go to four-year colleges. The story starts
early, in the conditions under which many of
mil front-line workers grow up, and the
resources that we provide them while in
school.
Special Problems Of Mc Poor
One in five American children grows ur.
Third World surroundings. Often living in
communities where they are surrounded hy
hunger, violence and drug addiction, many
70
How We Pitpure Our Children For Worle 44
of these children start out with severe learning disadvantages from which they never
recover.
Poor children pose a significant challenge to educators, and their special problems often require extra attention. Schools by
themselves cannot be expected to bring
these children up to world class standards.
Their job is made even more difficult, if not
impossible, by the financing of the system.
Since almost half of the funding for
public education is drawn from local property taxes, the financial system favcrs those
who are most likely to go to college the
children of the economically advantaged.
(In Ohio, for example, poor communities
spend as little as $2500 per pupil while
wealthier areas spend up to $10,000.)
Affluent school districts also benefit
disproportionately from state educitional
funding. State aid is generally based on pupil
attendance. Because dropout rates are lower
in wealthier areas, they end up with more
money for their secondary school age students than do poor districts. Schools with
the largest percentage of disadvantaged
students offer 40 percent fewer vocational
courses and facilities, one third as many
occupational programs, and one half as
many advanced courses as schools with the
smallest percentage of disadvantaged students.
This nation cannot hope to produce a
world class workforce without addressing
these problems.
4 5 71
Expectations And Standards
As a society, we do not seem to expect
much of the students who are not headed
for college.
In fact, the difference between Louis
and Jim lies mainly in the expectations that
the adults in their lives have for them. From
an early age, the adults in Louis' life told him
that he had little academic ability. Believing
it, he did not display any. But everyone
expected 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 to
millions of students every year, especially to
low income and minority students, that we
do not believe they have what it takes to
learn. They then live up to our expectations,
despite evidence that they can meet very
high performance standards under the right
conditions.
Most employers look at the high-school
diploma as evidence of staying power, not of
academic achievement. The vast majority of
them do not even ask to see a transcript.
They realized long ago that it is possible to
graduate from high school in this country
and still be functionally illiterate.
As a result, despite recent attempts to
tighten up graduation requirements in many
states, the non-college bound know that
their performance in high school is likely to
have little or no bearing on the type of
employment they manage to find.
How We Prepare Our Children For Work
. . . we communicate to
millions of students every
year, especially to low
income and minority
students, tbat we do not
believe tbty bave wbat it
takes to learn. They tben live
up to our expectations . . .
. . . tbe non-college bound
know that theirperibrisastat
is, bigb scbool is likely to
bave little or no bearbw on
tbe type qf employment tbey
manage to pod.
7 2
. . typical bigb-scbool
graduates mill about in tbe
kibor market, moving from
one dead-end Job to another
until tbe age of 23 or 24. Then,
with little more in tbe way of
skills than they bad at la
they move into tbe regular
labor market, no match for
tbe bigb0 trained German,
Danish, Swedish or Swiss
youth of .19.
73
The Transition From School To Work
Although the vast majority of our young
people leave high school to go directly to
work, we typically offer them little or no
assistance in this transition.
Few large firms in the United States will
employ students who have just graduated
from high school, preferring to wait until
they have established some sort of track
record elsewhere. Family and friends can
often help middle class youngsters gain their
first chan* .:. in the workplace. But poor and
minority students in the inner cities and
impoverished rural areas rarely have such
help. Cettain they will be rejected out-ofhand hy middle class employers who will
not like the way they talk, dress and behave,
many give up early, both on school and
work.
The result is that typical high-school
graduates mill about in the labor market,
moving from one dead-end job to another
until the age of 23 or 24. Then, with little
more in the way of skills than they had at
18, 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 little
opportunity for the student to build a bridge
to the workplace and gain, while in school,
the values, habits and skills that European
youth naturally acquire through their training
and mentoring during apprenticeship programs. (In America, the apprenticeship
system is not designed or perceived as a
How We Prepare Our Children For Work
school-to-work transition program the
average apprentice in the United States is
older than age 29.)
Some vocational educators are moving
to put more academic substance into their
offerings. Some are creating tt.chnology
curricula that incorporate demanding mathematics and science studies in an approach
that enables students to apply what they are
learning to challenging technological problems. Some 1,500 students are enrolled in
school-to-apprenticeship programs based on
the European model.
Some high schools are pairing up with
community colleges to offer combined
programs that promise a real future to their
vocational graduates. Some business organizations have worked with school districts to
initiate high-school academies that offer
good connections to technical careers in
business. And some elite vocational schools
have always done a good job of preparing
their students for good careers. But these
programs, promising as they are, hardly
constitute a system.
The fact remains that our secondary
schools are not organized to meet the needs
of employers or work-bound students. Even
the vocational education system does a
better job of placing its students in postsecondary educational institutions than
placing them in jobs related to their course
of study. The guidance system is set up to
74 46
help students get into college. Employers
who ask for traiscripts typically find them
very difficult to obtain, but colleges are able
to receive them easily. There is no curriculum to meet the needs of non-college bound
youth, no real employment service for those
who go right to work, few guidance services
for them, no certification of their accomplishment and, as we have mentioned, no rewards in the workplace for hard work in
school.
Dropouts
Currently, more than 20 percent of our
nation's students drop out before completing
high school (the figure is as high as 50
percent in many inner cities). Not only do
we make little effort to help our potential
dropouts in school, but once they do drop
out, our society makes even less of an effort
to recover them. Some dropouts do come
back at their own initiative and expense to
earn their school equivalency certificates, but
only after many years wasted in unproductive employment.
Ironically, schools and governments
reap substantial short-term benefits when a
student drops out. For example, the average
annual per pupil expenditure for a student in
school is approximately $4,300. When a
student drops out, the school's cosis drop.
By comparison, overall spending in
employment and training programs for
dropouts is relatively low. While some
47 7 5
programs have per participant costs equal to
or greater than the per pupil expenditures in
schools, only a small fiaction of the eligible
population is enrolled in these 'second
chance' programs. If the total federal, state
and local funding for 'second chance' programs were applied to all current dropouts,
we would spend the equivalent of only $235
annually per dropout in the nation.
This perverse incentive system essentially allows us to balance our education
budgets on the backs of our school dropouts.
Over the long run, however, we pay.
Our welfare and unemployment systems, obr
prisons, and, ultimately, the national
economy are continually drained by the cost
of sustainmg an uneducated, unproductive
individual in our society.
The Finish Line
We expect very little academic accomplishment from the students who are not in the
academic college bound curriculum; we give
them watered down courses and we provide
them with very few opportunities for participating in effective applied learning programs
or for acquiring relevant, professional-level
qualifications for occupations.
We have no national system capable of
setting high academic ntandards for the
non-college bound or of assessing their
achievement against those standards.
How We Prepare Our Children For Work
Mery is ao curriculum to
meet tbe needs cinotvcoliege
bound youth, ao real
empioymona service fbr those
wbo go Atm to work, few
guidance servicesibr them,
no certfficatioa qf their
accomplishment ast4 as we
&we mentioree4 no meant'
in the workplaceibr bard
work in school
No: only do we make Mak
ebrt to help our potential
dropouts in scboo; but oace
tbey do drop out, our society
makes even less clan Vbrt
to recover them
This perverse incestive
system essentially allows us
to balance our education
budgets on Om backs of our
school dropouts.
7 6
Ourikture depends on
baying blew sktilest bigbly
motivated workers on tbe
front line. Mai is not wbat
our education system was
designed to produce.
We make very little provision for facilitating the school-to-work transition. It is
especially difficult for students who know
few adults to help them gain their first job
or acquire le habits, attitudes and values
that will enable them to keep that job
once they get it. High-school guidance
offices focus their efforts on the students
going off to college, not on those bound
for work.
We do almost nothing to recover our
students who drop out of school
almost one quaiter of all our students
one third of whom will go on to become
our front-line wockforce.
We provide far more financial support for
districts with high proportions of students
who usually attend four-year colleges than
we do for districts serving our future frontline workforce.
America will not be able to choose a
high productivity, high wage future unless it
charts a sharp change of course. Our future
depends on having highly skilled, highly
motivated workers on the front line. That is
not what our education system was designed
to produce.
77
Wow ire. Pnpare Our ChildreU air 4' ( o * 48
6
THE EDUCATION AND
TRAINING OF AMERICA'S
ADULT WORKERS
Each year, American employers spend an
estimated $30 billion on formal training. At
most, however, only one third of this
amount is spent on our non-college educated workforce, affecting no more than
eight percent of our front-line workers. The
occasional training which companies do
provide for these workers is generally limited
to orientation training for new hires or *team
building and motivational training for longterm employees. The one exception is the
ongoing training provkled for skilled craftspeople.
Only a small fraction of firms make a
significant investment in training workers.
According to the American Society for
Training and Development, $27 billion of
that $30 billion was paid out by 15,000
employers (one half of one percent of all
American employers). And, of this small
universe of firms that actually train, only 100
to 200 the larst companies with significant professional and managerial staff
-spend more than two percent of their payroll
on formal training
78
49 The Education And Tmining Of Anwrica 's Adult Workers
Ewa year, Antericaa
employers *end ass
estimated $30 Names
Armed training .. 427 billow
qf tbM .190 bon was paid
oat by 11000 employers (owe
bat/Vase pstreW qf all
American emptoyers).
79
We tbus devote aboost all of
our educational resources to
tbe first 15 to 20 years of life.
We assume tbat little learning
will be required during tbe
subsequent 40 to 50 years of
working life, especially for
front-line workers.
s o
The $30 billion spent by companies on
training represents less than 10 percent of the
nation's annual public education budget. We
thus devote almost all of our educational
resources to the first 15 to 20 years of life.
We assume that little learning will be required
during the subsequent 40 to 50 years of
working life, especially for front-line workers.
Apprentices are part of the small minority of front-line workers who benefit from
extensive, long-term training. These are
skilled workers construction tradespeople,
operating engineers and tool and die makers.
The apprenticeship system usually
combines paid work with classroom and
workplace instruction. Training is systematic.
Clear industry established standards and
regular performance assessments lead to
nationally recognized certification.
National industry based networks of
unions and employers often help design the
curricula and provide the locally administered
programs with an infrastructure of support.
Federal and state education funds support
buildings and the cost of instructors.
Apprenticeship programs sponsored by
unions and companies provide coherent
training to develop the skills of adult workers.
Though worthwhile programs, they serve less
than 300,000 people at any given time less
than three tenths of one percent of our
workforce.
The Education And Training Of America's Adult Wothers
The fact that employers in this country
do not spend much money on training of
front-line workers is not surprising. The
'Taylor' model of work organization still
followed by most of our companies does not
require skills from the vast majority of their
workers.
Americans have traditionally relied on
the marketplace to determine how much
educational preparation is necessary for
work. We assume that companies will train
their workers if it makes business sense, and
that individuats will seek training if they feel
it will improve their career prospects. However, most employers require little in the
way of skills for most workers, so market
demand for training is weak. And, information critical to efficient market functioning
about the quality of training programs is
largely unavailable. The result is relatively
little training for the average worker.
Foundations For Public lAbor Market
Policy
Modern public labor market policy in
America has its origins in the Great Depression. The Federal and state governments
created the Unemployment Insurance system
(UD to provide temporary economic assistance to laid off workers. To help these
workers, a national network of local offices
was developed through a state administered
employment service system.
8 1
50
To protect workers, the government
established minimum wage laws, pension
and insurance benefits standards, health and
safety laws and child labor guidelines.
Federal ground rules for labor and management relations were also set. The employment service network was originally used by
the Federal government to link income
maintenance, job search and training together, but that assignment has eroded over
time.
While skills development has never
been a central focus of American labor
market policy, a whole series of programs
has grown on the periphery. Education,
social and economic development policy
initiatives have come to incorporate training
as part of their missions. What we are left
with is a complex and fragmented network
of adult training efforts.
Education Initiatives
Though they were not designed to do so,
state supported community colleges and
federal Pell Grants and Guaranteed Student
Loans have had a major impact on adult
vocational training. More and more, public
and proprietary educational institutions are
becoming contract training providers to
private employers and to public agencies.
In 1947, the Truman report identified
the need for a community college system.
Originally conceived as 'stepping stones to
four-year colleges, community colleges are
now used primarily by recent high-school
5/ 8 2
graduates and adults for vocationally related
training. Today, over 1,200 community
colleges annually serve five million people in
degree programs and another 4.5 million in
non-credit courses, and their consume $12
billion in state funds. More than two thirds
of the classesthey provide today are for
adult vocational education.
For adults who seek to upgrade their
skills, the accessibility and flexible scheduling policies of community colleges make
these institutions appealing. These characteristics also encourage sporadic course
taking rather than the pursuit of degrees,
however, and dropout rates are high.
In addition, the lack of standards
sometimes makes it difficult for students to
transfer courses to other institutions or for
employers to recognize the value of qualifications.
According to the National Assessment
of Vocational Education, only 19 percent of a
group of recent hi0-school graduates who
entered post-secondary education completed
a bachelor's (11.2 percent) or an associate's
(5.9 percent) degree or a certificate (1.9
percent) within four years. The assessment
highlighted the need "to help students
choose a field of study, construct a coherent
sequence of courses in that field, complete
the course or program and fmd a related
job."
The Educuuon And Tmuung Of America's Adult Workers
Wolk Wes tlevelopmeat bas
never been amaraljbass qf
Americas labor marbet
polk a whole swim qf
~wow ba snmetaitlise
peripbery. Iblacatko4 *WM
and economic elemblaNWN
policy lablatives bast come
to incorporate by*** as
part qf their minion& Mae
we are ittfl wib is a complex
ameljhapaleled moor*qf
admit training arms
Tbe federsal and state training
programs for dislocated and
disadvantaged workers are
well-intentione4 and some of
tbem do au extraordinary
Job. However, because tbe
programs are designed
exclusively to aid tbe
disadvantaged and
dislocated populations,
benefits are marginal in tbe
labor Market and
participants are stigmatized.
IR 4
Pell Grants and Guaranteed Student
Loan programs were introduced to give poor
and working class children the means to
attend college. These programs helped to
create a major industry of private proprietary
schools, while at the same time fueling the
community college system. Over 85 percent
of students attending proprietary schools are
funded by this public money.
For employers, community colleges and
proprietary schools are natural training
providers. With large teaching staffs and
extensive course material, these institutions
can tailor programs to a client's needs. For
the institutions themselves, the extra money
that comes in the form of tuition and fees
make this an attractive pursuit.
Social Policy
Just as education policy has spawned a vast
network of training institutions for workers,
our social policies have also created a series
'cif **anti Id train poor people. , Lyndon
Johnson's War on Poverty created a variety
of targeted programs that eventually focused
almost all of the Federal government's
attention on short-term training programs for
the economically disadvantaged. Several
name changes have occurred since the
1960's, but not the type of training. Eventually, the Joh Training Partnership Act (JTPA)
became the umbrella.
Today, the Federal government spends
roughly $5.7 billion annually on 13 major
employment and training programs, two
thirds of which is allocated to the 'TPA.
JTPA has four major components
training assistance for economically disadvantaged youth and adults (Tide HA), the
Summer Youth Employment and Training
Program (Title IIB), the Job Corps and the
dislocated worker programs aide ED. Each
JTPA program has specific eligibility requirements, but individuals can qualify for more
than one program.
Other JTPA programs provide employment and training assistance for dislocated
workers, and for other target groups such as
Indians, Native Alaskans, Hawaiians and
migrant and seasonal workers.
While JTPA is the largest, several other
federal training programs exist. Each targets
a special 'needs' population. Among these
populations are senior citizens, refugees and
those on welfare or needing vocational
rehabilitation or food stamp assiStance.
A number of states have Cieated social, ,
programs for the economically disadvantaged to supplement federal effons.
The federal and state training programs
for dislocated and disadvantaged workers are
well-intentioned, and some of them do an
extraordinary job. However, because the
programs are designed exclusively to aid the
disadvantaged and dislocated populations,
benefits are marginal in the labor market and
participants are stigmatized.
R 5
The Education And Training Of America's Adult Worker's 52
Due to limited funds, and their dispersion among such a large number of constituencies, these programs reach only a small
portion of poor people in the country and
provide only limited training assistance.
Economk Development Inidatives
Most states have created a variety of programs to attract industry. They provide low
cost construction financing, subsidized land,
infrastructural subsidies and a wariety of
services to entice firms to locate in their
state.
Assistance with finding good job applicants and giving them training to make them
job-ready has now become part of the
service package offered by most states to
companies they are seeking to attract. North
Carolina was the first, in 1957, using state
public education facilities, to provide 'customized training tailored to meet the needs
of new companies coming into the state.
Other Southern states adopted the idea as a
way to convince companies in the North that
the'SOUthern labOr Supply; though not
industrially experienced, could be brought
up to a high standard. These programs
proliferated throughout the country.
In the late 1970s. firms that were
already established in particular states began
to complain that most new jobs resulted
from expansion of existing firms, not from
the arrival of new companies. They asked
R 6
5,3
state governments to spend more time and
money on them, rather than 'chasing smokestacks' in other states. This led to an extension of many state training programs for
growing local companies.
States added retention of finns to the
list of economk development efforts during
the recession of the 1990's a time when
few companies were expanding. Companies
in some states became eligible for training
funds to upgrade skills so that they would
remain in a state.
States now spend almost $1 billion a
year to train workers for new jobs and to
upgrade the skills of those already in the
workfon.... The training is usually of shott
duration, though in some cases it helps
companies significantly upgrade skills of
selected groups of line workers. Some of
these state programs also help fill specific
skill shortages, such as data processing.
The Current Adult Training and
Employment 'System'
Thc petwork ,of public, training activities in
the country has thus been Created' aS a reStik
of unrelated educational, social and economic development goals rather than from
any overall vision of human resource development. These variow and qften unintended origins of our adult training and
employment `system' have created a bewildering array of services, programs and
providers.
71e Education And Training Of America 's Adult Workers
neinutit qf pubic
buitting nctieltim Mae
coutm7 bait tbawironn ~al
as a ran* of mwolnied
m l a c t i t i m m t wad and
economic titeelopmen t goals
ranter tbassfrom nayiteetriU
vision qf boon= remove
development. The e various
and Oen maintended origins
(Wow. adult imbibe tend
employment vs tette tam
created a bewildering array
qf services, programs and
providers.
,
At tbe local labor market
level . . . Lack qf iscformation
ow provision, price and
quality continually frustrates
tbe quints cej employers,
agency qfficials and
customers to mwigate the
system
Tbe result is a crazy quilt of
competing and overlapping
policies and programs, with
no coherent system of
standardization or
iifformation exchange
services on which various
providers and agencies can
rely.
In Michigan, for example, $800 million
in combined annual state and federal funds
are scattered across 70 sejittatetraining and
education funding programs, administered_
by nine different departments of state government, and ofkred by innumerable local
providers. In New York, 19 different units of
state government distribute $725 million in
iob training services through more than 85
different programs. At the local labor market
level, where people seek training and employers seek workers, the picture is blurred.
Lack of information on provision, price and
quality continually frustrates the efforts of
employers, agency officials and customers to
navigate the system.
Employers, government agencies and
post-secondary institutions use skills classifications to plan and manage their human
resmice programs. But trying to define the
skill content of jobs is often an impossible
task. The maze of classification systems
attests to this:
Seven different classification systems are
used by various federal agencies and three
others by the armed services. The United
States Department of Labor's Dictionary of
Occupational Titles, one ot theii systeitis;
lists some 12,000 classifications.
More than 500 national and regional
private groups set standards for selected
jobs.
The Education And Duining Of America's Adult Workers
The United States Department of labor's
apprenticeship program alone utilizes 97
separate industry committees to set standards for some 384 occupations.
The result is crazy quilt of-competing--
and overlapping policies and plograms, with
no coherent system or standardization Of
information exchange services on which
various providers and agencies can rely.
How has the system become ad complex? A recent Michigan task force rept*
described the evolution of the mansion
over the 30 years of government salvity in*
employment and training as follow&
"Most new programs . . . are brought
forth with little attention paid to-their predecessors. Often the legislation creating
programs imposes spedfic definitions, rules
and administrative procedures for expenditures; only rarely are these dovetaikd with
existing programs. The end result is often _ policy incoherence, administrative confusion
and service delivery fragmentation.*
The product of this ad hoc approach to
training policy development is the treation
of a maze of subsystems that are often
incomprehensible to those who seek to use
theM it a locallabor market leveL. .. Reform Efforts
There have been reform efforts over the past
decade, but the reform agenda is almost as
fragmented as the current adult training . 89 3 1
efforts themselves. Initiatives over the last
decade include:
Increased private sector involvement
through Private Industry Councils. Business leaders, elected officials and community and education leaders share responsibility for managing Programs for the
disadvantaged. However, because of
limited funding, these programs reach
only a fraction of those eligible.
Greater emphasis on basic skills for welfare clients. Although well-intentioned.
itSe fedetakind state programs aimed.at
skills upgrading stress iob placement
rather than karning gain. ks a result.
participants often receive brief training
and may only be eligible for low skill, low
paying jobs.
Setting performance standards. Some
states have called for common performance standards and a central o; ersight
board to collect client and labor market
information, monitor performance and
influence funding.
Greater use of outcome measures. To
ensure accountabilit, !,,me states are
beginning to use outcome measures rather
than procedural requirements. Instead of
job placements or graduation rates, demonstrated competencies are the benchmark.
55 90
l'hese ongoing reform effiarts have been
hampered by a lack of common skills classifications that makes it nearly impossible to
compare programs. Lack of agreement on
how to define levels of skill mastery makes it
very difficult to establish workable outcome
standards. In addition, most efforts have
been narrowly focused on transitional
training programs for the disadvantaged
rather than on building a single comprehensible system to meet the training needs of
employers as well. The public and private
collaboration necessary to make the market
FM' tmining,operatv 4Fctive1y,for all noncollege people has been largely
particular, the Job Service, at the heart of the
information exchange and iob-and-training
connection in other nations, has been allowed to atrophy in many American communities.
Summary: The Current Situation
Past-secondary training and education for
the United States workforce appears to be a
coliectiot of bureaucratic subsystems rather
than an effective system addressing needs of
employees and employers at the community
level.
Most of America's public training
programs were intended to me-t a series of
narrowly defined needs that were often
unrelated to one another. They were never
intended to coastitute a coherent, unified
skill development system for America's frontThe Education And Training Of A .wrica's Adult Workers
k No Effective system exists at
tbe locsgleveljitr maictsimg
employer oerdis 'oath vewdley ,
'aealbsY I I development:
programs.
91
The lack of standardization
across tbe system makes it
dfficult for workers to
combine courses ix a logical
sequence of advancement
toward bigber skilled work
k,
2
,.
line workers. No effective system exists at
the local level for matching employer needs
with readily available skill development
programs. The lack of standardization across
the system makes it difficult for workers to
combine courses in a logical sequence of
advancement toward higher skilled work.
Most workers receive no education or
training beyond high school. The vast
maiority who do receive training take occasional courses that are not tied to any industry standards because such standards do not
exist in the United States. Others receive
some training because they are economically
disadvantaged or have been dislocated from
jobs. This training is usually of short duration and touches only a small number of
those Wildi*ed A. , "e "e "e "e ,J
A New improved System For The
Future
After the turn of the century, when the
second industrial revolution spawned the
mass production system, American industry
pressured Congress to enact the SmithHughes Act, which created the American
system for vocational education. This system
prepared American students to work with
the new machinery and in the new work
systems being created. It worked well for
many over time, but it has not been able to
keep pace with the more rapid changes in
the work place of today.
Me Education And Training Of America's Adult Woileeis
If this Commission is right, we are
embarking on a third industrial revolution.
This revolution will usher in new high
performance work organizations that have
higher skill requirements than exist loday.
Our current adult training policies are
ill-equipped to meet this challenge. A
comprehensive employment and training
policy will be required to do for this revolution in work organization what the Vocational Education Act aimed to do for the last
revolution.
The change to high performance work
organization, and thus the increase in the
demand for skilled workers, is largely in thx
hands of employers who must decide which
route to take.
and Ein,effective okarkgtfP,r,Jrining will
The increased supply of,
require new institutions and pubhc-pnvate
sharing of responsibility. As we shall see in
the next chapter, our major competitors
already have such systems in place.
P 3 56
VOICES FROM ABROAD
hoJapast, we value ail (lour workers.
We pay oar assembly worlter tbe same
as our engineer, and we provide him
with tbe same amount qf training
Amerka is now more a comity qf
econostk hierarchy tbaaJapam.
apanese plant manager
America is not the only nation trying to
maintain high living standards while
competing with low wage nations. Germany, Japan, Sweden, Denmark and other
advanced industrial countries with high
,,AAgeskites,face,the same challenge. Here,
however, the simirakritY: ShipS-. 'While- -
America has had a negative trade balance
of more than $100 billion annually for the
pas: six years. Germany and Japan hme
enjoyed highly positive balances.
Sweden's and Denmark's trade balances
have been al)out even.
Each of these nations has maintained
higher rates of productivity growth than
the United States, and their living standards
and real wages have been rising steadily.
Pay differentials between the college
57 4 1
-1
-1
Other Nations Pay High Wages
And SdR maatain
A Pc Adve Wade Wince
00_8111.03
SO
00
an
461.434
Bla66.112 w
in
0332
Minim?
Teadelialattcc, k . ,k. \ ,', \./ \/ \ ,\., \ , e Averagewages Hour4r -r,132.941 i \
Five Year Average Trade balance and Average Hourly Wage for Production Workers in Selected Countries
Sources: Bureau of Labor Statistics
international Monetary Fund
Voices From Abroad
%.
k. \d k.
9 5
These nations, while sociallY
and culturally distinct, share
a strong commitment to
maintaining a bigb skilL bigb
wage economy for all of their
people.
Implementation varies widely
in eacb of tbese countries.
But eacb maintains coherent,
highly systematic structures
to stimulate both the supply
of and the demand for highly
skilled workers.
, -
9 6
educated and non-college educated are
narrower, and the distribution of income is
less 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
6.2
6.8
United
States
pe *Pan s an
NIC's*
Annual Growth in Compensation
for Production Shrkers in Selected Countries
1975-1988
N.- The Acifly*Opstilalized Countries of
Singapore, 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 culturally
distinct, share a strong commitment to
maintaining a high skill, high wage economy
for all of their people. They also agree on
certain fundamental principles concerning
how to achieve this goal:
Academic expectations are high for all
young people. Both college bound and
non-college bound students attain high
standards of educational achievement.
Well developed school-to-work transition
programs prov.de young people with
solid, recognized occupational skills.
The skills of front-line workers are highly
valued. Companies and governments are
committed to providing lifelong training
and employment opportunities to the
average worker.
Public labor market agencies provide
valuable training, information and placement services for all workers.
Government, business and the general
society agree on the need to actively
promote adoption of high performance
work organizations.
Implementation varies widely in each br -
these countries. But each maintains coherent, highly systematic structures to stimulate
both the supply of and the demand for
highly skilled workers.
9 7
58
Basic Education
Every country we visited requires and makes
an effort to ensure tha; its young people
obtain bask proficiency in educational fundamentals (language, mathematics, geography,
history, science and the arts).
Equal access to a quality education is
critical for success. Disadvantaged areas
(such as northern Sweden) and districts with
problem populations get the most funds for
education. National curricula and nationally
or regionally standardized testing systems
help set standards and reduce the variation in
quality among schools. In Sweden, Denmark
and Japan, students of mixed ability are
generally kept in the same classcs until they
choose a career path at age 16. Tracking is
uncommon.
The underlying assumption in all of
thest countries is that every student can be
educated to be a productive worker in a high
wage, high skill society.
Society makes it hard for students to fail.
In Japan, students who fall behind are required to spend extra time on weekends.
evenings and during vacations to catch up.
In Sweden, students who drop out are pursued and strongly encouraged to study in
alternative learning environments attached to
local youth centers. In Germany. remedial
education is provided in apprenticeship
programs to ensure mastery of basic learning
skills.
59 PS
School-To-Work Transition
Extensive occupational preparation programs, combining general education with
worksite training, provide foreign employers
with high skilled, work ready youth and
offer young people a smooth trans;tion from
school to working life.
In most of the countries we studied,
schools begin early to prepare young people
for working life. Students in Denmark,
Germany and Sweden begin.learning about
occupations in the seventh grade from local
employers and labor market representatives
who visit the schools. Swedish children
make field trips to workplaces and are
required to complete 10 weeks of summer
employment by age 16.
After they finish compulsory school at
age 15 or 16, the majority of young people
in Germany, Sweden and Denmark enter a
two- to four-year professional program to
prepare them for working life. In Germany,
young people enter one of 380 formal
apprenticeship programs and receive training
in a company four days a week. In Sweden
and Denmark, most of the instruction is
provided in school, but students also participate in workplace training. Most of the
The important structural change for
industry is in tbe mind, It's training
not macbinety.
Swedish CEO
Voices From Abroad
The underlying assumption in
ail Outs countries is tba
evety student ass be educated
to be a praise:Sim worker in a
high wage, high sltillsociety.
Extensive occupational
preparatior programs,
combistktg general education
with works** training,
provide fbreign employers
with high skilled work ready
youth and offer young people
a smiWb-freussitionfrom
schoolto working life.
Ver they finish compulsory
scbool at age 15 or 14 tbe
majority of young people in
Germany, Sweden and
Denmark enter a two- to
four-year professional
program to prepare tbemfor
working l(fe.
t )
9
Repres;entatives from
refer's', industry councils
and unions design national
stamiards for the programs,
c:ert#0 training providers,
assess petformance and
certe completion.
Employers, knowing that
students who graduate from
tbe system bare the skills
they seek, are glad to hire
them. Students, seeing a
direct relationship between
school and work, are
motivated to karn
100
programs are designed, if combined with the
appropriate general education courses, to
allow the student to continue on to college
or a variety of higher technical and commercial programs.
Unlike tbe United States, Germany bas
no natural resoenves. Our main capital
is busman capitaL Maintaissitg a blgb
standard tiquality in our laboribrce
guarantees our social welfare. On tbis
point everyone is agreed
Minister of Culture, Bavaria
Whether the training is provided mainly
in the workplace or in the school, a common
thread runs throughout the European workforce training systems:
Study is provided in a wide range of
occupatioas across industries, from auto
repair and construction to food service
and banking.
Education generally combines school and
work based learning and participants
spend a certain portion of their studies
training on the job.
Companies and unions provide workplace
training and maintain strong connections
with the schools. Some firms in Sweden
and Germany have even set up their own
schools to attract highly qualified prospective job applicants.
Voices From Abroad
Representatives from relevant industry
councils and unions design national
standards for the programs, certify training
providers, assess performance and certify
completion.
Students are assessed in performance
based and written eximinationi. 'Those
who meet the standards set by industry
are recognized as skilled workers in the
trade.
Employers, knowing that students who
graduate from the system have the skills they
seek, are glad to hire them. Students, seeing
a direct relationship between school and
work, are motivated to learn.
Unlike these central European systems,
the Japanese emphasize general education.
Although vocatkinal schools are available to
Japanese students, the maiority complete
high school in general education programs.
Many companies hire for life, and Japanese
employers, as a result, tend to place greater
emphasis on a student's general learning
ability and performance in school. Specific
joh related skills are provided by the company throughout the individual's working
life.
Subsuntial orientation training, which
may last for years, replaces the apprenticeship systems which exist in Europe. Virtually all Japanese students are handed over
101
60
from a school 'family' to a work 'family' in a
seamless transition requiring little external
assistance.
We bewe natural resources; no mill- tar. y power. We have only one resource
dm inventive capacity q four brain& ft
bas no limits. We moist make use qf
We most abscat4 Ira* equip. In tbe
nearfktum this metnal power wilt
become tbe most creative common roost
qf at humanity.
Head, Japanese Federation of
Economic Organizations
(Keidranmn)
The labor Market System
All four countries maintain comprehensive
public labor market systems to assist adult
workers in finding appropriate training and
employment.
In contrast to the United States, where
public training and job information programs
only serve a limited population, the systems
abroad reach the majority. The foreign labor
market services are carefully integrated,
providing a 'one stop shop' for training and
employment needs: employment placement,
training and income maintenance for the
unemployed and the exchange of labor
market information. The systems are extremely well funded and play a critical role
in their nation's overall economic strategies.
61 102
The labor market seivices are generally
integrated under a single agency (or two
related agencies, in the case of Sweden) and
governed by a tripartite board of government, company and union representatives.
The labor market service is funded either
through the unemployment insurance system
(Germany and Japan) or a special payroll tax
(Sweden and Denmark).
Unemployment insurance systems in
these countries are often coordinated with
training programs. Typically, unemployment
insurance is paid only as a stipend to those
in training or, as a last resort, after training
has taken place. In some cases, the training
may be provided directly by a government
training center, as in Sweden and Denmark,
or the agency may pay for training offered
by a private provider, as in Germany.
While in full-time training, workers are
provided with the equivalent of the normal
unemployment benefit to support themselves. Training is high quality and long
term. For dislocated workers who are
changing occupations, this may mean receiving training for two years or more.
A crucial responsibility of the public
labor market agencies is to gather and
disseminate information about the status of
the labor market. Germany, Sweden, Denmark and japan all employ elaborate market
information services to guide policy and
Vokes From Abroad
atitlbotr canaries maistain
catypreheasim pails beer
mirk* spasm teassist
WON*
appreprille traislugamt
empleyinent.
. . . tb. systems &lamed reads
sbernmilarii;---7111efbreigirlabor searlost services are
carfyidly inagratesg
providiag a 'one stop shop'
Jar :minim and employment
needs.
103
Leading foreign firms spend
up to six percent of payroll
on training and devote a
significant share of their
effort to their front-line
workers.
1n4
direct their more active programs. Typically,
the information service gathers data (-41
employers needs in local labor markets. the
skills which are available, and areas with
surpluses and shortages. This informatio ,
then used by the service to determine what
types of training t Irovide and to match
unemployed workers to available jobs.
Company Training
Leading foreign firms spend up to six percent of payroll on training and devote a
significant share of their effort to their frontline workers. Large German companies
provide their workers with a wide range of
free courses, either at company training
centers or at outside institutions. Small
German businesses pool their resources and
operate external training centers through
industry associations or local Chambers of
Commerce. Japanese companies focus on
shop floor training through formalized job
rotation and instruction programs.
Government promotes in-company
training to varying degrees in each k ,' t ;e
countries. In Denmark, where the economy
is dominated by small businesses, the government often provides training to companies free of charge. Sweden's national
training centers and 'renewal funds' encourage companies to train. Companies are
required to contribute a certain percentage
of their payroll to the funds, but may later
withdraw the money to finance training
approved by the government and unions.
t cute% troy. ' ' 'n VS
I've toured a member qf educational
systems in Europe and tbe United
States. Tbe biggest question is always
bow to convince companies to *end tbe
money on wafting. Ii Germany, ibis is
not questioned Everyone does it, and
everyone knows bow &spotlit* 1 _it is for
"Made in Germany."
German training directbr
Similar principles guide Singapore's Skills
Development Fund and the Irish Levy-Grant
system.
Organization Of Work
European and Japanese companies in most
industries are further advanced than American companies in the development of high
productivity forms of work organization.
The leading firms, particularly those in
manufacturing and retail, have now been
experimenting with rew processes and work
cultures for a decade or more.
Swedish and Danish firms are perhaps
the most advanc,--i in adopting cooperative
forms of work organization. Today, companies across many industries are using selfdirected multi-skilled teams, expanding the
skill content of jot, providing continuing
training and empowering workers to make
day-to-day decisions. Workers are also
consulted on all major investment and work
organization decisions.
1e5 62
It used to take 700 people putting their
bands on to build a single car. Now it
takes 21A
tidy() executilv
German work practices emphasize
individual worker autonomy and the mastery
of high level skills. Workers help plan the
work organization and are consulted on
major work related investments and plans.
Japanese firms stress collective worker
participation in shop floor decisions, though
in a paternalistic fashion. Broad based job
rotation is commonplace. and managers
spend most of their time on the shop floor.
Japan has virtually abc)lished the hourly
wage versus salary distinction and bases
compensation for almost all employees on
We've tried to build a system wbicb
allows tbe people to control tbe materials, not vice versa.
Former l'oh'o execultt'e
seniority. (Shop floor employees with levels
of seniority comparable to the professional
workforce may r. m as much as salesmen
and engineers.)
Particular work organization models
vary by country, but the outcome is the
same: greater responsibility and earning
power for the average worker.
Why Are Foreign Companies
Choosing High Skills?
Foreign managers do not adopt new forms
of work organization because they are more
altruistic or more far-sighted than American
firms. Most foreign companies choose high
productivity models in response to a variety
of external and labor inalket pressures.
National full employment policies, tight
labor markets, government lal)or regulations,
strong union movements, high wages and a
highly skilled workforce all provide incentives for foreign employers to choose the
high productivity path.
In Japan, Sweden and Singapore,
official public commitments to full employment limit the ability of employers to lay off
workers. These polics create a tight labor
market, making it difficult for employers to
attract new employees. Broader job definitions. attractive career paths and better work
conditions can give them an edge in hiring.
In Sweden, Denmark and Germany,
companies are required by law to consult
with unions before they can lay off workers.
Throughout Europe, requirements of timely
notice and severance pay strongly discourage layoffs. Employers therefore have strong
incentives to invest in their workers and
provide training and good career tracks.
6 I t olCCN HIM1 Abroad
European and Japanesecompanies in most industries
are Anther advanced than
American companies ii, tbe
development qf bigb
productivity forms qf work
organization Partkular
work ortganization models
vary by country, but tbe
outcome is tbe same: greater
responsibility and earning
power for the average
worker.
1n7
. . . the higher education and
skill levels offoreign workers
make it both nes7essary and
possible for foreign
companies to adopt new
forms of work organization.
But higher education levels
also mean that workers are
less willing to tolerate
traditional forms of work
1n8
Other Nations Invest More
In Employment And Training Policies
Finlaib
German
Canad
Australl
Austri
Unite
S$atc
Norwa
_
1.1
7
3.4
4.8
2.6
2.3
Sil II=11 3.0
1.7
Ii 2.5
DIUI 0.3 xi
i 0.2 ming
1 0 . . ,. i 0 Active
. . sire
Costs
. 1 4 0.7 Costs
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, active mainly training and Job counseling
Source: Swedish Labor Board
High wage levels, due in part to union
pressure and national income policies, also
force companies to achieve higher levels of
productivity either through increased training
or new forms of work organization.
()it e.s tr)ll/ . brrmld
Finally, the higher education and skill
levels of foreign workers make it both necessary and possible for foreign companies to
adopt new forms of work organization.
Strong occupational preparation allows
workers to handle more complex work
as.signments and greater front-line responsibilities. But higher education levels also
mean that workers are less willing to tolerate
traditional forms of work.
Swedish education reforms in the 1960's
that drastically raised education requirements
also precipitated high rates of absenteeism ir
Swedish factories. Young workers, bored by
traditional factory work, opted to stay at
home. This caused manufacturing employers,
in particular, to reorganize work in order to
increase job content, with the aim of attracting workers.
Them And Us
While these nations differ in economy and
culture, they share an approach to the education and training of their workers and to high
productivity work organization that we lack:
They insist that virtually all of their students
reach a high educational standard. We
do not.
They provide 'professionalized' education
to non-college educated workers to
prepare them for their trades and to ease
their school-to-work transition. We do not.
64
This is the reason for the great expansion ofilirther education in Germany
right now. Germany is fighting to bold a
quality edge over countries like Korea
and japan not so much with tbe
United States. The problem with tbe
United States is that there are too many
people in college and not enough qualified workers. The United States bas
outstanding universities, but it is missing its middle. Too mucb training takes
place on the job, and therefore is too
unsystematic
German executrix,
They operate comprehensive labor market
systems which combine training,
labor market information, job search and
income maintenance for the unemployed.
We do not.
They support company based training
through financing sche.nes based on
general revenue or payroll tax. We do
not.
They have national consensus on the
importance of moving to high productivity
forms of work organization and building
high %%age economies. We do not.
65 110
America stands out among advanced
nations as having a unique set of approaches
to education, training, school-to-work transition and overall labor market policy.
Our approaches have served us well in
the past. They will not serve us well in the
future.
Voices From Abniad
America stands oat amen
advauted nations as having a
unitise :get of approaches to
education, trataivg, schoot-towork transition and overall
labor market policy. Our
approaches have served us
well in tbe past. They will not
serve us well in the jkture.
111
8
THE CHOICE
Americans are unwittingly making a choice.
It is a choice that most of us would probably
not make were we aware of its consequences. Yet every day, that choice is
becoming more difficult to reverse. It is a
choice which undermines the American
dream of economic opportunity for all. It is
a choice that will lead to 'in America where
30 percent of our two* may do well at
least for a while but the other 70 percent
will see their dreams slip away.
The choice that America faces is a
choice between high skills and low w ages.
Gradually, silently. w e are choosing low
wages.
The choice is being made by companies
that cut wages to remain competitive. It is
being made by public officials who fail to
prepare our children to be productive
workers. Ultimately, we are all making the
choice by silently accepting this course.
We still have tinle to make the other
choice one that will lead us to a more
prosperous future a choice for high skills,
112
not low wages. To make this choice, we
must fundamentally change our approach to
work and education:
Today, we demand too little of those
students not headed for college.
Tomorrow, we must demand high performance from all students, even those not
going on to college.
Today, we shrug our shoulders as over 20
percent of our students more than 50
pe-cent in the inner cities drop out of
schools.
Tomorrow, we must ensure that all young
people get the education they need to
succeed.
Today, we blame schools for not providing
the type of workers employers want, yet
employers are rarely involved in student's
education and training.
Tomorrow, we must share responsibility
with the schools for defining standards of
professional competence and take the
lead in helping students cross the bridge
from school to work.
Me Choice
, 1., 11-
The choice that America faces
is a choice between high
skills and low wages.
Gradually, silently, we are
choosing low wages.
The choice is being
made by companies tbat cut
wages to remain competitive.
It is being made by pub&
officials who fail to prepare
our children to be productive
workers. Illtimate&, we are
all making the choice by
silent& accepting this course.
We still have time to make the
other choice . . . a choice for
big!, skills, not low wages.
1 1 3
We will be successful if our
work kindles a debate that
leads to acti,m, however
formsdate4 that sets America
firmly on a high skill, high
wage course.
1 1 4
Today, we stop educating our non-college
hound youth at 18 they must sink or
swim with the skills they have acquired by
that age.
Tomorrow, we must create a means for
students not going to college and for
people already in the workforce to acquire and renew the technical and professional skills they need for high productivity work.
Today. we limit our public lal)or policies
to temporary income maintenance and
minimal training for the poor and unemployed.
Tomorrow, we must expand those policies
to embrace skill development for all
workers.
Today, we don't seem to care if companies
choose to compete by cutting wages or by
increasing productivity and quality.
Tomorrow, we must provide incentives for
the.high productivity, high quality choice.
Our Commission members share a deep
concern about the future that America is
choosing. If America is to remain prosperous, fundamental changes are needed in the
way work is organized and in the way Are
educate and train our people.
The Choice
We hope and expect that others will
examine our proposals carefully. But success, in our view, is not necessarily tied to
the adoption of our precise plan. We will be
successful if our work kindles a debate that
leads to action, however formulated, that
sets America firmly on a high skill, high
wage course.
1 1 5
68
9
THE FOUNDATION SKILLS
Recommendation 1111 A new educational performance standard sboodd be set for all students, to be
met by age 16 This standard sboodd be
established nationally and bettamarked
to tbe highest in the world
All of our students should meet a
national standard of educational excellence
by age 16, or soon thereafter, which will
equal or exceed the highest similar standard
in the world for students of that age. A
student passing a series of performance
based assessments that incorporate the
standard should be awarded a Certificate of
Initial Mastery.
In order to adequately prepare our
young people for working life, we must first
see that they acquire the educational skills
necessary to become effective players in a
highly productive society.
The establishment of a system of
national standards and assessment would
ensure that every student leaves compulsory
school with a demonstrated ability to read,
write, compute and perform at world-class
levels in general school subjects (mathematics, physical and natural sciences, technology, history, geography, politics, economics
and English). Students should also have
69 1 1 6
exhibited a capacity to learn, think, work
effectively alone and in groups and solve
problems.
Among other things, the Certificate of
Initial Mastery would certify labor market
readiness, and a mastery of the basic skills
necessary for high productivity employment.'
The same Certificate would also be required
for entry into all subsequent rorms of education, including college preparatory and
certified professional and technical programs.
The assessment system would establish
objective standards for students and educators, motivate students and give employers
an objective means to assess the capabilities
of job applicants.
The Certificate of Initial Mastery would
not indicate the completion of a student's
formal education. Rather, for the vast majority of students, this achievement would serve
as a foundation for more advanced forms of
education or training.
Effort Based Education And
Assessment
The United States is the most over-tested and
under-examined nation in the world. Most
of the tests that American students take
Me Foundation Skills
Schematic leprapentadon Of The Commission's Proposals
Ism -Awry idlest Itoolk /
111emesorr Ilk MbIde Wool ""
11 7
AU of our students sboukl
meet a national standard of
educational excellence by age
16, or soon thereafter, which
will equal or exceed tbe
highest similar standard in
the world for students of tbat
age. A student passing a
series of performance based
assessments tbat incorporate
tbe standard should be
awarded a Certificate of
Initial Mastery.
The assessment system
would establish objective
standards for students anti
educators, motivate students
and give empkrers an
objective means to assess the
camtbilities ttfjob
applkants.
1 1 8
standardized achievement tests and college
entrance tests are deliberately decoupled
from the school curriculum. Teachers are
not supposed to prepar students directly for
these tests, and students are not supposed to
study for them (except in 'cram tourses' that
few believe have lasting educational value).
As a result of this testing system. American education does not clearly reward
academic effort on the part of either teachers
or students.
An examination based assessment
system would fundamentally change this
situation. At the heart of such a system
would be a series of performance based
examinations for which students can explicitly prepare. (The type of amessment system
we have in mind is detailed in Supporting
Information I.)
A Cumulative Assessment System
The assessment system should allow students to collect credentials over a period of
years. perhaps beginning as early as entrance into the middle school. Thi. kind of
umulative assessment has se% eral achantag...s over a single series of examinations.
!: ould help to organi/e and motivate
students over an extended perio(.I of time.
Rather than pieparing for a kir-oft examination (the form and demands of which a
1 2-% ear-old can only dimly imagine).
students could begin early to collect
cpecific certificam
Ponntlawm Orliss
It would provide multiple opportunities for
success rather than a single high-stakes
moment of possible failure. Cumulative
certificates would greatly enhance the
opportunity for the undeieducated and
unmotivated to achieve high educational
standards. All could earn credentials at
their own pace, as the for any
specific credential would not vary, regardless of the student's age.
It would allow students who are not
performing well in the mainstream education system to elm their credentials under
other institutional auspices.
An Independent Examining
Organization
To set the assessment standards and certification procedures, we recommend the establishment of an independent national examining organization that bn)adly represents
educators. employers and the citizenry at
Urge
The organiration should be authorized
to convene working commissions in a variety
of knowledge and skill areas to help train
judges. set and assess standards and conduct
examinations. The organization should be
independent of st.hools and school systems
and protected from political pressures.
70
10
UNIVERSAL MASTERY OF
THE FOUNDATION SKILLS
Recommendation #2
Tbe states should take responsibility for
assuring that virtually all students
achieve a Cert(ficate of Initial Mastery.
Through tbe new local Employment and
Training Boards, the states, with Federal
assistance, should create and fund
alternative learning environments for
tbose wbo cannot attain tbe Certtficate
of Initial Mastery in regular schools.
It is not enough to establish a high
performance standard It is essential that
e\ eryone meets it. Abo\ e all. we must a\ oid
creating a system of educational 'haves. and
'have nots in w hidi some students attain the
Certificate of Initial Mastery w Me others are
permanentl relegated to the backw aters of
our society. The purpose of the Certificate is
to impro\ e the lifetime education and emplo\ ment opportunities of all students, not to
exacerbate the problems that already exist.
Not all students \\ ill meet the standard
at the age ot 16. Some \\ ill achieve it earlier.
They should ha\c the optic.. of ad\ ancing
immediately to further education or training.
Others may remain in school until age 18
120
before they earn their Certificate of Initial
Mastery. But some will drop out of school
along the way. What should happen to
them?
Local Youth Centers: The Dropout
Recovery System
We recommend that the states, through the
new local Employment and Training Boards
(described in a later chapter), establish local
Youth Centers. These Centers woukl be
legally responsible to the Boards for all
young people between the ages of 1-t and 21
who have left school before acquiring their
Certificates of Initial Mastery. Wally, there
should be a Youth Center in every community or neighborhood.
The first priority of the Youth Center
w ould be to ensure that every young person
attains the Certificate. The Center should
provide a supportive, family-like environment. Young peop!.4 would have year-round
access to basic education in alternative
settings, employment and career counseling,
work experience and job placement. The
Center would provide these services by
maintaining strong liaisons with employers
and connections with the full range of .
I Inagua Masloy qf me hnindatum Awl,
Schematk Representation Of The Commission's Proposals
Sforldorce
/
Local
Training Board
,
vr'
IlinnlisSaily
Certifkate of Initial Mastery
Elementary & Middle School
121
We recommend tbat tbe states,
tbrougb tbe new log:al
Employment and Training
Boards . . . establish local
Youth Centers . . . The first
priority of tbe Youth Center
Would be to ensure tbat every
Young person attains tbe
Certificate.
. . . work experience and Job
placement. The' Center would
provide tbese services by
maintaining Atrong liaisons
with employers . . .
The Center should employ
alternate learning techniques
that are responsive to
different learning styles.
Many of the best existing
programs emphasize learning
by doing often on a fob . . .
122
community health and social service agencies. A strong mentoring network would be
fostered to provide positive role models for
the Center's participants.
A Center might extend its services in a
number of ways. At one end of the spectrum, the Center could provide all or most of
the core services itself. Or, it could contract
with a range of providers. including public,
private. for-profit and not-for-profit organizations (including schools) to supply many of
its services. Some programs already in
:xistence can point the way (see Supporting
Information II).
The Center should employ alternate
learning techniques that are responsive to
different learning styles. Many of the best
existing programs emphasize learning by
doing often on a job as well as use of
computer based instruction. These techniques and many others could be adapted to
suit individual circumstances.
Building The Connection Between
Work And Education For Young
People Who Do Not Have Their
Certificates
Today, the motivation to achieve in high
school is often overshadowed by the money
a job can provHe. Students who drop Out of
school, or who merely maintain a physical
presence long enough to obtain a diploma
(doing as little work as Ex ;sible), often get
jobs to have spending money. They see no
economic benefit to more schoolwork. They
are often right.
The most effective way to get young
people to achieve their educational qualifications is to establish clear signals that their
education will have genuine value and to
create positive consequences for effort and
success. Vague homilies on the importance
of learning will not work. The lack of any
clear, direct connection between education
and employment opportunities for most
young people is one of the most devastating
aspects of the existing system.
That kind of connection will only occur
for many students in the Youth Centers if
local employers organize to provide job
opportunitie: for them. Business compacts
and individual companies across the nation
already give preference in hiring to young
people who stay in school.
We strongly urge extension of such
initiatives to establish employment and
training options for Youth Center enrollees.
Guaranteeing the right to a good
education to every young American and
providing positive links between educational
achievement and jobs are essential to the
creation of an educated nation. However,
we recognize that some young people will
still not exercise their right. Thus, success
must -Also depend on placing an obligation
on young people to learn.
173
1 mimed MiWery Qf Me Fmmdanon Ska 72
Once Youth Centers are established, we
propose that the child labor laws be
amended to make the granting of work
permits to young people up to age 18
contingent on either their possession of a
Certificate of Initial Mastery, or their enrollment in a program leading to the Cr.'ificate.
At first glance, this may seem
draconian. But, in the long run, this requirement will benefit our youth and ultimately
the nation. If our future workers do not
possess the education and skills signified by
the Certificate of Initial Mastery, they will be
condemned to dead-end jobs that leave them
in poverty even if they are working. The $4
per hour they can earn at age 16 might seem
appealing compared to no earnings, but if
that is all they are equipped to earn at age
30, the appeal will be gone.
In 'nigh unemployment areas, where th-:
prospect of earning money while going to
the Youth Center program is slight, we
suggest that the stat s and Federal government, through the Y nith Center. provide
paid work-study arrangements. (Safeguards
can be created to prevent displacement of
the existing adult workforc: and to protect
labor standards.) In certain cases where
such work would create particular hardships,
stipends for needy students should be
considered.
Preschool Preparation And School
Restructuring
No nation can expect to meet a world
education standard when one out of five of
its children lives in poverty. That problem
will not be eliminated overnight. In the
meantime, it is essential to address the worst
effects of poverty among children. Much
can be accomplished through the extension
of effective child development programs to
more children in need, a problem on which
the administration and the Congress have
made a start. It will also be critically important to improve the health of young, lowincome children, especially the growing
number born addicted to drugs. We have
not studied these problems in detail, but we
recognize that our aspirations require their
solution.
To say that we cannot reach a world
education standard without addressing the
problem of poverty is not, however, to say
that the schools cannot be held accountable
for poor student performance. The record
shows that some inner city and rural schools
serving very poor children produce high
levels of student achievement.
If standards are raised and nothing is
done to improve our schools, the Youth
Centers might become catchment areas for a
swiftly growing number of students. This is
not our ;ntention. The success of our proThe lack qf any clear, direct
connection between edam lion
and employment opportunities
for most yosurg people is one
of the most devastating
aspects qf the existing system.
That kind qf connection will
only occurjbr marry students
ix the Youth Centers Vocal
employers organize to provide
fob opportunities for thew
Once Youth Centers are
established, we propose that
tbe child labor laws be
amended rn make tbe granting
of work permits to young
people up to age 18 contingent
on either their possession of a
Certificate of Initial Mastery,
or their enrollment in a
program leading to the
Certificate.
1 24
7.3 unimrsal Mastery Of The Foundatron Stalls 1 25
No: until there are real
rewurds for school staffs
whose students succeffl and
real consequences for those
whose students do not can we
stile!), assume that erelything
possible is being done to help
all children succeed in schoo;
126
posals will depend on the schools doing a
much better job of educating all students.
High standards alone will not ensure that
outcome
The schools like our businesses
also need to be restructured for high performance by pushing decisions down to die
school staff and then holding die staff accountable for student performance. As
matters now stand, teachers ofter lack the
discretion they need to be able to bring
eryone up to a high standard. But they
also lack the incentive to make the effort.
Not until there are real rewards for school
staffs whose students succeed and real
consequences for those whi)se students do
not can 'we safely assume that everything
possible is being done to help all chiklren
su(ceed in school.
Incentives For Schools To Retain
Potential Dropouts
Nlam hool districts are making substantial
efforts to improve the education of low
inLome students but ha\ e little success
simpl because they lack the necessary
funds A number of the countries we visited
address tlus problem by making sure that
se !,chool districts serving the rxmrest
hiklren 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' aid
that can be supplemented by those communities in the best position to do so, as in the
United States, but rather to be sure that
everyone 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 that
enrollment in the Youth Centers would fall
as the districts became better able to meet
the needs of students in trouble.
Funding The Youth Centers
The Youth Centers we have proposed must
have the funds they need to succeed.
School districts would be required to notify
the nearest Youth Center about any student
who drops out The school district would
transfer to the Youth Center the average perpupil expenditure (including all state and
Feckral funds) that the school would have
reieived for that student. Payment would
continue until the student receives the
Certificate of Initial Mastery or reaches age
21, w hichever collies first.
This structure creates a powerful incentive for schools and gm ernments to develop
programs to retain and educate their students
properly the first time.
Dropouts are expensive for America. A
high percentage of student dropouts abuse
drugs, conunit crimes, are unemployed or
must rely on welfare Many become teenage
parents. More than 60 percent of the people
(,)
in our prisons are high-school dropouts. On
average, it costs more than $16.0(X) per year
to keep prisoners housed compared with
less than $4,300 for a year ot high school.
In 1989 approximately 800,000 16-yearokls dropped out of high school. To support them in the schools would have cost
about $3.4 billion per year.
To educate those dropouts in Youth
Centers would probably be more expensive
because many have special needs. If we
added a premium of 20 percent for every
dropout attending a Youth Center program.
and if i', took two extra years in a Youth
Center to attain the Certificate of Initial
Mastery, the Youth Center system would cost
about $8.2 billion per year.
This is a small pric: to pay to assure
that every dropout in the nation acquires the
skills and competencies necessary to lead a
productive! work life. If we hope to remain
a competithe and productive economy. we
cannot afford to lose 20 to 23 percent of our
future workers: we must begin taking responsibilit for them,
Who is going to pa) We twee proposed that the sche)oi distucts de, so, but it is
unreasemable to expect beleaguered inner
cities and rural communities to pay the
additional costs of dropout recoc ery without
hdp from outside the community. That help
should he forthcoming from both state and
1 s
-5
Federal governments. Some may come from
reallocating funds that now go to wealthier
districts, but the most likely source will be
new revenues. Either way, the sum, though
substantial, is smoll in relation to the certain
gain.
tilretsa/ uusterrcy /14,
Aff we hope to remahe a
competitive and productive
economy, we caomot qfford to
lose 20 to 25 percent qf our
future workers,. we must
beghe taking responsibility for
tbem
129
11
TECHNICAL AND
PROFESSIONAL
EDUCATION
Recommendation #3
A comprehensive system of Technical
atsd Professional Cert(ficates and
associate's degrees should be created
for tbe majority of our students and
ads& workers wbo do not pursue a
baccalaureate degree.
Our goal is to establish a structure that
will give our front-line workers the systematic skills, professional qualifications and
respeci that their counterparts enjoy in other
countries.
The system we propose would also
provide a clear structure for young people to
mdke a smooth transition from school to
work. It would offer them clear routes to a
variety of career qualifications. opportunity
for work based learning and an alternative
path to college.
Technical and Professional Certificates
would be offered across the entire range of
service and man ifacturing occupations. A
student could earn the first occupationspecific certificate after completing two to
four years of combined work and study.
depending upon the field. A sequence of
130
advanced certificates, attesting to mastery of
more complex skills, would be available and
could be obtained throughout one's career.
This proposal contains four elements:
1. Performance based assessment standards
should be established for iolr covering the
broad range of occupations in the United
States that do not require a baccalaureate
degree. Achievement of standards would
result in awards of Technical and Professional Certificates and associate's degrees
for various mastery levels. The standards,
at least equal to those set by other advanced industrialized countries, should be
set by national committees convened by
the Secretary of Labor.
2. High schools, community colleges, proprietary schools and other educational and
training institutions should be encouraged
to offer courses leading to the Technical
and Professional Certificates and associate's
degrees. Programs and their providers
should be accredited by state hoards of
higher and vocational education.
7iximical .4nd Professional Education 131
A National Board fill.
Professional and Technical
Standards should be
established . ftol .
develop a national system qf
ind.istry based standards and
certifications qf mastery
across a broad range qf
occupations.
Industry and trade based
committees appointed ky the
Board would develoo
vtaWdards for each industty
ul trade.
132
3. Employers should puw ide part-time work
and training as part of the curriculum in
each certification course and reward those
ho attain the certificates with higher
quality jobs and better pay.
4 The ..tote k. and the Federal government
shoukl furnish four years of financing to
all Americans to allow them to pursue
education beyond the Certificate of Initial
Mastvry at some point in their adult lives.
A system of industry based skill .:ertifications li:ts a number of attractive katures
It woukl facilitate communicati, n between
schools and industry about employer and
union expectatkm, and goals. By setting criteria for hiring it would help employers find
qualified applicants For employees, it
ould establish clear knowledge and skill
based standards fiif career progres,ion, help
pro ent hiriug, discrimination and improve
the transferability of skills. Einall, fiif
gmernment, a system of skill based certificatm V ould ofF:r an independent means of
assessing the competence of training deliverers.
The Certification System
A National Board for Professional and
Technical Standards should be established by
the Secretary of Labor with the cooperation
of the Secretaries of Commerce and Education This 13()ard. ctmiposed of distinguished
,_presentatiN es of ;.mployers, unions, education and atkocac groups would develop a
Al bilk (I/ Ohl l'Ifple1(dial I thrtalum
national system of industry based standards
and certifications of mastery across a broad
range of occupations.
Industry and trade based committees
appointed by the Board would develop
standards for each industry and trade. Each
Commiucc would build upon existing
certification procedures, and develop a
single coherent and internationally competitive set of assessments to guide career
progression within each industry or trade.
The Program
The occupational certification programs
would be open both to students (as soon as
they receive their Certificates of Initial
Mastery) and adult workers. The assessment
standard for a program would be the same
for both adults and students, although the
delivery meL:.anism and curricular details
might vary.
Each occupational pn)gram should
combine school and work based learning
and balance general education and industry
specific requirements. Clear qualifications
and career progressions should be established with'n each occupation.
Witl appropriate labor standards and
other safeguards, the work component of
these programs could provide industry with
the temporary and part-time workers they
sec l.. allowing them to give their full-time
wort-ers greater stability. For students, these
jobs would provick. valuable work experience and some income.
133 -8
The system shoukl offer mobility. both
horizontally among occupations and \ erti-
(-ally into options for further training or
study Above all. it must be designed to
avoid dead ends. Young people who
succeed in one of these programs should
receive a high-school diploma or an
associate's degree, and should qualify to
enter college or a variety of advanced techn;-
cal or professional programs
A sample four-year curriculum to
prepare manufacturing pniessionals ccnild
include English. math. histon. statistics.
computer programming. co )mmunications.
physics. chenustn and operations analysis
It coukl also include industry specific subjects such as introducton courses in mechanical. electrical, chemical and electronic
machinery: instrumentation and testing
pnicedures. cost accounting; industrial
design, and imenton , process and statistical
qiulity control.
A young person \ ho ,:ceives a Certificate ot Initial Masten might pursue the
pmgram in high school, a kwal communit)
college or in a lw 0-plus-two pro )gram.
indiNicluals seeking a career in
retail coukl also pursue a three- ear pn Tram
combining general courses \ ith occupationspecific learning. General courses might
include introducton computer pr(Tramming.
English and foreigr ' nguages, accounting.
-9 1 4
public speaking, psychology and business.
Occupation-specific courses could include
retailing, inventory control, custome: relations. ordering systems, merchandising and
marketing. The program might also include
Options for specialization in certain products.
A program in clothing retailing, for example.
might include courses on how diffeient types
of clothing are manufactured, fabric-c'haracteristics and care, fashion deAgn and so on.
Funding Technical And Professional
Education
The Commission helieves s.rongly that our
society should provide the resources to
allow all students to pursue these Technical
and Professional Certificates. No student
should be discouraged from doing so for
financial reasons.
The ast majority of stu.lents entering
these technical and professional certification
programs would do so around their junior
.ear in high school at age 16.
A substantial amount more than s35
billion is already being spent on the
education hind training of our 16- to 19-yearold population.
All states guarantee free education to
students in their junior and senior years of
high school. These funds could be used for
the first two years of college preparation
courses or professional and technical education beyond the Certificate of Initial Mastery
for all students.
7ec /mut/ Pnyi,volud Mucation
The system should offer
mobility, botb horizontally
among occupations and
vertically into options for
further training or study.
Above all, it must be designed
to avoid dead ends.
1 5
The specific method (If
funding chosen is not as
important as tbe establishment id a means to provide
universal access to serious
ppofessional and technical
trainingfor our non-college
educated workforce.
1 q6
In addition, some states also heavily
subsidize attendance at community colleges
and universiCes for the 40 to 50 percent of
their citizens taking post-high-school
courses. These funds could be used to
finance the Technical and Professional
Certificate programs we propose.
But the current financing systems for
post-secondary students who are not studying full time for a baccalaureate dewee are
inadequate and Line\ en The Commission
believes these students deserve the same
kind of support that four-year college student,. recen e. A mechanism should be
created that provides four years of funding
beyond the Certificate of Initial Mastery for
eryone. That mechanism could make use
of the funds already available, but it should
provide a means to meet the needs of evely
candidate for Technical and Professional
Certificates.
The needed funds could result from a
modification and extension of existing
programs or from new sources.
At one extreme, a 'GI Bill system could
he funded from general revenues to guarantee everyone four free years of education
beyond the Certificate of Initial Mastery.
Studies indicate that the 'GI Bill' paid for
itself many tiMes Mer in increased income
for America.
Iir% /Mica/ .111d PrOfrsmona/ kdlic( non
At the other extreme, a self-financing
scheme could be created whereby the
government would loan all students the
funds for post-secondary professional,
technical or college education and then
recoup the loan through a small surcharge
on an individual's income taxes over many
yearS.
We call upon the National Center on
Education and the Economy to convene a
panel of experts to make recommendations
for funding the system we propose.
The specific method of funding chosen
is not as important as the establishment of a
means to provide universal access to serious
professional and technical training for our
non-college educated workforce.
80
12
LIFELONG LEARNING AND
HIGH PERFORMANCE
WORK ORGANIZATIONS
Recommendation #4
All employers should be given incentives
and assistance to invest he tbe pother
education and training :Ai- tbeir workers
and to pursue bigb productivity forms
of work organizatiott.
America's productivity in the 1990's will
climb only if the strategies of American
employers are redraftc.d to include serious
investments in work reorganization and
orker training. While man) employers talk
about human resource issues, t(x) few
consider them to he fundamental to their
organization's success
To make full use of the productive
p()tential of our N1 orkforce and to encourage
the use of high productivity models of work
organization. N1 e recommend that employers
be provided ith financial incentives to train
their workers and w ith the technkal assistance necessary to move toward higher
producti)ity work organizations
Other countries are dri)en to pursue
high pnklucti)ity work because public la N1 s
make it difficult to pay low N1 ages and lay
off workers. National full-employment
81 :18
policies, stringent severance arm layoff
notification laws, high minimum wage laws
and statutes requiring union approval of
management actions all motivate foreign
companies to invest in their workforces.
Since this is a Commission on workforce
skills, we have not addressed these broader
policies directly.
However, other nations are also driven
to high performance work organizations by
laws that require companies to invest directly
in the training of their workers (see Supporting Information IV). In many advanced
industrial nations, laws require companies to
spend between one percent and three and a
half percent of their payrolls on formal
training programs (beyond normal on-the-job
training).
Because this is required, companies are
encouraged to think about how to make the
best use of these funds to develop skills.
In this country, only a handful of our
companies invest in training. Those who do
not, fear that such investment:z will be
wasted, because trained employet.s will be
Lifelong Learning And High Peiformance Work Organizations
America's productivity in tbe
1990's will climb only (f the
strategies of American
employers are redrafted to
include serious investments in
work reorganization and
worker training.
. we recommend tbat
employers be provided witb
financial incentives to train
their workers and with the
technical assistance
necessary to move toward
higher productivity work
organizations.
119
ensplayers trou'd be
required to spend
approximately one percent of
payroll On education mul
training. . . Emphiyers failing to meet this
taiget imuld be required to
contribute appiwximately one
percent nipariwIl to a
vationa.' Skills Detvlopment
Fund.
All companies. organizations
and institutions, regardless of
size or type of business.
including local and state
governinents and schools,
would be requb-ed to
participate.
140
hired away. Others simply do not see the
value of significant training investment,
because of the way they use their workers.
Compulsion is never a popular approach to puNic policy. Playing copy-cat
with the polides of other countries is not
what made this country great. However, the
small minority of our companies that cio
invest in training, either out of competitive
necessity or simply because it makes go(xt
business sense, are not being treated fairly.
They are carrying the national training
imperative on their backs.
The overriding issue is noi the economic survival of a few employers; it is the
economic security of an er.tire workforce
The nation will not compe:e effectiely
unless all employers participate in a set of
financial incentives to train their workers.
An Incentive For Training And Work
Reorganization
American employers on average spend
slightly more than one percent on formal
training. 11 wever, the distribution of
spending is highly skewed. A. small percentage of firms spend more than two percent,
while the vast majority are well below one
percent.
We recommend that th Federal government require all employers to spend a
minimum amount of funds annually to send
their employees through certified education
and training 1,rograms. In unionized workplaces, compaqies and unions should jointly
negotiate ,,nd administer the training programs.
Initially, employers would be required
to spend approximately one percent of
payroll on education and training (with the
amount increasing progressively over the
decade). Employers in many foreign countries are already required to invest a minimum of one percent in employee training.
Companies should fund training for frontline workers in proportion to their total
representation in the firm's worktbrce.
Employers failing to meet this target
would be required to contribute approximate4 one percent of payroll to a national
Skills DeveloPment Fund. The exact amount
for each organization would be calculated as
a specific payment per worker, in order to
ensure sufficient resources to train lower
paid worker
The Skills Development Fund would be
used to train temporary, part-time, dislocated
and disadvantaged workers whose training
employers would probably not underwrite.
All companies, organizations and
institutions, regardless of size or type of
business, including local and state governments and schools, would be required to
participate. The Comniision feels strongly
that this expenditure should come from
employer, not employee, contributions. The
contribution would thus give employers an
141
1 Ileking learnt .lud Peyomumie tt rk ONantzahons 82
incentive to reorganize work to take advantage of the higher skill levels for whirh they
are paying
Until the various certificate programs
we propose are implemented. employers
should be Allowed to use their training
allotment for tuition and instructional costs
for any type of organized instruction (not
including direct efforts on the lob). The
program should be approved by the union if
there is one.
After the cxcupational certification
prc)grams ire established, however, we
recimimend that only accredited courses that
form part of a formal certification program or
a college degree program he counted toward
the empk,er's minimum training obligation
Tying acceptable expenditures to
certificate pr(Trams makes the expenditure
easy to monitor, ensures that funds are not
beim. spent on frix ohms actix Ines and helps
emplo)ees ohtain skilk that haxe broad
application.
Developing emplocvs skilk, how ecer,
does not necessarily lead to smooth or
successful reorganization of IA ork For this
reason, the Commission recommends that up
to 15 percent of the funds be used for
expenses associated IA ith efforts to redesign
work. Acceptabk activities might include
research and development on competency
based training or on high productivity work
reorganization.
142
Each year, employers would be asked
to certify that they had met these training
and education requirements, perhaps as part
of the unemployment insurance tax form. No
new bureaucracy would be needed and the
reportin6 requirement would be minimal.
California and Rhode Island, among other
states, are already collecting funds for training through the unemployment insurance
program.
This proposal may appear burdensome
to small companies that do not compete
internationally or perceive no need for
training. But the most equitable initiative is
one that treats all companies and institutions
uniformly. If employers cannot or will not
make the necessary investments to train their
orkers today, the government will he
forced to tram them tomorrow A skilled.
productive IA orkforce benefits our nation's
economic well-being It is everyone's responsibility.
For that reason, the Commission feek
.that the proposed method for financing
further training is fair and reasonable, however. other proposals might also be used
For example. companies below a
certain siz, might be exempted from this
obligation and training for their employees
could he provided through the Skills Development Fund. Another possibility is to use
public funds to finance continuing educatkm
and training. A third alternative would be to
1 nelong teaming .1ial High Peijonnance tt'ork Organization%
. . only accredited courses
that form part of a formal
certification program or a
college degree program
(should) be counted toward tbe
employer's minimum training
obligation.
. . . up to 15 percent of tbe
funds . . . [could./ . . . be used for
expenses associated with
efforts to redesign work
143
Reorganizing toward higher
productivity forms qf work
may seem risky and even
companies that are
committed to this path often
lack tbe information or
technical expertise necessary
to accomplisu the task. This
is especially true for the
nation's small irtsinesses.
VT -e therefore make two
proposals. First, that a
national inftwmation and
technical sert'ice be
established to provide
support to companies in the
reorganization qf work.
Secoml that national quality
awards be expanded to
recognize more best-practke
companies.
144
create an individual training account financed hy companies and by the government.
Each method has advantages and
disadvantages. Here again, the details of the
finance plan are less important to this Commission than the necessity of developing
some means of investing in our front-line
workers. Virtually every advanced industrial
nation uses one or another of these methods
to create a substantial fund to support the
continuing education and training of workers. We are one of the few with no method
and no fund at all.
Incentives To Create High
Performance Work Organizations
Reorganizing toward higher productivity
forms of work may seem risky and even
companies that are committed to this path
often lack the information or technical
expertise necessary to accomplish the task.
This is especially true for the nation's small
businesses.
We therefore make two proposals.
First. that a national information and technical sen ice he established to provide support
to companies in the reorganization of work.
Second, that national quality awards be
expanded to recognize more hest-practice
companies.
Technical Assistance For Employers
The United States Department of Commerce
should establish a National Clearinghouse for
the Reorganization of Work and Workforce
Skills Development. The Clearinghouse . would be responsible for coordinating all
Federal assistance to employers and should
work closely with the D-Tartments of Labor,
Defense. and Education to:
Disseminate information on successful
forms of work reorganization across
industries and types of businesses.
Promote and help coordinate educational
visits to successful high performance work
sites.
Provide a one-stop shop for firms seeking
general or specific guidance and solutions
to challenges encountered during the
transition to new forms of work.
Distribute examples of best-practice
companies, as well as materials from other
agencies, such as the Department of
Defense's training methodologies and
instructional programs.
Encourage partnerships among state, local
and private sector groups.
The National Science Foundation
should he given a mission to improve workplace practices through the development and
application of new technology.
I ii, long Learning .4nd Mgh Peribmance Work Organizattom 1 45 84
We endorse the establishment of a
civilian technology agency in the Department of Commerce. Such an agency would,
among many other functions, have the
responsibility to help companies organize
work so as to make the most efficient and
effective use of new technologies.
Federal raboratories in seve:al Cabinet
departments shoukl be asked to devote
greattr efforts to the commercial applications
of the technologies in which they are involved and to training companies in implementing high productivity work organizations r,:la tx.1 to those technologies.
The 1988 Omnibus Trade and Competitiveness Act established three manufacturing
technology centers and provided fe- assisunce to state technology centers. These, too,
could become a focal point for assessing and
disseminating effective approaches to the
organ'zation of work to businesses interested
in making the most effective use of new
manufacturh g technologies.
Quality Awards
To focus national attention on the issue of
work reorganization, awards programs
designed to recognize and promote quality,
excellence, productivity and improved
workplace environments should be expanded.
The Malcolm Baldrige National Quality
Award contributes significantly to the natioral awareness of quality and the reaganimtion of work. The Senate prodt hvity
85 146 a
awards and F / awards also play
important roles. We .,commend expansion
of these awards to recognize more bestpracti,:e compinies and institutions.
Hie Department of Labor has recently
est-blished a new award to recognize excellence in upgrading the quality of the American workforce. We strongly urge that, as part
of its criteria, the award include changes in
the organization of work and their effect on
worklife and employee productivity.
lifelong Learning And Higi, Performance Wcrk Organizations
Federal laboratories be
several Cabinet departments
sbould be asked to devote
gmater 'JAM to tbe
commercial applications qf
tbe teclonologies be wbkb cbey
are hem ,ed and :o training
companies be impkmenting
bigb produaivity work
organizations related to
tbose tecbnologies.
147
13
AND A SYSTEM TO PULL IT
TOGETHER
Recommendation #5
A system qf Employment and Training
Boards should be established by Federal
and state governments, together with
local leadership, to organize and oversee tbe new scbool-to-work transition
programs and training systems we
propose.
In this report, we have compared
American educational and training programs
to those in other industrial countries. In
every case, we have found that somewhere
in this country, a state, city or institution is
doing something as interesting, as imaginative and as effective as anything done anywhere in the world.
What is missing is a cohesive system.
What we 1-.-k, and what many of our competitors hat.e, is a means of joining all the
pieces together into one seamless web.
Our preceding proposals lay the foundation for a cohesive, high performance
education and troining system. We would
reorganize the current array of programs and
1 4 S
87
institutions into a streamlined system based
on two sets of goals:
We expect our standards for the Certificate
of Initial Mastery to drive a system of
work preparation designed to bring every
American, youth or adult, up to a high
level of foundation skills. These standards
should be applied to every program or
institution concerned with baic education
or literacy. This would include our current
K-12 system of education, the alternative
Youth Center system we propose and
remedial programs for youth and adults
operated through a variety of public
programs.
We expect our standards of technical and
professional mastery to drive a system of
occupational education and training
designed to allov a majority of American
worktrs to thrive on new technologies
and work processes. These standards
would apply to corporate training and to
programs in high schools, community
colleges 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-Old
Hotel Attendant
with Fifth Grade
Educazion
15f)
And A System To Pull It Together
employers and individuals would have
confidence in its quality and its transferability.
The certification s stems we propose,
and the tducation and training initiatives
they drive, should be linked to labor market
information and to job placement programs
at the local and state levels. The fragmented
services we now provide should be replaced
by a uniform system.
Employment And Training Boards
The leaders of our communities shonld take
responsibility for building a comprehensive
system that meets their needs. The local
Employment and Training Boards for each
major labor market would:
Take responsibility for the scho(4-to-work
and '1outh Center-to-vork transition for
young people. and for their further counseling on education, training and work
opportunities.
Manage and oversee the alternative certification system fc)r scluml dropouts through
the Youth Centers.
Manage and oversee a second chance
system for adults seeking the Certificate of
Initial Mastery. This system would be
operated in conjunction with the Youth
Center program, but may require separate
facilities and programs for adults
152
8)
Manage and oversee the system for awarding Technical and Professional Certificates
at the local level.
Manage a labor market information system
to guide program planning. The Board
would maintain a data base containing
detailed information on the offerings of
service providers (including their quality
ex.ord and the costs of their services). It
\oeld also include information concerning the number of trainees registered in all
areas of training in any given year. the
annual record of placements, job openings
and the expected demand for hbor in all
fields.
Manage a labor exchange service, which
would provide information, counsding
and contacts for individuals sedan% job
opportunities. The service would draw
heavily :)n the data base just described.
Coordinate existing programs concerned
with job placement, vocational education,
customized job training. j'IVA and weltare
related job training.
The Boards Y'iould be comp sed of
company, union and public official, as well
as representatives of community based
orgar,ization:.. The Boards should also he
able to competate and attract a highly
professional staff.
Service on the Boa* should be regarded as a mark of hign honor and membership :)n the staff should be seen as a high
And A System To Pull It Together
The local Employment and
Training Boards for each
major labor market would:
Take responsibility for tbe
school-to-work and Youth
Center-tv-work transition
for youvg people.
Manage and oversee the
Youth Centers.
Manage and oversee a
second chance system for
adults seeking tbe
Certificate of Initial
Mastety.
Manage and oversee tbe
system far awarding
Technical and Professional
Certificates at the local
leveL
Manage a labor market
itlformation system.
Manage and oversee tbe Job
service.
Coordinate existing
programs.
153
We envision a new more
comprehensive system where
skills upgrading for the
majority of our workers
becomes a central aim of
public policy. It begins with
the inidal skills preparation
fyoutb and their school-towork transition. It continues
with tbe operation of skills
upgrading programs for
adult workers who bare jobs,
or are between jobs. It ties
together this central mission
with job information,
employment counseling, job
placenwn: and hiCuiiic
maintenance for the
unemployed
5 4
point in one's career. Boards can and
should be designed to attract some of the
most competent and dedicated people in the
community.
In cases where labor, management and
the community agree they have been effective. Private Industrial Councils could be
used as a base on which to build the Boards.
The states would need to create a
parallel structure to support the local boards,
coordinate statewide functions and establish
state standards for their operation.
States would also need to work with
each other, perhaps through an interstate
compact, and with the Federal government,
to make the national system work smoothly.
As part of this national structure, it
would be wise for the President to create a
Cabinet council that would be directly
responsible to the Office of the President for
coordination of Federal government policy
and programs relating to human resources
policy.
A New Approach To American Labor
Market Philosophy
Underlying this proposed structure is a
philosophical change in the way we as a
nation view human resources policies.
Traditionally we have operated systems that
work 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 dislocated
workers, using short-term training as one
means of assisting with job placement.
We envision a new, more comprehensive system where skills upgrading for the
majority of our workers becomes a central
aim of public policy. It begins with the
initial skills preparation of youth and their
school-to-work transition. It continues with
the operation of skills upgrading programs
for adult workers who have jobs, or are
between jobs. It ties together this central
mission with job info- Jion, employment
counseling, job plact.nent and income
maintenance for the unemployed.
It is this bold, new agenda which
necessitates the creation of a more uniform
system to replace the existing variety of
agencies.
1 5 5
90
toward an economic cliff.
longer be able to put a higher
prOportiOn of our people to work to generate ecohomic growth. If basic changes are
not made, real wages will continue to fall,
especially for the majority who-do not
graduate from four-year colleges. The gap
economic 'haves' and 'have nots'
will widen still further and social tensions
will deepen.
Our recommendations provide an
alternative for America. We do not pretend
that this vision will be easily accepted or
quickly implemented. But we also cannot
pretend that the status quo is an option. It is
no longer possible to be a tugh wage, low
skill nation. We have choices to make:
Do we continue to define educational
success as 'time in the seat,' or choose 1,
new sy. tern that focuses on the denu)nstrated achievement of high standardsi
Do we mntinue n) pro\ kle little iniento.
for non-college students to stud\ hard and
take t0tIgh stthick Is, Ut ho( )se a s\ stem
that will reward real ett'ort \\ ith .ttet
and better johs%
1 5 6
Do we continue to turn our backs on
America's school dropouts, or choose to
take responsibilky for edncating them?
Do we continue to provide unskilled
workers for-unskilled jobs,- or train skilled
workers and give companies incentives- to
deploy them in high peffonnance work
organizations?,
Do we continue in most companies to
limit training to a select handful of managers and professionals, or choose to provide training to front-line workers as well?
Do we cling to a public employment and
training system fragmented by institutional
barriers, muddled by overlapping bureaucracies and operating at the margins
of the labor market, or do we choose a
unified system that addresses itselt a
illapHitv of workers%
Do we Lontinue reinain indifferent
the lu A\ \\ age path being ihosen b man\
Lompanies. oi do w e pro\ ide InC enti\ es
tor high produiti\ it \ i hoIces! t 1 t; 0.( 1
e systems we propose
provides a amigos* Ataerkan
adagio* Bolty executed, it
bas tbe potential not sump&
to put us on as equallooting
with our conspetitors, but to
allow us to kap abea4 to
build tbe world's premier
workforce. In so doing, we
will create a formidable
competitive advantage.
Taken-together, the Commission's
recommendations provide the immewolk far
Atigh quality American
don and trainktit system, closely linked to
high performance work
system we peal:Kee
American sokition. &lyji has
the potential not simply to put us on an
equal footing with our competitors, but to
allow us to leap ahead, to build the world's
premier workforce. In so doin& we Win
create a formidable competitive advantage.
The status quo is not an option. The
choice we have is to become a nation of
high 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 many
who have studied the skills of America's
workforce before us. Two recent reports
stand out. Workforce 2000: Work and
Workers for the 21st Century, produced by
the Hudson Institute under a grant from the
United States Department of Labor, made a
powerful case for putting the issue of workers' skills squarely on the nation's agenda.
The Forgotten Half Non-College Youth in
America, a report from the William T. Grant
Commission on Work, Family and Citizenship, made an eloquent plea for attention to
the needs of American youth who do not go
to college This is the group with which this
Commission is primarily concerned. Together, these reports defined the starting
point for our work.
The study which supports this report
was carried out by a research team of 23
loaned executives from companies, unions,
industry associations and the United States
Department of Labor. The work began in
July of 1989 and was completed in June of
1990.
Our study began in the United States,
where we divided the American economy
into industry groups and interviewed firms in
each one.
95
Starting at the top of the firm, we asked
the executives to define their market and
their competitive environment, what the
drivers of competitive success in their industry are, how they organize their workplaces,
how their work organization is changing,
what skills their workers need, what they are
doing to make sure those skills are available
and what government services they use.
Then we went down to the shop floor, office
or construction site and asked a different set
of 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 people
with the needed skills, and, if so, what is
being done about it?
When we had completed these interviews, we went abroad to six countries:
Germany, Sweden, Denmark, Ireland, Japan
and Singapore. There, we repeated the
process on a somewhat attenuated scale,
selecting and interviewing firms in a wide
range of industries, asking much the same
questions we had asked at home. We also
conducted interviews and gathered data on
the economic and human resources policies
1 60 The Study
of those countries, as well as the structure
and operation of their social programs,
particularly those relating to education,
training and other labor market policies.
Here, too, we relied not just on publicly
available data, but went further, interviewing
people at every level of the system, from
cabinet ministers to people taking courses in
training centers. Gradually, we put together
a cemposite picture, in some detail, of how
the whole system fits togethefin each
country, how values interact with policy,
practice, history and demography to frame
the way each nation is going about the
business of developing a skilled workforce.
We concentrated the next stage of our
research in several states. In each of these
states, we selected one or two major labor
markets. Just as we had done abroad, we
proceeded to put together a picture of the
labor market and how it actually operates,
how federal, state and local policies interact
with the practice of private finas, public
agencies and education and training institutions to define the American system for skill
development and employer demand for
skilled labor.
We then drew upon the experience of a
number of our Commissioners and Case
Team members and asked them to prepare
papers in selected fields of expertise. These
included looks at the history of federal and
state labor market policies; an analysis of
apprenticeship and industry institute training
The Study - I 6 1
models; an analysis of 'best practice' programs for dropout recovery and public
training; a view of educational assessment
models now under study in various states; . and a paper on the financing of America's
labor and education systems.
Before we were done, we conducted
interviews with more than 2,000 people at
more than 550 firms and agencies, not
counting innumerable local labor market
interviews. Ail along, we read a small
mountain of government and private reports
and analyzed data not based on our own
field research.
The study was comprehensive in scope.
Our subject required the integration of
information from diverse disciplines: corporate strategy, labor market policy and educational policy across a number of countries.
While our work was thorough, it was conducted as a strategy study, not an academic
inquiry. Our intent was to gather sufficient
information and do adequate analysis to
make policy recommendations.
Our corclusions are based in part upon
data from our study. They are also based on
the collective wisdom of our Commissioners,
who have years of experience addressing
issues of labor policy, education and corporate strategy.
96
Supporting
Infirmation
4
A
I.
I
0111
SUPPORTING
INFORMATION I
A NEW AMEnICAN
ASSESSMENT SYSTEM FOR
FOUNDATION SKILLS
Assessment System For Foundation
Skills
Properly designed, assessment system
should function both to motivate and organize students' work during the school years
and set a benchmark to which educational
institutions could target their efforts. To
meet these objectives, the system we recommend should:
Reward effort and organized work.
Demand thinking and reasoning skills of
this nation's students, preparing them for
more complex work environments.
D;rectly assess thinking based achievement, using examinations equal to the
task.
Allow students to accumulate evidence of
achievement and accomplishment, rather
than relying on a single point of examination to determin-! performance.
Be administered and directed by an independent certification agency.
99
Effort Based, Not Arbitrary, Education
And Assessment
This Commission proposes an educational
system that provides clear incentives and
goals for students, measures educational
attainment and skill competencies and
rewards a student for effort and performance.
The current educational structure in the
United States does not adequately measure
nor reward a student's effort or academic
performance. Due to the way they are
examined and graded, students are not held
to a clear standard of achievement toward
which they can work.
For students who do not plan to go to
college, high-school grades often have little
meaning. As very few employers scrutinize
high-school transcripts when making hiring
decisions, what compels students to do more
than the minimum required tc obtain a
passing grade? What motivates a student to
work hard in school?
Grades have more meaning for college
bound students, but grades alone do not
determine a student's acceptance or rejection
from the college of choice. Admissions
officers look at performance on standardized
1 R3 Sttpporttng Infigmatton I
national tests, like the ACT and the SAT.
However, school curricula are not directly
tied to these tests. Students have no way of
adequately preparing for them, save the
cram courses that teach shortcuts, but not
subject content. Compounding this, teachers
are often actvisectnot-to de/irltely prepare
their students for these exams so as to avokt
being accused of giving them an 'unfair'
advantage.
For either type of student, effort is not
directly tied to results. Currently, no one can
be held accountable for how students perform in school. If students who barely make
it through the system receive the same
reception in the workplace as those who
really put forth an effort, is it surprising that
some students do not take their education
seriously?
An examination based achievement
certification system-can fundamentally
change this. At the heart of such a system
must be a series of examinations for which
students can explicitly prepare, with teachers
serving as their coaches, mentors and allies.
Thinking Based Achievement, Not
Routinized Skills
Like other industrialized countries in the
nineteenth century, the United States developed two different levels of educational
expectation one for an academic elite, the
other, for the rest of the population. The
majority of students was expected to learn
Supporting Information 1
1 P 4
routine skills, simple computation, reading of
predictable texts and reciting civic or religious codes. They were not expected to learn
higher-order functions of thinking and
reasoning. These goals were reserved for
the elite, originally in separate high schools
and more recently in college preparatory
programs in our comprehensive schools.
The curriculum most Americans are exposed
to gives them little chance to learn to construct convincing arguments and to understand complex systems.
A thinking oriented curriculum for all
constitutes a significant new educational
agenda. While it is not new to include
thinking, problem solving and reasoning in
some students' school curriculum, it is new
to include it in everyone's curriculum. It is
new to aspire seriously to make thinking and
problem solving regular aspects of the
school program for the entire population,
including minorities, non-English speakers
and children of the poor. To meet the
challenge, we must have an achievement
certification system in which me examinations assess the kinds of high level competencies to which we aspire. Current forms of
testing do this very poorly.
The system of routinized rather than
thinking based achievement forms the basis
for testing theory and practice even today.
100
Three kinds of examinations can be used:
Performance Examinations. The
Olympics and the performing arts use this
type of examination to determine an
individual's qualifications. It is equally wellsuited to assess academic ability and effort.
This exam differs fundamentally from the
multiple-choice kind of test, in that it measures process as well as end product, and it
has no elements of surprise. Students taking
these exams are aware of the type of performance expected of them, and they are
able to take the necessary steps in preparation. Teachers can prepare students for the
exams, acting as coaches and mentors, rather
than adverFaries. In the system we envision,
both traditional academic and more practical
performance would be assessed. For example, practical literacy might be assessed
by asking Certificate candidates to assemble
equipment following written instructions and
diagrams; and ability to work with others in
making decisions might be, assessed by
rating candidates' performance in an economic simulation game.
Performance examinations could be
carried out either in a live setting, with a
team of judges grading specific features of
the performance and the overall quality, or
the product of the performance could be
scored in place of the live performance. The
latter option substantially reduces the cost of
performance examination, making it a viable
component of a mass assessment system.
lipportnig hybrmation 1 leC
Portfolio Examinations. This form
of examination is modeled on methods of
assessment used in the visual arts in which a
team of judges rates students' products on
several different criteria. Certain academic
skills, especially writing, are well-suited to
this type of assessment, as time based exams
impose unnatural constraints and do not
accurately capture a student's true ability.
Current experiments show that this type of
test can have direct educational value: by
working with their teachers in selecting the
best of their work for inclusion in the portfolio, students build explicit understand14 of
standards of judgment.
Project Examinations. The third form
of examination evaluates extended participation in learning. These examinations ale the
best way of assessing motivation and social
skills, because judges evaluate a record of
candidates' extended participation in a task
with real meaning and consequence in the
world. For example, students might undertake Ali extentied'applied science project
such as designing a bridge, conducting an
investigation of an aspect of community life,
or planning and carrying out a construction
project. Students would be required to
document the major steps taken, supervisors
would sign off and sate the project at designated stages and a final grade would be
determined, taking into account a whole
range of criteria.
102
Any of these examinations taken alone
would serve to provide a clear link between
effort and assessment, measurable by the
student, the teacher and_.the community at
large. A combination of the exams, depending upon the skills or knowledge to be
measured, would provide an even better
picture of a student's achievement.
A Cumulative Certification System
These examinations should be viewed as
building blocks rather than high stakes
moments of possible failure. The achievement certification system we propose should
permit students to assemble certification
credentials over a period of years, perhaps
beginning as early as entrance into middle
school. This kind of cumulative certification
has several advantages over a single point of
examination.
It helps to organize and motivate students
over a period of years. Rather than
preparing for a distant examination whose
form and demanth can be only dimly
imagined by tl-:-. 11- oi 12-year-old,
students can begin to collect specific
certifications.
It provides multiple opportunities for
success. Cumulative certificates are our
best shot at drawing in the presently
undereducated and undermotivated.
/0 3
A cumulative credentialing system, because of its transferable nature, permits
students who are not being well taught in
the mainstream educational system to earn
their credentials under other institutional
auspices.
This system avoids the problem of minimum credentialing standards becoming
functionally the maximum. Students who
complete the base certifications early in
their schooling can start working on
advanced certificates either in schools
and colleges or in workplace training
sites.
A cumulative system will avoid the phenomenon of 'examination hell' a year
or two of high-tension devotion to nothing but exam study that plagues several
couatries (such as Japan and France) that
have single point-of-exit examinations.
An Independent Examining
Organization
Credentials and certification should be
determined by an organilation independent
of school systems and free from political
influence. The Governing Board of this
organization should be broadly representative of educators, employers and the citizenry at large.. Under the Board's general
oversight, working commissions in several
knowledge and skill domains should deter1 R 7 Mlporting Injhrmanon I
mine appropriate skills a.ld knowledge for
certification standards, establish the performance, portfolio and project examinations
procedures and oversee the professional and
objective nature of the judging of these
exams.
-
I R S
Supporting litliomunwi 1 104
SUPPORTING
INFORMATION II
ALTERNATIVE PROGRAMS FOR
AT-RISK YOUTH: SWEETWATER
UNION HIGH SCHOOL, THE
.139,1T9N PCIAIWT AND THE
WEGMAN'S PROGRAM
The dropout problem and the ill-defmed and
often restrictive school-to-work transition
have spurred communities from coast to
coast to devise al*.emative programs for their
youth. Sweetwater Union High School, the
Boston Compact and the Wegman's Program
are three good examples.
Sweetwater Union High School:
Dropout Recovery
Three years ago, in a determined attempt to
reduce its growing dropout rate, the
Sweetwater Union High School District in
San Diego, California set up an alternative
system for students to acquire their highschool diplomas. Two relocatable buildings
were Set up ncxt to-the high school and
equipped with classrooms of computers and
software necessary to provide a full highschool course offering.
Sweetwater's superintendent found a
way to reverse the traditional incentives that
encourage professionals to get rid of the
least desirable students. He decided to
operate the program as a business. Ninetyfour percent ot the revenue (derived from
105
the entire state allotment for each dropout
attracted to the center) would go to the
school. The school would pay all operating
expenses including staff salaries, but the
rtmaining 'profits' would belong to the
school and could be spent at the principal's
discretion.
Today, former dropouts sit at computer
terminals, fully engaged in their studies,
well-behaved and full of hope. Many are
well on their way to receiving their diplomas. Of the most recent group of graduates,
approximately 60 percent have enrolled in
college. These are the very same students
who, a few years earlier, would have been
ejected from classrooms for disruptive
,behavior,or who would, have quietly slipped
out of school, feeling it had nothingid Offer."
The district does no recruiting for the
program. Word of mouth has produced a
waiting list of those who want to enroll.
The high quality of education the
students receive ard the flexibility of scheduling are key components of the success of
the system. Students can both go to school
1 69 Supporting Information 11
and work full-time, and can participate
any of the school's extracurricular or social
activities.
In a conventional program, the district
would have had to build a $35 million
physical facility for these students. But the
relocatable classrooms and computer equipment cost a tiny fraction of that amount, and
the program has requked no new staff. Most
important, 6,000 young people who had little
to look forward to in life now have a good
start.
The Boston Compact And Its
Commitment To Boston's Youth
The current labor market structure makes it
very difficult for low-income young people
White, Black or Hispanic to get
matched to jobs. The first roadblock they
encounter is access to information or people
concerning jobs. Too often, they and their
parents lack the personal contacts and the
resources of their middle class counterparts
that would enable them to get that first
interview.
The powerful negative stereotypes that
exist on both sides of the hiring equation
make looking for a job that much more
difficult for these youth. Employers cannot
help but be swayed by what they see in
print about inner-city youth. And inner-city
youth, especially minorities, have their own
negative ideas about downtown hiring
practices.
170
The Boston Compact, a communitywide commitment to improving the educational achievement of Boston's public school
students, has put the issue on the city's
agenda. Some of the strongest initiatives
include:
A school system commitment to measurable improvements in student attendance
and academic achievement.
A private sector commitment to employ
students in the summer and upon graduation through the Bosion Private Industry
Council.
The school-based Careers Service, which
combines the resources of the school and
business communities to create linkages
between inner-city youth and employers.
The contribution of $17 million by the
business community to a fund to aid
public education, including a 'last dollar
scholarship' program for all graduates
admitted to college.
The agreement between city high schools
and the 24 area colleges and universities
to increase the number of students going
to college and graduating.
Tiv- commitment of the Area Building
Trades Council (AFL-CIO) to increase the
enrollment in apprenticeships for Boston
high school graduates.
Supporting InjOrmation 11 4 106
A commitment to measure results carefully,
including a survey of all students in the
fall after graduation to ascertain their
education and employment circumstances.
An examination of one of the programs,
the Careers Service, shows how commitment
to youth can ease the school-to-work transition, espedally for the disadvantaged.
The Service, a joint effort of Boston's
educational and business communities,
under the direction of Boston's Private
Industry Council, employs career specialists
who work with students, teachers, staff and
employers to pair students with jobs. There
are no guarantees for employment. Both the
students and the employers must be convinced that the matches fit before any commitments are made on either side.
Currently, some 900 firms in the city
participate in the summer jobs and the
graduate hire programs. Personnel officers
work with the service's career specialists,
exchanging information and opening doors
that were formerly closed to Audents.
The results have been dramatic. In
1989, 3,316 high-school students found
summer employment at an average wage of
$6.08 an hour. That same year, 1,107 graduates were hired for permanent, full-time
positions at an average wage of $6.75 an
hour. Graduates from Boston high schools
found full-time jobs through the Careers
Service, at an average wage of $8.43 an
hour.
A comparison of the 1985 survey of
Boston graduates with BLS numbers for the
nation shows employment for 62 percent of
the White (10 points above the national
rate), 60 percent of the Black (32 points
above), and more than half the Hispanic
graduates (11 points better than the national
rate).
Employment/Population Ratios for
Class of 1985
U.S.A. Boston
Whites 52% 62%
Hispanics 43% 54%
Blacks 28% 60%
For graduates of the class of 1988, the
Boston PIC reported that 66 percent of
Whites, 58 percent of Blacks and 71 percent
of Hispanics were employed.
An analysis of wages a year and a half
after graduation for the class of 1988 by
Professor Andrew Sum of Northeastern's
Center for Labor Market Studies shows
Boston's non-college youth earning $8.04 an
hour, nearly half again as much as the $5.40
non-college high-school graduates in other
central cities surveyed by the Census Bureau.
This survey's results are important in
two ways: First, they show how much a
commitment to improving current systems
1 71
10' Supporting Inf0rmallonll
can provide students, regardless of background, with a positive future; second, they
underline the need for accessibility and
timely transmittal of data so that those
involved can see the concrete results of their
hard work and effort.
While the external partners have made
progress toward their goals, school improvement has come slowly in Boston. At the
Boston PIC annual meeting in 1988, the
business community and the mayor refused
to renew the Compact until satisfied that the
structure of the schools would improve. By
March, 1989, when Compact II was at last
signed, the leadership of the Boston Public
Schools and the Boston Teachers Union had
committed to a contract incorporating school
based managemi .it and a new accountability
system that measures individual school
performar
Reccgnizing that entry level jobs are not
enough to assure economic security, Compact II sets a goal of building links between
work and further learning &Ting Lhe four
years after high school for those students not
going to college. The first project under this
ilew effort is designed to lead to professional
certification and an associate's degree in the
health professions for students.
With technical assistance from the
National Alliance of Business, 12 cities in
addition to Boston are developing compacts
based on agreements between schools,
business and government to carefully meas172
Supporting Information II
ure progress toward improvement in education and employment for young people.
The Wegmnn's Program
Wegman's Supermarkets in Rochester, New
York offers an example of a company that
has taken up the challenge on its own. For
several years, the owners of Wegman's have
been offering part-time supermarket Os tr
14-year-old students who are identified by
the local schools as likely potential dropouts.
The one condition for employment is that
the students must stay in school to keep the
job.
A Wegman's employee works at the
school district headquarters to coordinate the
prog. an with parents and teachers, recruit
students, monitor their progress and help
Ii 1 out if they get in trouble. Employees at
the supermarkets act as mentors Tor the
students on the job and also tutor them in
their school subjects. Best of all, for any
student who succeeds in finishing school
and continues onto college, Wegman's pays
the full tuitiun. The result is that Wegman's
has single-handedly managed to create a
multifaceted and caring support structure for
the students that hinges upon the students'
continuing effort to learn.
108
Thew is no single recipe for successful
worker training. Some of the most exemplary programs in the natkiii deer-greatly in
approach, administration and scope. Some
successful experiments are being initiated by
unions in cooperation with employers and
educational institutions and by high schools
and community colleges working together.
Industry Network Training
Me Sheet Metal Industry
Training The Skilled Craftsmen
High geographic mobility characterizes the
sheet metal industry. A worker in Jackson,
Mississippi on Monday 'eoukl find hIMselt
working in San Francisco, California on
Friday of the same week. He and his employer would not expect the difference in
locale to have any bearing on his ability to
work. Formerly, it did. Due to the wide
diversity in content and quality of training
practices around the country, there was no
guarantee of consistency in work habits.
Recognizing this, the union and the
employers' association, through a nationwide
Cenective Bargaining Agreement, created a
National Training Trust Fund in 1971 to
109
research current training practices. The
Fund looked to sheet metal workers and
employers throughout the country.for ideas.
From their responses and suggestions, the
Fund devised a national apprentice training
curriculum and a loan/grant program for
equipment and facility upgrade. (The
program made monies available in interestfree long-term loans and outright grants.)
The study also unveiled some serious
shortcomings in the existing system. For the
most part, industry practice was to offer a
one-time program for -apprentices only. The
need,Eor crAntinuing ,education,and,skills
upgrading of journeymen went largely
ignored. In 1973, the Training Fund, in
conjunction with the National Center for
Research in Vocational Education at Ohio
State University, devised a `train-the-trainer'
program to raise the teaching ability of local
instructors and to introduce them to the
concept of continuous training, for apprentices through master craftsmen.
Since the start of ti.is program 16 years
ago, more than 3;000 instructors have been
trained, and many local sheet metal Joint
1 73
Supporting Infiirnunion III
Apprenticeship and Training Committees
;TATC's) now offer training beyond the
apprenticeship level. Programs include
welding, computer-assisted design (CAD)
and computer-assisted manufacturing (CAM),
indoor air quality, architectural sheet metal
and other advanced studies.
The Fund continues to closely monitor
employment requirements and 'Orecasts skill
needs for the industry's future. Growing
concerns about energy conservation have
prompted a training program for energy
management technicians and auditors.
Techricians are trained to examine the
energy efficiency of existing buildings.
Following the:prograni, they 'hAve the skills'
to retrofit structures to
efficiency and indcor air quality.
National network training programs
mmleled around-similar principles,now,exist
for six other building trades.
Joint Apprenticeship/Degree Programs
Skilled trades in other industries are taking
another approach to training. They are
structuring apprenticeship programs-to allow
apprentices to apply coursework and experience toward the attainment of an associate's
degree.
The National Joint Apprenticeship and
Training Committee for Operating Engineers,
the American Association of Community and
supporting Info, nialion 1 74
Junior Colleges (AACJC) and the Atneticw
Council on Education (ACE) are working-Ott
this dual enrollment model. The*** '
management and union committee has
reached agreement upon a general
and curriculum (including content
instructional material) for the
ships, subject to some local variation.
administrators are encouraged to concentrate
on more macro issues rather than be delayed
or limited by rigid specifications. The AACJC
provides technical support in course planning and implementation.
Colleges have been granting apprentices in tbese dual enrollment programs
Credirs 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 Industry
Since the early 1980s, the United Automopile Workers (UAW) has successfully negotigled dedicated training funds into its contracts with major auto companies.
Ford Motor Company. The National
Education, Development and Training Center
(NEDTC), located on the campus of Henry
Ford Community College, to this point has
provided training for about half of Ford's
hourly workforce.
While much of the training in technical
literacy, problem solving and teamwork for
UAW-represented Ford employees takes
IN
place after working hours, a great deal of it
is clearly linked to the training sponsored on
company time. As the company has emphasized statistical process control training for its
workers, the NEDTC haF provided courses in
remedial matit and computer_awareness
for those who need to acquire basic skills.
More than 30,000 workers have participated
in this companion training.
Since the UAW and Ford decided to
make training a strategic issue, the
company's financial profile has moved from
losses to profits. The 1988 annual report
noted: "Ford learned a pivotal lesson during
the bleak days of the'early 1980's == if the
company was to be successful it kid to focus
oil the basics of its business and engage the
full support of its employees." Ford recogni7es NEDTC as having played an integral
role in this turnaround.
General Motors. Every one of the 157
General Motors facilities in the United States
has UAW training programs in place. AC
Rochester is among the most active.
AC Rochester has undergone tremendous change in a short period of time. In
1985, AC Rochester produced carburetors.
Since then, the plant has introduced a new
production process and technology, and
now the primary product is fuel injection
systems.
/ / /
Organizational changes have followed
in the wake. The previous 112 production
classifications have been collapsed into
three. Because of this dramatic restructuring,
employees (25 percent o( whom. do not
possess a high-school education) have to be
retrained, their skills upgraded and their
versatility increased. Job-specific training is
mandatory and is offered to workers on
seniority basis. If workers experienc
difficulty completing required job s,jdll
training, alternative basic skills c rsework is
provided for them. Workers ar allowed to
repeat a training course, if n ssary, until
needed job Skill Coinkten es are obtained.
AC Rochester pays for this training .---'
using both UAW-GM funds and public
resources. Approximately 20 percent of AC
Rochester's employees are enrolled in at
least one of the program's 75 job-specific
training modules.
GED education programs (started in
1986), Adult Basic Education and English as
a Second Language programs supple.nent
job-sptcific training for approximately-680
AC Rochester workers. New York State's
Employer Specific Skills Training Grant and
Workplace Literacy funds provide training
for another 30 percent of the plant's workers.
Seven hundred and fifty workers are in
the plant's JOBS bank, a job security program created in the UAW-GM national
agreement. All JOBS hank workers as well
1 75 Alipporting Information al
- -^,-
..; ,- =.t,..._
as all active workers in the plant, can take
part in a full-time college attendance program created by AC Rochestet's Joint training
center staff. Upon completion of a GED/
Workplace Literacy Program, an active
worker or a JOBS bank worker is eligible to
entt- the full-time college program. Both
active and JOBS bank workers receive full
pay and benefits, plus up to $2,250 annual
tuition payments while enrolled in the
college program. To remain eligible, workers must obtain a minimum of 15 credit
hours per semester and be matriculated into
an associate's, bachelor's or master's degree
granting program. Approximately 50 percent
of the workers in training at AC Rochester
are enrolled in the full-time college an,
dance program.
Chrysler. The UAW-Chrysler National
Training Center, headquartered near downtown Detroit, operates eight United States
regional training centers near major Chrysler
plant locations and directs 45 different
training and joint activity programs in 41
locations in the United States.
More than 60 percent of UAW-represented Chrysler workers 1.articipate in some
kind of formal training or educational program, ranging from 'Tech Prep' basic skill
development to new technology training.
(More than 30,000 UAW-represented Chrysler
workers have participated in computer
Supporting Information III 1 7
training alone.) The National Training
Center has experimented with a number of
new training and educational techniques and
has undertaken a number of special pilot
programs in 'Tech Prep' training.
Two-PlusTwo Programs In
Technical Fields
A growing number of communities are
creating better lir.'cages betweentigh__ 4
schools and community colleges. Experimental two-plus-two' programs can be
found across the country, creating a bridge
for students who do not pursue four-year
college degrees.
A 'Tech Prep' program in North
Carolina's Richmond County School District
is an example of this link. Prior to the
establishment of the program, 25 percent of
the districes high-school students were
enrolled in college preparatory courses, and
the remaining 75 percent in general academic/vocational courses. For three quarters
of the student body, courses were outdated
and did not reflect the needs of the community.
In 1986, the district decided that the
vocational track needed attention. A 'Tech
Prep' program was created with upgraded
and revised vocational courses. These
courses reflected the demands of Richmond
employers, and they required more rigorous
academic and vocational preparation than
traditional non-college programs of study.
112
The program has been most successful.
Today, obout one third of Richmond.
students are enrolled in college preparatory
programs and another third can be found in
the Tech Prep' program. Enrollment for
Algebra I courses has increased by 42
cent, and Algebra II course enrollment has
gone up by 57 percent in just three ears.
Mathematics has not been th only area
afkcted by the system's reform. More
students are taking advanced English, social
studies and science courses, and the average
SAT swres for the district have increased 46
points. Additkmally, the annual dn)pout rate
has declined from 7.2 percent to 4.8 percent.
'The number of graduates choosing ta attend
community college has dtmbled.
1 77
I I,t Supporting Information III
SUPPORTING
INFORMATION IV:
SKILLS INVESTMENT TAXES:
FOREIGN EXAMPLES
All of the foreign competitors we studied
require firms to invest in developing and
improving the skills of their workers. These
contributions, organized as part of national
strategies for training and skills development,
generally take two forms.
Companies often directly contribute to
public employment and training services, as
in Germany, Japan and Denmark. Through
this approach, the government may organize,
oversee or directly provide the training to
those individuals needing basic or upgraded
work skills.
Firms are often required to contribute
through a periodically assessed tax or levy to
a national training fund, as in Ireland,
,. Singapore 'and Sweden. ThiS fund mity
operate as a monitored 'training account.'
from which companies can retrieve their
funds to offer some form of approved
training
The funds for these initiatives are
channeled from various sources such as
payroll taxes, general government revenue
and tax-deductible contributions, all of
which are expenditures above and beyond a
company's in-house training investment. In
every case, the goal of the national system is
1 15
to encourage companies to train, to spread
costs and ultimately to create a self-perpetuating program for continually upgrading the
skills of the adult workforce.
GERMANY
German corporations contribute a total of
nearly 3.5 percent of annual payroll to public
training and employment schemes through
joint employer-employee financed national
unemployment insurance, the national
system of apprenticeship and mandatory
contributions to local Chambers of Commerce.
In this system, employers are assessed
2.3 percent of annual payroll to the unemployment insurance fund, and eMplOyees
match their contributions. In 1988, 42
percent of this fund was devoted to training
and labor exchange programs, including
employment counseling and placement,
incentives for companies to employ and
retrain hard-to-place workers and free
training for workers who are unemployed or
facing unemployment fcr skills reasons,
Although this fund is managed by the government, the training is provided by the
I78 sr imx otng hybrmat um 11"
private sector and generally lasts trom four
months to two years. Individuals receive the
normal unemployment benefit to support
themselves during training.
Beyond this expense, German companies contribute DM 25 billion (U.S. $13.5
billion), or another 2.5 percent of payroll, for
1.7 million trainees in the apprenticeship
system. Through these apprenticeships,
companies largely finance the last two to
four years of secondary education for the
majority of German youth.
In addition to the contributions to
apprenticeships and insurance fund programs, German companies are required to
contribute to their local employers' organizations (generally the Chambers of Industry
and Commerce or the Crafts Chambers).
Seventy percent of the .-hamber budgets are
devoted to training purposes, geared particularly to those small companies that lack the
resources to train extensively in-house.
Many larger German corporations,
along with funding public training, dedicate
significant resources to their own training
initiatives. For example, Seimens AG allocated DM 470 million, or 2.5 percent of
payroll, to train and upgrade its workers inhouse in 1967.
SWEDEN
Swedish firms contribute to training by
financing the public employment and training systems and by contributing to governSupp lallng hyorma Mal /1
ment-established training funds. An employer contribution of approximately 2.5
percent of annual payroll fimaces the
National Labor Mai tset Roard (AMS), which
operates Sweden's n..,ional employment
service, manages labor exchange and provides mining and subsidized employme.lt.
This contribuuon is independent of the
unemployment compensation system, to
which companies also contribute, and of the
employer's extensive social security obligations. In 1987, Sweden spent $3.9 billion on
labor market measures kg a workforce of 4.4
million.
The Swedish government also establishes renewal funds, into which all companies of a certain size are required to contribute 10 percent of net profits. The taxdeductible contributions are placed into an
interest-free account and may be withdrawn
later to support company training that has
been approved by the government and the
local unions. Volvo, for example, utilized its
renewal fun& tc ovide up to two years of
initial training for employees when it opened
its team-style auto production plant in
Udevalla.
DENMARK
In Denmark, training fw. unemployed individuals and a substantial amount of training
for company employees is provided free of
/ /6
charge by the government through the
National Labor Market Board (AMU). While
general government revenues fund most of
this effort, employers contribute up to 600
Dkr (U.S. $82) per worker. This figure
represents a total employer contribution of
0.2 percent of annual payroll. Employees
also match the contribution. In 1988, AMU
provided 1.1 billion Dkr (U.S. $137 million)
to train 100,000 participants.
IRELAND
In Ireland, the larger companies are required
to contribute one to 2.5 percent of payroll
annually into the levy-grant scheme, creating
a fund similar to Sweden's renewal fund.
Ninety percent of funds are then returned to
the company for use in training programs
approved by the national employment
authority (FAS). The remaining 10 percent is
used for administrative purposes. FAS.
working through its industrial training
committees, assists companies in devising
their training programs and administers the
labor exchange system.
SINGAPORE
Singapore has aggressively supported training as part of its overall high prodlictivity
development strategy. The ,kills Development Fund (SDF), to which employers
contribute one percent of payroll annually, is
used by the government to partially reimburse companies for approved forms of
117
training. This includes approved apprenticeship and in-house training, external training
in recognized courses offered by accredited
institutions and particularly training in high
technology and 'economically critical' skills
(for which companies receive twice the
normal reimbursement).
The Singapore government also funds
from general revenues a number of training
institutes, often in cooperation with multinational companies.
JAPAN
Japanese corporations have a strong philosophical commitment to training, and in
many cases build and run their own schools
and training centers for the constant betterment of their workforce.
Japanese corporations are required to
contribute an average of one percent of
payroll into the National Employment Insurance Fund, which-pays for unemployment
compensation and three employment and
training programs. Of this one percent tax,
about one third to one half is used to finance
the three employment and training initiatives.
In addition, employer tax funds are
combined with federal, prefectural (state)
and, to a lesser degree, municipal general
revenues to finance the Ministry of Labor's
Human Resources Development Bureau,
16 U
Supporting Infonnation IV
which administers the Capability Development Program. This program supports
nearly 400 public or vocational training
facilities, provides direct assistance to firms
in creating their own in-house training
capability and helps develop and implement
a set of industry based skill certifications and
examinations.
Each of these countries requires companies to promote the skills development of
the national workforce. In each case, the
mandatory corporate contributions are in
addition to the amounts that companies
spend to train their own employees.
Mpporttng InPrmation IV 118
SUPPORTING
INFORMATION V
FINANCING OUR PROPOSALS
The, United States spends more than $300
billion each year in Federal. state and local
funds on public and private education at all
levels. This Commission's recommendations
constitute a system of quality controls to
assure we are getting the most for these
dollars.
What The Current System Costs
Before estimating the costs of these recornmendations, the Commission estimated the
amount of public funds currently being spent
on the 16- to 19-year:old population. These
monies include the last two years of high
school, two years of college, governmentsponsored training programs like the Job
Training Partnership Act and employment
assistance like the Targeted Jobs Tax Credit
and Unemployment Insurance.
Using 1987-1988 data (the last school
year with the most comprehensive enrollment and revenue information available), we
estimate that between $34.2 and $36.5 billion
of public funds were spent on the operating
expenses of education and training programs
and for employment assistance for civilians
in this age group.
The Focus Population
Age Total Population Post-Secondary Enrollment Grades 11-12 Enrollment
16-19 14,548,500 2,903,737 5,795,822
1 82
I I() ,SupportIng hyormanon 1
Public Expenditures:
Education Operating Costs And Training-Related Programs
For The 16- To 19-Year-Old Population Public Expenditures
($ 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 0.4
State 6.2 6.3
Local 0.5 0.6
Pell Grants 0.4 - 0.6
Private Institutions 0.4 0.6
Federal 0.1 0.1
State 0.1 0.2
Lo:al < 0.1
Pell Grants 0.2 0.3
Employment and/or Training Assistance:3
yrpA Programs
(including Block Grants, Summer Youth Program,
2.2
Dislocated Workers, Job Corps, Native
Americans 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 3
Supporting Information V 120
In calculating these costs, the Commission counted only those public funds associated with current fund operating expenses
for 16- to 19-year-olds. Capital outlays,
interest on debt, research money, and both
iestricted and unrestricted grants and contracts were excluded.'
As the above charts indicate, the bulk
of public cost is attributable to state and
local funds for junior and senio,' years of
public high school and to state expenditures
for the two years of public higher education
immediately following high school.
Youth Centers
Bringing disenfranchised groups into an
education system, any system be it
public high school, Job Corps or new Youth
Centers will require additional funds.
In calculating a cost, the Commission
made several assumptions. First, the Youth
Center participants may have special needs
that result in higher than average per pupil
expenses. Thus, we increased by 20 percent
the 1988 per pupil average foi grades K-12
to arrive at a Youth Center per pupil expenditure of just under $5,100.
Second, because the majority of dropouts leave school at age 16 or 17, we assumed that the average length of enrollment
in a Youth Center would be two years.
Once a person has attained the Certificate of
Initial Mastery, the individual would pursue
121
the various options available through work
or more advanced technical and professional
training.
1989
Age Population5
Dropout
Rate
Annual
Youth Center
Costs°
(in billions)
16 3,351,000 20% 3.4
3,534,000 20% 3.6
18 3,676,000 20% 3 7
19 3,662,000 20% 3.7
To date, attempts at solving our nation's
dropout problem have been expensive,
frustrating and largely unsuccessful. Our
continued failure means greater costs for
society:
Fifty-two percent of high-school dropouts
are unemployed or receiving welfare
assistance. Fer this population of Americans, welfare benefits and lost tax revenues totaled $75 billion in 1987:
More than 80 percent of pregnant teenagers are high-school dropouts."
Sixty percent of prison inmates are highschool dropouts. The annual cost to
house an individual in prison is more than
$16,000.9
1 4
Su/porting hilonnation I
The Commission believes that while the
sums of money it proposes for Youth Centers are not small, the costs are minimal
compared with the incalculable benefits to
be derived from a total population of 'workready' individuals. The proposed system
makes it very difficult for individuals to slip
through the cracks meaning that nearly
100 percent of our young people should
acquire the basic mastery skills necessary to
lead productive work lives.
Funding Technical and Professional
Certificates
If we had paid up to $5,000 for every 16-.
17-. 18- and 19-year-old to pursue education
beyond the Certificate of Initial Mastery in
1987-1988, the cost would have amounted to
S72.7 billion (versus roughly $36.5 billion
spent under the current system).
The Commission has suggested that the
National Center on Education and the
Economy conduct a detailed analysis of this
subject and explore ways to ensure that all
students have the financial means to pursue
this further education.
Given the anticipated economic benefits
to society. a strong argument can be made
that general revenues should be used to
finance this type of guarantee. The original
G.I. Bill is one example of how an initial
government investment can produce mev.surable benefits for many years. At a cost of
about $14 billion, the G.I. Bill provided
training and education for more than 7.8
Supporting Information l"
million World War II veterans. A recent
congressional study concluded that, of those
who used the entitlement to attend college,
the ratio of benefits to costs was a minimum
of 5 to 1 and as high as 12.5 to 1. The study
also found that the additional taxes paid by
the college educated veterans during their
working lives more than paid for the program.'°
Another example of a high ratio of
benefits to costs is found in quality preschool programs, such as Head Start. These
programs demonstrate that for every federal
dollar spent, $3 to $6 is saved in future social
services, welfare, unemployment and
remediation."
Other funding strategies could be used
to make the proposal 'revenue-neutral.'
Individual Training Account: Individual Training Accounts (ITAs) could be
established that would combine a voucher
system similar to the G.I. Bill with a savings
and equity based financing system analogous
to Individual Retirement Accounts (IRAs). 12 Students would make tax-deductible contributions and withdrawals to purchase training
and education. Most importantly, negative
account balances would be permitted while
an individual is enrolled in an education or
training program; repayments to the account
would begin once the individual began
working and would be spread over time.
1 P 5 122
Training Surcharge on Personal
income: A plan similar to the Individual
Training Account could permit an individual
to repay a four-year government-backed
education and training voucher over the
course of one's working life. Payments
would take the form of a small surcharge
(less than one percent of personal income)
on one's annual tax return.
Both the Individual Training Account
and the Training Surcharge would allow
young people to purchase education and
training when they need it and repay the
debt later. Also, both plans could be used
throughout orw's lifetime as an incentive for
further training. Employers as well as
employees could make contributions to an
Individual Training Account.
Skills Development Fund
The Skills Development Fund will be financed through the federal training trust
fund. This trust will not require any General
Fund expenditures situ:. it will be created
with revenues collected irom the assessment
on every employer who chooses not to
invest in employee training One percent of
the curient United States payroll v,ould
produce between $28 and i0 billion annually. Because a small percentage of companies already spend ene percent or more on
training and more can be expected to do the
same as a direct result of the assessment, the
trust fund will total less than this amount in
the first year.
I2
Other Proposals
We recognize that our other recommendations have fiscal implications, including those
related to Technical and Professional Certification, Employment and Training Boards and
the Certificate of Initial Mastery But, in
relation to the costs just described, the
amounts are small and likely to be supported
by reallocating currently available resources
and drawing on the resources of the private
sector.
An example of how the Technical and
Professional Certification system can operate
is the Advisory Committee for Trade Negotiations and its nem (ilk of smaller industry
specific groups.
In the Trade Act of 197,4, Congress
established a private sector advisory committee system to ensure that trade policy reflected United States commercial and economic interests. The system consists of
approximately 40 committees with a total
membership of approximately 1,000 advisors, who serve on policy, technical, sectoral
and functional ach isory committees. Each
advisor represents a different industry or
commodity group.
All advisors, who are nominated by
their peers, serve a finite term without
compensation for their time or expenses.
With the exception of the initial selection
process and the staff support of a few
1 R 6
Supporting Information
government employees, there is no other
federal role and no budget outlay. The
committees meet regularly, are self-governed
and are considered prestigious and effective.
NOTE&
1. 1987-1988 public school enrollment for grade 11
was 2,935,615; 1987-1988 public school enrollment
for grade 12 was 2,680,843. Using the official 1987
and 1988 per pupil current expenditure averages for
grades K through 12 of $3,977 and $4,243 respectively (based upon average daily attendance) one
can calculate a range of $23.1-$24.7 billion of total
spending for grades 11 and 12. The Commission
notes that per pupil expenses for secondary school
are greater than those for the elementary grades
(due to the costs of senior high school laboratories,
vocational programs and smaller class sizes). In
addition, some private secondary schools receive
revenues from Federal, state and local government
sources; however these amounts are minimal and
data are not available. Because the published data
do not satisfactonly measure the size or place of
enrollment. the Commission assumed that most
individuals benefiting from public vocational
monies would he countxl in high school or in twoyear community college programs.
Sot ace National Centerfor Education Stanstks.
'Digest of Education Statistics - 1989
2 The Commission counted all 18- and 19-year-olds
enrolled in all institutions of higher learning. In
1987-1988 this number was 2.696.652 or 21.1
percent of total post- secondary enrollment (Tho e
mdbiduals younger than age 18 who were enrolled
in these institutions totaled 207.085 or about 1.6
r rcent of all higher education students )
1 7
S I ipport I Ijo 011a/ion
The Commission applied all federal, state and local
appropriations, including Pell Grants, to the
proportion of enrolled 18- and 19-year-olds (by
public, 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 Departments of Labor, Agriculture, Treasury and Health
and Human Services estimates of the proportion of
16- to 19-year-olds being served by government
prngrams. These proportions were then applied to
total program budgets.
4. By counting only government appropriations for
current student expenditures, the Commission
realized it was losing some federal, state ind local
funds that ultimately do contribute to student
instruction, such as state incentive grants to studentsand local scholarships. Due to the lack of detailed
data. the Commission chose to underestimate rather
than overestimate the figures.
5. 1989 unpublished data from the current population
survey. the Bureau of Labor Statistics, United States
Department of Labor.
6. The Commission used the United States average
dropout rate (as officially defined) of 20 percent to
calculate the anticipated costs of the Youth Centers.
The high-school graduation rate is another measure
that can be used. In 1989. the nation's high schools
graduated ahout 71 percent of those students who
entered secondary school, according to the United
States Department of Education. Based on this rate,
the cost of educating 29 percent of today's 16-yearold population in Youth Centers (with an annual
per 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 Multicultural
Prevention Resources Center. San Francisco and
published as an article -A Nation in 0:Ms: The
Dropout Dilemma.- by Byron N. Kunisawa in NM
Today. January 1988.
124
8 Ibid.
9. 1988 data from the National Institute of Corrections
Information Center, Boulder, Colorado.
10 "A Cost-Benefit Analysis of Government Investment
in Post Secondary Education under the World War
II G.I Bill," a staff analysis prepared for the use of
the Subcommittee on Education and Health of the
Joint Economic Committee December 14, 1988
11. "The Preschool Challenge" by Lawrence J.
Schweinhart; High/Scope Educational Research
Foundation. 1985
"Changed lives The etTects of the Perry Preschool
program on youths through age 19," Monographs of
the 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 Society
by Pat Choate and,' K Imger 1986
1 8
/2 Slipp011111,k
Acknowkdgements
'
! ,
ACKNOWLEDGEMENTS
We thank Marc Tucker for the vision he
displayed in defining the agenda on which
this Commission has worked and the Board
of Trustees of the National Center on Education and the Economy for providing us the
opportunity to address that agenda.
We acknowledge with gratitude the
financial support extended to the prcject by
the Carnegie Corporation of New York. the
State of New York. Towers Perrin. Cresap/
Telesis. SJS, Inc. and The German Marshall
Fund of the United States which made the
entire effort possible. None of these organizations is responsible for the statements or
%iews expressecl in this report.
We thank ,loan Wills, the Project Manager, v, ho shepherded the meetings of the
Cormmssion and staff and drew together the
strings of hat became an unusually wide
ranging enterplie ith admirable skil: and
tenacit.
Thanks are due, too, to the mar
organizations that contributed their executi% es to the Case Team research effort during
an eight-month penod and supported their
expenses w hen in the field. Without their
aid. it w oukl hae been impossible to mount
the research program. hich in many ways
has giN en this Commission its distinctive
character.
And, we owe our thanks, of course, to
the case study_research team members
themselves, whose prodigious effort on three
continents provided a unique perspective.
Though technically on leave from their
sponsoring institutions for part of this period,
virtually all found that they simply had to
add these time-consuming tasks to a full-tin-e
job, which they did without complaint and
with great dedication.
The staffs of the National Center,
Cresap/Telesis and SJS, Inc. provided support beyond the usual call of duty without
complaint and with a high degree of professional skill, for which we are extremely
grateful.
We would also like to express OW
appreciation to the thousands of people in
the United States and abroad who allowed
us to come and talk with them in the course
of our research. Their hospitality and openness made it possible to form a picture of a
ery complex reality that could have been
developed in no other way.
190
Commission on tbe
Skills of tbe American
Workforce
At knouledgemerit%
04+0
Ap endkves
NATIONAL CENTER ON
EDUCATION AND THE
ECONOMY
BOARD OF TRUSTEES
Mario M. Cuomo, Honorary Chairman
ernor
State ot New York
John Sculley, Oa mut n
Chairnun. President and Chief Executive Offker
Apple Computer. Ink
James B. Hunt, Jr.. Chairman
Partner
Pov ner
R. Carlos Carballada, Timsurer
Vice-Chancellor
NO% York State 13(tard of Regents
President and Chief Ewcutne Officer
Central Trust Company
Marc S. Tucker, President
National Center on Education and the Econoim
Anthony P. Carnevale
Vice President of Nati(inal Awn-,
and Chief Ec( in( nmst
American Sok ietv t( it Training and 1)ev el(tpment
Sarah H. Cleveland
Law Student
Yale Law School
Hillary Rodham Clinton
Partner
Rose Law Firm
133
Thomas W. Cole, Jr.
President
Clark Atlanta University
VanBuren N. Hansford, Jr.
President
Hanshird Manufacturing Corporation
Louis Harris
Chief Executive Officer
Louis Harris and Associates
Barbara R. Hatton
Deputy Director
Education and Culture Program
The Ford Foundation
Gullbert C. Hentschke
Dean
Scluxil of Educati( in University of S(mthern Calihirnia
Vera Katz
Speaker of the House
Oregon House of Representatives
Thomas H. Kean
President
Drew university
Arturo Madrid
President
The Tomas Rivera Center
1 92 Board of Trustees
Ira C. Magaziner
President
SJS, Inc.
Shirley M. Malcom
Head
Directorate of Education and Human Resources
American Association for dle Advancement
of Science
Ray Marshall
Chair in Economics and Public Affairs
L.B.J School of Public Affairs
University of Texas at Austin
Peter McWakers
Superintendent
Rochester City School District
Richard P. Mills
Commissioner of Education
State of Vermont
Philip H. Power
Chairman
Suburban Conimunications Ca mporation
Lauren B. Resnick
Director
learning Research and Do ek Tment Center
I 'nit ersit, of Pittsburgh
David Rockefeller, Jr.
Vice Chairman
Rockefeller Family & Assouates
' 1.-', ) .i. 0
ih,tild f.)/ Il 11,slees
Adam Urbanski
President
Rochester Teachers' Association
Robert F. Wagner, Jr.
President
New York City Board of Education
Kay R. Whitmore
Chairman, President, and Chief Executive Officer
Eastman Kodak Company
13,4
COMMISSION ON THE
SKILLS OF THE AMERICAN
WORKFORCE
BIOGRAPHICAL SKETCHES
Ira C. Magaziner, Chair
ha C. Magaziner is currently President ot S1S.
Inc.. a consulting firm providing assistance to
groups addressing economic and sotial issues
facing America m the 1990 s. Preciously. he was
Founder and President of Telesis, an knternational
consulting firm specializing m corporate strateg)
and economic de% elopment policy. Mr
Magaziner continues to be a consulting associate
ith Telesis Prior to founding Telesis in 1979.
Mr Magaziner worked tor the Boston Consulting
Group During his career, he has led hundreds
ot comprehensne strateg studies for companies
based m ten countries He has also led ..tudies
tor gm ernments in S eden. Ireland, Canada,
Great Britain and Israel. Mr Magazmer graduated from Brown Unnersity and attended Ba
College th ford as a Rhodes Scholar Author of
numeious books, Mr Magazmers latest book is
Me Went U ar Itmule the Global Business Battles
.sbaping America's Funin, He is a member ot
the Board of Trustees of the National Center on
Education and the Ecorvimy
William E. Brock, Co-Chair
E Brock is Senior Partner ot The Brock
Gmun, a Washington, D C. consulting firm
specializing in international trade, human resources and ince,ment strategies Senator Brock
was a member ot President Reagan's Cabinet
sen ing from 1981 to 1985 as United States Trade
Representati, e. the President's chief trade policy
ack iser and ihtemational trade negotiator. and
served from 1985 to.198' as Secretary of Labor
As Secretar. he initiated the landmark study of
orkforce and workplace demographic trends
;-3
entitled Workforce 2000 Win* and WorkersPr
the 21st Century, achieved major pension reform
legislation and reinvigorated efforts at labormanagement cooperation. Senator Brock soled
four terms in the House of Representatives until
he was elected Senator from Tennessee in 1970
In 1977, Senator Brock served as Chairman of the
Republican National Committee. Senator Brock
currently serves on President Bush's Education
Policy Advisory Committee, is Chairman of IT. S
Labor Secretary Dole's Commission on Achieving
Necessary Skills (SCANS) and is Chairman of the
National Endowment for Democracy. He is also
a Serior Counselor at the Center for Strategic and
International Studies in Washington D.0 , Chairman of the International Advisory Committee ot
the Unit ersity of South Carolina and President of
the National Academy Foundation
Ray Co-Chair
Ray Marshall holds the Make and Bernard
Rapoport Centennial Chair in Economics and
Public Affairs at the L. B.1, School of Public
Affairs at the University of Texas at Austin and
serced as President Carter's Secretary of Labor
As President Carter's chief advisor on labor
matters, Mr Marshall administered laws and
programs in employment and training, labor
statistics, labtir-management relations and other
matters affecting the nation's workforce Mr.
Marshall serves as a member of the Advisory
ommittee to the National Science Foundation's
Directorate for Science. and Engineering Educa1 94
Bio,Lvapbr( (r/ sket,
non and is a member of the Boards of the
Anwncan Academy of Work and Learning, the
Quality Education for Minorities Network and the
Interactive Training Institute. He is a Trustee of
Carnegie Corporation of New York and served as
a Carnegie Forum Advisory Council member.
Among his recent publications IN Unheard l'oices
1.cthor and Economic Policy in a Competitive
World (1987) Mr MaNhall is a mernber of tlw
National Center's Board of Trustees
Robert M. Atkinson, H
Director of Academk Pnigrams tor the School of
Business and Indnstry at Florida A Ni University
in Tallahassee, Fk Robert NI. AtI:m.on is a
member of the liciard of Directors for the Strategic Business Imestois Devdopment Corporation
w here he served as Chairman of the Board from
1985 to 198' Pri or to obtaining his current
pc)siticin in August 1989, lw was Director of tlw
Dicision of Management Sciences at the Schocil of
Business and Industry from 1986 to 1989 From
1982 to 1986. lw was an Associate Professor in
the Division of Managernent Sciences, From 1974
to 1982, Mr Atkinson was an Assistant Professor
of Iliismess Administration at the College of
CAmmwrce and licismess Administration at the
Unicersity of Illinois Mr Atkinscin was a First
Lieutenant in the Signal Corps. United States
Army
Owen Bieber
Owen Bieber is President of tlw t ntcd Automobile Workers In 1980, he was elected Intermitic nu! Vice P-esident. lie was elected President
of the International limon first in 1983 and again
in )986. AN President, Mr. Bieber has promoted
gle..tel job security tor industrial workers by
helping to pioneer contractual app( )aches, such
as the creation of job banks, and has impkmented number of innmative education
pn)grams Mr. Bieber began his career with the
Brographu al Meek ho
UAW in 1949. He is a Vice President and an
Executive Council member of the AFL-CIO and
serves on the Boards of the National Association
for the Advancement of Colored People, the
United Way of America and New Detroit. He is a
member of the Michigan Governor's Commission
on Jobs and Economic Development, the Economic Alliatwe of Michigan and the President's
Advisory' Committee for Trade Negotiations.
Edward J. Carlough
Edward J Carlough is General President of the
Sheet Metal Workers' International Association,
AFL-CIO He was elected President of the union
in 1970 and has been reelected without opposition at each successive convention. He has
helped create the National Training Fund for
apprentices and journeymen, a Stabilization
Agreement to hdp unemployed workers and the
Natiomil Energy Management Institute. Prior to
beconung President, he served 13 years as the
Sheet Metal Union Research Director and Organming Director Mr. C.arlough became a Sheet
Metal Workers' apprentice in New York City in
1949. Currently, he serves as Vice President of
the AFL-CIO Building and Constniction Trades
Department and a member of the General Board
of the AFL-C10
Anthony P. Carnevale
Anthony P. Carnevale is tlw Vice President of
National Affairs and Chief Emnornist for the
American Society for Training and Devdopment
(ASTI)) in Alexandria, Virginia. From 198,
througi- 1988, Mr. Carnevale was Chairman of the
Fiscal Policy Task Force fi)r the Council on
Compefis veness From 1981 to 1982, he was com(iderator for the White HoUNC Conference on
Productivity In 1978, Mr Carnevale served as
the Government Affairs Director tor the American
195 136
Federation of State, County and Municipal
Employees (AFSCME). Prior to his work with
AFSCME, Mr. Carnevale served in the Congress as
a staff member in the U.S. House of Representatives and the Senate Mr. Carnevale's government
service also includes work in the U.S. Department of Health, Education and Welfare. Mr
Carnevale was a co-author of the principal
affidavit in Rodnguez v. San Antonio, a landmark
Supreme Court case arguing for equal educational opportunity. Mr Carnevale has authored
several books and monographs on training in the
workplace Mr Carnevale holds a Ph D. from the
Maxwell School of Public Affairs of Syracuse
lniversity He is a member of the Niard of
Trustees of the National Center
Paul J. C muette, Jr.
Paul j Choquette. Jr is President of Gilbane
Building Company in Providence, Rhode Island
Appointed President in 1981, he is the sixth
consecutiv e family member to sene as President
since the wmpany's founding in 18'3 Befiire
assuming his present role, Mr Choquette served
as General Counsel, Vice President and Executive
Vice President at Gilbane Currently. he also
sen es as Chairman of the Board of Gilbane
Properties. Inc , a real estate development
subsidiary of Gilbane Building Company Mr
Choquette serves as a Trustee Emeritus of Brow n
ersity and Vice Chairman and member of the
Board of Direcuirs of the Rhcide Island Port
Authcirity and E«inomic Devekipment Corpiranon He is also a past Chairman of the New
England Council Prior to jciining Gilbane, Mr
Cluxjuette served as legal munsel to then Rhode
Island Governor John 11 Chafee kir two years
Richard Cohon
Richard Cohon is President of C N Burman
Company in Paterson, New Jersey Mr Cohon
also is an ahisor to the President's Commissuin
on Vocational Edue anon Ile serves as a member
t
of the Board of Directors of the National Strategy
Information Center and the United Skills Investment Corporation and is a national advisor of the
Center for New Leadership. Mr. Cohon is a
member of the Association for Manufacturing
Excellence and the Young President3' Organization. He is Chairman and Founder of YPO's
Manufacturing Project and Chairman of the
National Center for Manufacturing Sciences'
Education and Training Committee.
Badi G. Foster
Badi G. Fa:!er is President of the AEtna Institute
for Corporate Education, a position he has held
since' its inception in 1981. He is responsible for
comorate education programs in human resources development, management, education,
bumness strategy and organization effectiveness.
Mr Foster also oversees the Institute's management and consulting activities, educational
technology and research and AEtna's educational
involvement with outside organizations Prior to
pining AEtna, Mr Foster held several positions at
Harvard University including: Director of Field
Experience Program, Graduate School of Education, Chairman, Hispanic Study Group; Assistant
Director, J F. Kennedy Institute of Politics; and
Visiting Professor in Afro-American Studies He
has published a number of articles on business,
education and community development and
served in several public service capacities at the
Federal. state and local government level.
Thomas Gonzales
Thomas Gonzales s Chancellor of the Seattle
Community College District VI, the Iargest of 23
community colkge districts in the State of
Washington. As Chancaor, he also serves as
Chiet Executive Officer. From 1981 to 1989. Dr
Gonzales served as President of Linn-Benton
Community College in Albany. Oregon, and from
q 6
111().e:Mphic skett hes
1981 to 1989 was Adjunct Professor at Oregon
State University, School of Education. He was
appointed by Oregon's Governor to serve on the
Board of the State Apprenticeship and Training
Council from 1985 to 1986. Prior to these
experiences, Dr. Gonzales was Campus Vice
President of the Community College of Denver,
Auraria Campus, Dean of Instruction at San Jose
City College and a consultant to the Wyoming
Higher Education Council. Dr. Gonzales is a
member of the American Association of Community and Junior Colleges (AACJO and is Vice
Chair of the AACJC Commission on Improving
Minority Education. He was a former member of
the AACJC Board of Directors and Chair of its
membership committee. While in Oregon, Dr.
Gonzales served on the Private Industry Council
(PIC), and now serves on the PIC Board in
Seattle, Washington.
Rear Admiral W. J. Holland, Jr., USN
(Retired)
.Ierry Holland is President of the Armed Forces
Communications and Education Association
Educational Foundation, which sponsors scholarships and provides professional training in the
disciplines related to defense command, communications. Intelligence, computers and information management systems. Rear Admiral HoLand
served on active duty for 32 years, primarily in
nuclear submarines. He was a teacher and
supervisor of training at every grade including
command of the Navy's largest technical training
facility, the Submarine School. He was the
United States Naval Academy's first Director of
Professional Development, a department he
founded. Rear Admiral Holland has written on
submarine warfare. national strategic policy,
technical training and maritime affairs.
Blograpbu. al Sleek lw,
.197
James R. Houghton
James R. Houghton is Chairman of the Board and
Chief Executive Officer of Corning Incorporated.
Since joining Corning in 1962, Mr. Houghton has
served as European Manager, Vice President,
General Manager, Director and Vice Chairman
and was elected Chairman in 1983. Houghton is
past Chairman of the Business Council of New
York State and a member of The Business
Roundtable, Council on Foreign Relaiions and the
Business Committee for the Arts. He is also a
Director of Dow Corning Corporation, Metropolitan Life Insurance Company, CBS, Inc., J.P.
Morgan Company and Owens-Corning Fiberglass
Corperation. He serves as a Trustee of the
Corning Museum of Glass, the Corning Glass
Works Foundation and the Metropolitan Museum
of Art in New York City.
James B. Hunt, Jr.
James B. Hunt, Jr. served Ps North Carolina's first
two-term Governor, holding office from 1977 to
1985. Under his leadership, the North Carolina
School of Science and Mathematics, the Microelectronics Center of North Carolina and the
North Carolina Business Committee for Educat, in
were all established. Governor Hunt chaired the
National Governors' Association Task Force on
Technological Innovation, the Education Commission of the States and its Task Force on
Education for Economic Growth that produced
Action for Excellence, one of the major education
reform reports of 1983. Now an attorney in
private practice with the firm of Poyner and
Spruill, he was a member of the Carnegie
Forum's Task Force on Teaching as a Profession,
chaired the Planning Group that chartered the
National Board for Professional Teaching Standards and is currently Chair of the National
Board. He is also a member of the National
Center's Board of Trustees.
138
John R. Hurley
John R. Hurley is Vice President and Director of
Corporate Training and Educational Resources for
The Chase Manhattan Bank, Previously, he was
Director of Training at the Insurance Company of
North America and has held senior level human
resource and marketing positions at the Xerox
Corporation. Early in his career, he was a public
school teacher and school administrator. Currently, he is active on the Council for Continuing
Education and is the President of the American
Society for Training and Development
John E. Jacob
John E Jacob is President and Chief Executice
Officer of the National Urban League. Inc., a position he has held since 1982. Author of a
weekly newspaper column. "To Be Equal." which
appears in more than OM newspapers. Mr. Jacob
has served as Executit e Vice President of the
National Urban League. Inc from 1979 to 1981
and President of the Washington, D C Urban
League from 19"5 to 1979 He also acted as
Exec utive Director of the San Diego I 'rban
League wnn 1970 to 1975 Mr Jacoi, !legan his
Urban Leapue career in 1965 as Director of
Education .ind Youth Incentn es at NI 71. in
Washington, DC During his tenure, the Urban
League :las offered yotmg people various
workforce training, skills deN elopment and
employability programs and has worked directly
ith school systems to improt e the school-tow ork transition Mr. Jacob currently sen es as
Chairman of Howard Unn ersity 's Board of
Trustees and on the Boards of Local Initiatives
Support Corporation (USC), New York Telephone, Continental Corporation and Coca-Cola
Enterprises
Thomas H. Kean
Thomas H. Kean is President of Drew University
in Madison, New Jersey. Prior to assuming the
presidency, he was Governor of New Jersey from
1981 to 1989. In 1987, Governor Kean chaired
the Republican Governors' Associatior He was a
member of the Executive Committee of the
National Governors' Association, Chairman of
NGA's Task Force on International Education and
is a member of the National Board for Professional Teaching Standards, He has also served as
Chairman of the Education Commission of the
States and was a member of the Carnegie
Forum's Task Force on Teaching as a Profession
Before being elected Governor, Governor Kean
served ten years in the New Jersey State Assembly holding positions of Minority Leader. Majority
Leader and Speaker. In 1984, Governor Kean
was named Man of the Year by the New Jersey
NAACP. Before bucoming involved in politics,
he was an American history high school teacher.
He is a member of the National Center's Board of
Trustees.
William H. Kolberg
William H Kolberg is Piesident of the National
Alliance of Business, a position he has held since
1980 Prior to joining the National Alliance of
Business, he was Vice President for Public Affairs
ot the Union Camp Corporation, President of
Kolberg 8t Associates and consultant to The
Business Roundtable Before entering private
industry, he served as Assistant Secretary of Labor
and Administrator of the Employment and
Training Administration from 1973 to 1977 He
was the Assistant Director of the Office of
Management and Budget in the Executive Office
of the President from 1971 to 1973. Mr Kolberg's
range of experience includes policy planning and
administration, national leadership roles in
employment and training, education and welfare
reform and authorship of national workforce
198
By,graph ;cal sleek lieN
quality initiatives. In 1970, he was the recipient
of the Distinguished Achievement Award of the
U.S. Department of Labor. He is the author of
Preparing Manpower Legislation and the editor of
The Dislocated Worker.
William Lucy
William Iiicy was elected International Secretary/
Treasurer, the second highest national office, of
the more than one-milhon member American
Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO, in 1972. A civil
engineer by trade, Mr Lucy is Vice President of
the AFL-CIO Industrial Union Department, the
Maritime Trades Department and the Department
for Professional Employees. He serves on the
Boards of the African-American Institute, Americans for Democratic Action and Commission on
Working Women. He is a member of the National Leadership Conference on Civil Rights and
the National Labor Advisory Council of the March
of Dimes Foundation He is President and a
Fountkr of the Coalition of Black Trade Unionists
(CIITU), an organization of union leaders and
rank-and-tile members dedicated to focusing on
the needs of Black and minorit group wo-kers
Margaret LA. ..lacVicar
1arg.1 rei MacVicar holds the Cecil and Ida Green
Chair in Education at the Massachusetts Institute
ot Technoh)gy, w here she is Dean for Undergraduate Education and Professor of Physical
Science From 1983 to 198'. she vas Vice
President ot the Carnegie Institution of Washington In 19-9 she was Chancellm's Distinguished
Protessm at the Uniersity of California at
Berkelt.1 Dean MacVicar is Chair of the National
sciene hmnalti( n s Advisory C()Illinittee on
Education and Human Resources and Co-Chair ot
the National Council on Science and
Thographic al Sketches
Technology's Project 2061 of the American
Association for the Advancement of Science.
Professor MacVicar was a Trustee of the Carnegie
Foundation for the Advancement of Teaching and
a member of the Carnegie Council on Policy
Studies in Higher Education. She is a member of
the Corporations of Charles S. Draper Laboratory
and Woods Hole Oceanographic Institution, a
Trustee of Radcliffe College and the Boston
Museum of Science, and a Director of Exxon
Corporation and W.H. Brady Co. Dean MacVicar
is a Fellow of the American Physical Society and
holds patents and is published in the field of
electronic materials
Eleanor Holmes Norton
Eleanor Holmes Norton, Professor of Law at the
Georgetown University Law Center, was appointed by President Carter as the first wonun to
chair the Equal Employment Opportunity Commission As EEOC Chair, Professor Norton
administered Title VII of the 1964 Civil Rights Act,
the Equal Pay Act, the Age Discrimination in
Employment Act and Section 501 of the Rehabilitation Act and is highly regarded for her work in
deveh)ping equal emphyment law and policy.
Professor Norton is an authority on labor force
and employment matters. anti-discnmination
policy, family, education and poverty concerns.
She has co-authored a book entitled-Sax-Discrimination and the Late. Causes and Remedies.
She has been named one 01 the One Hundred
Most Important Women in America. has received
53 honorary degrees and serves on the Boards of
the Rockefeller Foundation, the Martin Luther
King, Jr. Center for Social Change, Metropolitan
Life Insurance Company, Pitney Bowes Corporation and the Stanley Works Company.
140
Karen Nussbaum
Faren Nussbaum is the Executhe Director of
9to5. National Association of Working Women.
thi leading membership organization lot the
nation.... 20 million office workers. 9to5 combines
activism, research and public education to win
rights and respect for women who work in
offices A former secretary herself. Ms.
Nussbaum has been organizing office workers
since the early 1970's ancl helped found one of
t!te first 9toi chapters in Boston in 1973. Today
9to5 has cner 14.000 members with 26 chapters
nationwide. She also sen es as President of
District 925. a national union for office workers
under the Sen ice Employees International Union.
AFL-C10 Ms Nussbaum has co-authored
Solutions jiff the Neu. Work Rove jOr a Aeu. Socail Contract and 91o5. The WOrking
innan s Guide to Office Surma!
Peter J. Pestillo
Peter( Pestillo is Vice President of Corporate
Relations and Dnersitied Businesses for the Ford
Motor Company He has responsibility for the
Company's Employee Relations. Public Affairs
and Grwernmental Affairs Staffs. and for Ford
Aerospace Corporation and Ford New Holland,
Inc. Mr Pestillo is a member of the 13(iard Of
Direcuirs of Rouge 'steel Company and Par.k
Ridge Ccirpcirati(in, parent firm cif Hertz Cairpora- non He rece.ied his law degree from
Georgetmn Unnersity and is a graduate of the
Achanced Management Program at Han ard
'nn ersity
Philip H. Power
Philip II Po- r is Founder. Owner and Chairman of the Board (if Suburban Communications
On-poi-anon. a group ot c(inimunity newspapers
thniughout Michigan and around Cincinnati,
Ohio Mr Power serves on the board of Directors ot the Mkhigan Grow th Capital Foundation,
the Power Foundation. the World Press Frc nii
Committee and is a Trustee of the National
Center on Education and the Econonly V.- is a
member of the University of Michic4an's Boa,1 of
Regents, chairs the Michigan Job Trai'ting 0 ordinating Council and is a member of Governcr
Blanchard's Cabinet.Council on Human I -.vestment and Commission on Jobs and Economic
Development. Mr. Power is widely recognized
for his highly regarded reorganization of
Michigan's lob training programs, as well as for
his development of an integrated labor market
policy for the state.
Lauren B. Resnick
Lauren B. Resnick is Director of the Lc ming
Research and Development Center and Professor
of Psychology and Education at the University of
Pittsburgh. In 1986, Professor Resnick was
President of the American Educational Research
Association and from 1979 to 1980 was President
of the American Psychological Association's
Division of Educatiimal Psychology. She has
been a member of the National Research
Council's Commission on Bektvioral and Social
Sciences and Education, the Board of Trustees of
the Cirnegie Foundation for the Advaocement of
Teaching and the Educational Testing Service.
Ms. Resnick currently serves on the Mathematical
Sciences Education Board and on U. S. Labor
Secretary Dole's Commission on Achieving
Necessary Skills (SCANS). Professor Resnick is
the founder and editor of Cognition andInstruction. She is a member of the Board of Trustees
of the National Center.
2 o ii
Biographical Sketches
Kjell-Jon Rye
Kie II-Jon Rye is a teacher at Bellevue High School
in Bellevue, Washington. A teacher in this school
since 1984, Mr. Rye established the Technology
Edo:anon Program, which includes instruction in
the following areas: robotics, lasers, computers,
aerospace and biomedical technology, construction, manufacturing, communications and transportation technology and mechanical, electronic,
architectural and civil engineering. He is an
advisor to the Congressional Office of Technology Assessment on issues relating to technology
Ind education of youth. Mr. Rye was a member
of the Washington State Advanced Technology
Advisory Board, which ad..ised the Governor on
policies relating to the impacts of advanced
technology on education. He is currently a
member of the Technology Education Advisory
Council of the International Technology Education Association and sits on the Editorial Board of
Educational Digest. He is currently on leave at
the Center for Educational Renewal at the
Unii ersny of .Washington orking ith Dr. John
I Good lad.
Howard D. Samuel
Howard D Samuel is currently President of the
Industrial Union Department, a semi-autonomous
mganiiation a:;sociated with the AFL-CIO. He
has had a forty-year career in the labor movement. Prior to his role at IUD, Mr. Samuel was
Deputy Undek Secretary of Labor for International
Affairs. In that position, he directed the Labor
Department's Bureau of International Labor
Affairs and w as responsible for international
atm files. Mr Samuel has seri ed on various
commissions including: the National Manpower
Athisory Council, me Coinnission on Population
Grmth and the American Future and the
President's Commission on Compentheness. He
2
t I/ hcs
series as Trustee of the Brookings Institution,
Martin Luther King Center, Work in America
Institute and the Council on Competitiveness and
is a member of the Defense Science Board.
*John Sculley
John Sculley joined Apple Computer, Inc. as
President 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 the
personal computer industry, focusing on technology for business and education. Prior to joining
Apple, Mr. Sculley was President and Chief
Executive Officer of Pepsi-Cola Company. He is
the recipient of numerous awards, including
Advertising Man of the Year, the Joseph E.
Wharton Business-Statesman Leadership Award
and UCLA's Anderson Graduate School of
Management Exemplary Leadership in Management Award. Most recently, he was chosen CEO
of the Decade for Marketing by the Financial
News Network Mr. Sculley serves an the Board
of the international Foundation for the Survival
and Development of Humanity, an East-West
`codper5tile efforfon "hutiian"rigfits, ectuC-aticin,
arms reduction, energy and the environment. He
also serves on the SEI Board at the Center for
Advanced Studies and Management and on the
Board of Overseers, both at the Wharton School,
on the Board ot Advisors at the Graduate School
of Business at Stanford University and on the
Board of Trustees at Brown University. Mr.
Sculley is the author of the best selling autobiography, Odyssey, Pepsi to Apple. Mr. Sculley
series as the Chairman of the National Center
Board of Trustees,
1)2
William J. Spring
Since 1984. William J. Spring has been the Vice
President ot District Community Affairs at the
Federal Rest_ e Bank of Boston. Prior to his
current role. Mr spring .isa consultant to the
Federal Reserve Bank of Boston and President of
the Boston Prn ate Industry Council from 1983 to
1985 w here he w:is extensively imohed in
setting up the Boston Compact. From 19--
through 1981, Mr Spring w as the Associate
Director ftir Emphiment Policy with the tIomestic Polic; Staff at the White House. He is the
author and co-author of numerous articles on
mph); ment policy as seen in 71w Aim,' 104
Times Magavne. Me Aim,. Republic, 71w Washington Post and The Baylor, Globe Mr Spring
authored a working paper for the National Center
entitled, -From Solution' to Catalyst. A New Role
for Federal Edutation and Training D'illars."
Anthony.). Trujillo
Anthon J Trujillo is superintendent of the
Sweetwater [Akin" Nith Schoiil District in Chula
\ ma, Californ.a Nun to be«nning a Superintendent. Mr Trujillo was a teacher, print pal and
administrator and has taught at the unnecsity
.1e% el. Mr Trujillo sened as Chairman of the
Educational Management and Evaluation Commission tor the California State Board of Edut anon from PI'S to 1980 and Chairman of tlw State
Ctimmission on Sclusil GMernance and Manage- ment from I 984 to 1985 Currenth, he is .1
member 01 the San Diego United Wa; Board of
Duet. tors
Marc S. Tucker
\tart S Tut ker is President of the National Center
on Edmation and the Ett non 1k. as printi- pal author of the Center's report, 7b Seettre Our
Funny The &demi Role hi Ilducation. Prior to
the establishment of the National Center in
Jarman 1988. w as Executne Director of the
Carnegie Fiirum on Edthation and the Et onomy
Mr. Tucker sened as Staff Director and principal author for the Forum's report, A Nation Prepared.
'leachers for the 21st Century. Mr. Tucker serves
as a member of the Board of visitors of the
College and Graduate School of Arts and Sciences at Wake Forest University. the Board of
Visitors of the University of Pittsburgh's School of
Education and the Board of Directors of the
National Alliance of Business Center for Excellence in Education. Mr. Tucker is also a Professor of Education at the University of Rochester.
Laura D'Andrea Tyson
Liura D'Andrea Tyson is Director of Research at
the Berkeley Roundtable on the International
Economy (BRIE) and Professor of Economics at
the Unix ersity of California at Berkeley She was
a visiting professor at Harvard Business School
during the 1989 to 1990 academic year. Prior to
joining the faculty at the University of California.
she was an Assistant Professor of Economics at
.Pnuceton University. She f a Trwifiber of the
Cuomo Commission on Trade and Competitiveness. the Leadership Council of Rebuild America
and the Council on Foreign Relations. She has
served as a consultant to the President's Commission on Industrial Competitiveness. Council on
Competitneness, Western Governors' Association,
World Bank. the Office of Technology Assessment and RAND Corporation Ms. Tyson has
written numerons books on the economics of
competitiveness including: .4inerican Industry in
International Competition (1983), Me Dynamics
(?f7rade and Employment (1988) and Politics and
Pmductwity 71w Real Story qf Houjapan ItOrks
(1989). She is currently working on a book on
trade policy for the InAtute of International
Economics in Washington, D.0
2 P 2
niugltip/M. il/ Sktic bes
Kay R. Whitmore
Kay R. Whitmore is Chairman, President, and
Chief Executive Officer of Eastman Kodak
Company in Rochester, New York. He began his
career at Kodak as an engineer in film manufacturing in 1957. Mr. Whitmore serves as a member of the Board of Dflectors of The Chase
Manhattan Corporation, The Business
Roundtable, the Business Council of the State of
New York, the University of Rochester and the
International Museum of Photography at the
George Eastman House. He is Chairman of the
Industrial Management Council of Rochester. He
is also a member of the National Center's Board
of Trustees.
Alan L Wurtzel
Alan I.. Wurtzel is Chairman of the Board and
former Chief Executive Officer ot Circuit City
,Stores., 1ndet his.leadership: Circuit City has
become the lacgest and most profilahre SpeCialty
retailer of bran&pame consumer electronics and
appliances in the United States with sales in
excess of $2 billion. Prior to joining Circuit Oty
Stores, Mr. Wurtzel was a Washington, D.C.
attorney From 1986 to 1988, Mr. Wuitzel served
as President of Operation Independence. a
nonprofit organization whose goal is to assist
Israel io become economically independent.
Currently he serves as a member of the Board of
Visitors of Virginia Commonwealth Uni4rsity,
Trustee of Oberlin College, Director of Office
Depot (the nation's largest office speciality retail
store chain), Washington Project for the Arts and
the Greater Washington Educationa! Telecoramu-'
nications Association, w hich oNrates the public
radio and television stations in Washington. D.C.
2 P 3 ,
Biographical Sketcho
144
COMMISSION ON THE
SKILLS OF THE AMERICAN
WORKFORCE
COMMISSION ASSOCIATES
DavidJ. Barram
Vice President
Corporate Affairs
Apple Computer, Inc.
Eugene C. Baten
Consultant
AEtna Institute for Corporate Educatum
Ellen Bravo
Associate Director
9to5, National Association of Working \X omen
!ewe S. Lercbe
Education Projects De%elopment Manager Ford Motor Compan
David Luther
senior Vice President. tairpi nate
Director-Quala
Owning inciwpinated
John R. McCarthy
senior IC, President and Mecum-
)111(w.tte Relatum,
Eastman Kt Klak compallN
Frank Musick
Duo. it n
special PH netts
tilted Automobile Vc ()ricer,
Stephanie G. Robinson
Director
Education and Career Development
National Urban League, Inc.
Freeman Smith
Director
State and Local Government Relations
Corning Incorporated
Billy J. Tidwell
Director of Research
Washington Operations
National, I irban league,. Inc.
James D. Van Erden
Administrator
Office of Work-Based Learning
S Department of Labor
2n 4
45
ASSOCI4410
COMMISSION ON THE
SKILLS OF THE AMERICAN
WORKFORCE
CASE STUDY RESEARCH
TEAM AND STAFF
Apple Computer, Inc.
Lucille Ueltzen
Manager, Apple University Operations
Center for the Study of Human Resources
University of Texas at Austin
Robert Glover
Research .eissociate
The Chase Manhattan Bank
Charlotte Pollard
Vice President, Learning Resources
Laura Coyne
Second Vice President, Learning Resources
Cresap, a Towers Perrin company
Eugene R. Smoley. Jr.
Vice President
Eastman Kodak Company
Susan Connolly
Director of Education Development
National Alliance of Business
Betsy Brown Ruzzi
Senior Project Manager. Youth and Education
Programs
Pete Carlson
Director, Economic and Policy Analysis
National Center on Education
and the Economy
Joan L. Wills, Project Manager
Vice President
Jana L. Carlisle
Staff Associate
Tina Isaacs
Staff Associate
Larry A. McKnight
Netw At Administrator
Ann Marie Potte.
Staff Assistant
Dennis Lyons
Director of Technical Education Resources Patrina Smith
Administrative Av+istant
International Brotherhood of Electrical
Workers
Ken Edwards
Director of Technical Training
Case ctudy Team and Staff 20 5
Cathy D. Spangenburg
Staff Assistant
Susan Sullivan
Director, Administrative Services
246
Sheet Metal Workers' International William J. Maroni
Association Consultant
Jerry Olejnkzak
Administrator. National Training Fund Debra Moms
Administrative Assistant
Palnwr C Pitcher
Consultant
SJS, Inc.
Karen Banijas
Assi mate
Sarah H Ck Adam!
Ass( x. late
Christine I icenan
Associate
scan Rot ha
Ass(wiate
Marione Tarme
Ass( x. late
Chip oung
Aoc late
Telesis/Cresap, a Towers Perrin company
Edv,ard J Caron, case kain Ci)ordina fiw
Managing Consultant
,tephen V" coon
Consultant
Cnthia Isabella
Administrame Assistant
nn M. Margherio
Research Associate
Norene M. Rickson
Consultant
Denise Rkketson
Administratie Assistant
Deborah Rosen
Research Associate
TPF&C, a Towers Perrin company
Karl F. Price
Principal
United Automobile Workers/Chrysler
National Training Center
Linell Burrell, Jr.
Grant and Training Specialist
U.S. Department of Labor
Ambrose "Red" Bittner
Chief of National Priigram Caxirdination
and Training Group
Ihircau ot Apprenticeship and Training
Janet Pease Moore
Exec uticc Assistant
Office of Work-Based Learning
2 6
1 4- taw Study:team and Mall
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National Center on Education and the Economy Publications Quantity Cost
Caminisston on the Skills if the American Workfiree
America's Choke: high skills or low wages!
The Report gthe Commtsston on the Skill, cf. the American Workfarce
ISM 0-962706,3-0-2
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Alan Gartner and Dondhy Kerzner Lipskr
Training America: Strategies for the Nation
Anthony P carnecale and Janet Johnston
Higher Education and American Competitiveness
Ernest A trilion
From "Solution" to Catalyst: A New Role for Federal Education
and Training Dollars
ilham I. Spring,
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A Nation Prepared: Teachers for the 21st Century
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