Why the stimulus needed to keep education

PNC typically interviews eight job candidates to find one who can pass the math test required for certain jobs at its Eastwick operations center across from the airport.

"It's costly to any corporation when you have to interview that many people to fill one job," Bill Mills, president of PNC Financial Services Group for Philadelphia and South Jersey, said yesterday.

PNC's experience is an example of why advocates say education spending belongs in the $789 billion economic-stimulus package being negotiated in Congress: Ineffective education is a drag on productivity.

C. Kent McGuire, dean of Temple University's College of Education, welcomed the money set aside for education in the compromise between House and Senate leaders - reportedly more than $90 billion - but cautioned that much more thinking needs to go into how to make the U.S. education system meet 21st-century needs.

"It's not a strategy, but it is implicit recognition that these are areas in which we have to invest," said McGuire, referring to the education spending in the bill.

McGuire and other experts said that certain kinds of education spending, such as the support to states that could prevent teachers from losing their jobs and money for school modernization and repair fit the need for short-term economic stimulus.

Spending on infrastructure is considered by many to be a legitimate part of the stimulus package because it puts people to work quickly while generating long-term productivity gains.

Likewise, spending on education is another sort of infrastructure spending because it, if done wisely, builds a productive workforce for the future that can generate faster economic growth, said Eric Thompson, an economics professor at the University of Nebraska.

Some analysts point to U.S. history to back up this argument.

They say that periods of fast U.S. economic growth, measured by increases in per capita gross domestic product, are usually preceded by substantial gains in the overall education level of the populace.

For example, within a generation of the widespread development of the public school system in the second half of the 19th century, the country had the largest literate workforce in the world, said Abby Joseph Cohen, senior U.S. investment strategist at the Goldman Sachs Group Inc.

Subsequently, between roughly 1890 and the start of World War I, the United States became the most productive nation in the world, Cohen said.

After World War II, the initial GI bill diverted nearly eight million veterans into higher education, sparing them from the dismal job market.

"It got them off the streets, so they weren't competing for the few available jobs, and it increased their skill levels," said Bob Wise, president of the Alliance for Excellent Education in Washington and former governor of West Virginia. The nation had "30 years of unprecedented economic growth afterward," Wise said.

But in the last decade or so, the percentage of 25- to 29-year-olds who completed high school has stagnated to about 86 percent, and the college completion rate has risen only modestly, according to the National Center for Education Statistics.

McGuire, of Temple, said what really matters is that the pace of educational advancement in the United States is falling behind that of other nations, particularly India and China.

It is not enough to simply make sure more students make it through college, which is the goal of the proposed $500 increase in the maximum Pell grant and the effort by Gov. Rendell to legalize video poker to raise money for tuition grants, one expert said.

"I think that there is this sort of default belief in this country that going to college means you are going to be better off no matter what you do. The reality is that colleges were not set up for a post-industrial age," said Julian Alssid, executive director of the Workforce Strategy Center, a nonprofit in New York. "We have a lot of people with college degrees who are not prepared to step into the workforce."

Some economists counter McGuire's view that modernizing schools is an important part of improving performance.

"I don't think there is much evidence that if you spruce up our buildings, our kids will learn more and be better prepared for the job market," said Gerhard Glomm, an economics professor at Indiana University in Bloomington. "You might get more bang for the buck if you hire smart teachers."

That is where PNC is putting some of its money, in teachers, funding a professorship in early-childhood education at Temple as part of a $100 million, 10-year commitment to boost education for children from birth to age 5.

"I think it's so important," Mills, of PNC, said, "but also the real challenge is that it doesn't have a pay back for a very, very long time."