Investing In Education Makes Business Sense
As government, businesses, and families struggle to survive this economic downturn, we would be wise to look forward, as well, to position ourselves for the recovery to follow. Massachusetts can draw a valuable lesson in successful recovery from the recession of 1973-75.
At the time, that recession was the longest and most severe of the post-World War II era, and the economic contraction was accompanied by double-digit inflation.
The double whammy of “stagflation” stressed companies and institutions far more than the ordinary vicissitudes of the business cycle, producing disruption of a kind we had not seen again until this past year.
Bay State Impact
Massachusetts suffered very badly in the mid-1970s; that period marked, in key respects, the commonwealth’s low ebb. Traditionally one of the wealthier states, Massachusetts saw its per capita income erode to only 3.6 percent above the national average in 1976, which meant, with high taxes and a high cost of living, Bay State residents were not as well-off as most Americans.
But five years later the “Massachusetts Miracle” was under way, and the state’s economy was so strong that it powered through the next recession — quite serious nationally — with barely a hitch.
Moreover, despite subsequent ups and downs, the fundamental gains of the late 70s and early 80s have held: our per capita income in 2008 was 27.6 percent above the national average.
So how did we do it?
The answer is, above all, education. Massachusetts, long the leader in education, had fallen off the pace by the 1970s.
At the start of the decade, the proportion of adults with four years of college was actually lower here (9.7 percent) than in the nation (10.7 percent). Shortly thereafter, a series of investments began to pay off.
There was a national reform movement focusing on science and math (what we now call the STEM disciplines).
There were significant local reforms, too, most visibly the state’s promotion of regional school districts. Our public higher education system, tiny in 1960, was expanded over the next 15 years to approximately its current configuration, and the state scholarship program was created. In 2000, one-third of Massachusetts adults had four-year college degrees, compared to less than a quarter nationally.
And this time?
As Lt. Gov. Timothy Murray mentioned at the Associated Industries of Massachusetts annual meeting earlier this month, the Patrick administration is committed to shielding education programs from the worst effects of the fiscal crisis. This is commendable, and we should keep in mind that we are not protecting the status quo, but a dynamic process of continuous improvement.
Standards-based reform, which is working, should be extended, not just preserved. Federal stimulus funds can be used to advance change, not just to keep things as they are. We can follow up on the successful experiments in charter schools, and infuse 21st century skills into our curricula to reinforce the economic impact of education. Some reforms, such as further regional initiatives and standard teacher contracts, can actually save money.
Massachusetts is, again, the best educated state in the union; that is the key to our past success. Our future depends upon maintaining that position, and continuing to work toward global leadership.
Richard Lord is president & CEO of Associated Industries of Massachusetts, a nonprofit, nonpartisan employer association of 6,500 Bay State businesses and institutions.
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