
          Change Through Education 
          By Marshall, RayRay Marshall
          Vol. 11, No. 1, 1989, pp. 1-6
          
          EDITOR'S NOTE: "Change Through Education" was the 
theme of the 1988 Annual
Meeting of the Southern Regional Council, held in November in
Atlanta. The keynote speaker for the event was Dr. Ray Marshall,
president of the Southern Labor Institute, vice president of the
Southern Regional Council, chairman of the National Action Council for
Minority Achievement, professor of economics and public affairs at the
LBJ School of Public Affairs at the University of Texas, and former
U.S. Secretary of Labor. His edited remarks appear
below.
          QUALITY EDUCATION FOR ALL OF OUR people is the single most important
problem that the country faces. We have great difficulty getting
quality education, but if we don't it is going to cause us a great
deal of trouble, not only the trouble in individual lives which we are
already having but also a lot of trouble for the country, a
continuation of our decline. If I had to bet, I would bet that that is
what we are going to do.
          Quality education is especially critical today because fundamental
shifts have occurred in the economy in which most U.S. workers earn
their livings.
          We are losing our competitiveness in the international arena. It is
in the high techs as well as the smoke stacks. Our real wages were
lower in 1988 than they were in 1973. Our income distribution is more
unequal than at any time since we have been keeping numbers. That is a
very serious matter.
          One of the things that we did in this country and in other
industrialized countries after the period of industrialization was to
change the income distribution. Preindustrial income distribution was
like a pyramid-a few people at the top, most people at the
bottom. Industriali-

zation and democracy made income distribution more
like a diamond than a pyramid-most people in the middle.
          That strengthens democracy.
          The economic system that produced this change was able to use the
abundant natural resources of this country within a mass production
system that was based on one principle economies of scale. We were
able to improve our standard of living easily because of economies of
scale which made possible by a large internal American market using
our abundant resources.
          When the system broke down during the 1930s, we coupled it with
Keynesian economics to keep it going. The big problem in the 1930s was
that we knew how to produce a lot more stuff than we could sell. The
basic idea behind the New Deal was to put some money in people's
pockets so that they could buy the output of all that industry, making
possible a higher standard of living. Then we coupled that with
unionization of the plants where you were getting this economy of
scale and the right of people to organize and bargain collectively,
causing the non-union industries to treat their people better than
they would have otherwise. A lot of working people got middle-class
living standards for the first time. Therefore we got this
diamond-shaped income distribution.
          During the 1970s and 1980s, income distribution is becoming more
like an hourglass. We are polarizing, the rich are getting richer and
the poor are getting poorer. That is not good for democracy.
          Workers particularly are a lot worse off. All you have to do is
isolate particular groups of workers to see the extent to which that
is the case. I think you can make the case that the democratic system
is strained by polarization of income distribution. I guess it was
Franklin Roosevelt who said we would not have enduring prosperity in
this country unless all of our people shared in it. I think that still
is the case. Most people do not share in the benefits of the
system. Eighty percent are worse off now than they were in 1973. In a
nutshell, part of what has happened is political, the trend to make it
hard for workers and low-income people to use the political system to
maintain this diamond-shaped income distribution. That is what the
conservative trend is about. Lower-income people with limited economic
power historically have been able to use their political power to
change the situation. In recent years the ability to use the political
system to offset economic weaknesses has diminished a great deal,
though there is more to it than just politics.
          Fundamental changes are underway in the world's economy that
greatly alter the way we have to do business if we really want to
change income distribution and we really want people to have
relatively good incomes. Instead of economies of scale and the easy
improvements in our standard of living which that made possible, we
now have to be a lot more concerned about competitiveness and
productivity and quality and adaptability and adjusting to change. In
other words, the days of easy improvements in our standard of living
are over. We have had easy improvements because we had all these
natural resources. Natural resources are, now relatively
unimportant. Technological changes have broken the connections between
natural resources and output.

          Economies of scale depended heavily on a monopoly on the internal
market. We had the American market all to ourselves which meant that
we could produce lots of cars or whatever and could build up such
output that we could improve our standard of living relatively
easily. We have lost that. Internationalization means that we no
longer even have the American market. Our ideological commitment to
free trade means that we are no longer willing even to use that market
to cause other people to open their markets. Therefore our
competitors, like the Japanese, are able to have the second-largest
market all to themselves and get economies of scale and hit our
market, which we no longer have to ourselves. They have a strategy, in
other words, and we do not. We have a passive policy, they have an
active policy.
          There is even more to it than that. New technology means that
spreading output over large physical units-producing a million units
with the same plant and therefore reducing the cost per unit-is no
longer economically and technologically viable. We now have technology
that makes possible flexible manufacturing and targeted markets. At a
Ford plant I went through some months ago, they have different
products coming down the line. That would have been impossible twenty
years ago. Now they tell a computer to make some red ones and some
green ones. They do not have to retool. They reprogram. That is a very
different way to produce. That whole production system requires that
we do things differently than in the past.
          Another reason that previously we were able to get relatively easy
improvements in our standard of living was what economists call
interindustry shifts. Many of us probably improved our income by
moving out of agriculture and into urban manufacturing. Personally, I
was born in north Louisiana in an area that had very low productivity;
I am one of the few people born in the twentieth century that also
lived in the nineteenth, because it was very low income. The movement
into manufacturing improved everybody's standard of living. Now the
movement is out of high value- added manufacturing and into
services. In other words, the interindustry shifts are now against
us.
          So what is the way out? The only way we are likely to be able to
maintain relatively high incomes is to have a high-quality work
force. This production system requires people to be well-educated and
well-trained and in very different ways. The essence of our problem is
that we are having to adjust from a system that was very different
into one where we do not know exactly what to do. We do not know how
it works its way out. What we do know is that education will be a very
important determinant of our ability to move out of that system.
          Essentially the information technology has made mass amounts of
information available to us. Unless we know what to do with it, it is
not doing us any good. We have to learn to analyze information, to
think, to solve problems, to deal with change, to learn, to
communicate with great precision. We have to have people who can be
innovative and creative in order to be able to deal with this
system. That is the essence of our challenge.
          THE OLD SYSTEM of education was a dual system. It was a two-track
system. It did not cause us too much damage in the mass-production,
goods-producing world. You had one system for the elite.
          They had the elite schools, elite families, elite jobs, elite
learning systems. Those people were taught to think and to be
creative. They had good teachers and small classes and did
traveling.
          Then you had the system for most of us. In fact, the mass
production system was imposed on the schools. The assumption was that
you did not have to think to put bolt number thirty-five on the left
rear wheel. You were taught to do routine things. You were taught by
rote, not to deal with change. The basic idea behind the system was to
get some low-paid teachers-and that is the reason we started using
women-who would be blue-collar workers in the system, and then you
would get some men to run the system like you do a factory. They would
be the elites. The basic idea was to turn out a standardized product
that could go to the fields and go into the factories.
          Now, it is a false assumption that that you can continue to have
one system for the elites and another system for the rest of us-that
is the really important challenge we have to face. The only way to
keep a world-class economic system--and to strengthen the democratic
system--is to see that all 

of our people have quality education. Not
just the elites.
          That is the basic case.
          WHEN YOU SAY that education is a requirement to be world-class, and
that education has been important and improves people's condition,
some will immediately say, "Nonsense, we have always had people who
have been well-educated." When I was responsible for the Job
Corps, 20 percent of the high school graduates coming in were still
illiterate. Therefore how can you say they're educated? The first
thing you have to recognize is that there is a difference between
schooling and education. Education is ideas, skills and knowledge, and
not time that you spend in the school.
          When we think about education, we must think about all of the
learning systems that go with the school. One is the family. One of
the reasons that family income is the greatest predictor of
educational achievement is because some families can be efficient
learning systems and some cannot. Poverty does not cause you to have
an efficient learning system. Therefore the presence of poverty hurts
learning, which is why interventions like the Women Infants and
Children program and Headstart can compensate for the inefficiencies
in poor learning systems, poor families.
          One of the false distinctions we make is between health and
education. Education improves health. People's ability to think, to
make decisions, to read, to appropriate health technology will make it
possible to improve their condition. One of the greatest predictors of
dropout is the birth weight of babies when they are born. We can
assign a probability that it is going to cause higher dropouts. The
education of the mother has a lot to do with the education of the
children. All the early childhood work suggests that the kind of
education and nurturing young children get will determine the ability
of those children The main point of that is a lot of kids are behind
because they come from poor families when they start to
kindergarten. Therefore we have to think of overcoming that with
interventions that improve health. Probably the best way to break the
inter-generation of poverty is to concentrate on the education and the
health care of the mothers, so that they can then do a better job of
educating their children. A lot of your basic learning traits, I am
told by the experts in this matter, are fixed by the time you are
three to five years old. So if you have not had a good learning
experience up until then, you're likely to be in big trouble. 
          Little kids come into this world as expert learners. They are
little scientists. They are busily stating hypotheses and checking
them and getting the data and learning is fun. They are very efficient
at it. Something happens when we get them into first grade that tends
to make it un-fun. It makes it hard and no longer challenging.
          Another important learning system is communities-the reinforcing
that kids get. Some kids come into the world being told by their
families that they are smart, that they can learn, that they are
programmed for success. Poor kids come into this world programmed for
failure. They will tell you you cannot learn. They will track you when
you get into first grade if you are the wrong color. They will call
you things like, "educable mentally retarded."
Therefore you communicate to the kid that you cannot learn and
therefore 

we will keep you here, we will give you schooling, but we
will not give you education. Then you get the reinforcement of that
from the community structure, whereas the elites get reinforcing that
they can make it, they are smart, they are destined for the elite
work.
          One of the most important learning systems that tends also to
perpetuate the elitist system is the corporate classroom. There are
eight million students in American corporations. Corporations spend
$220 billion on them. About eighteen companies will now give you a
degree. The main people who get those learning chances in those
corporations are white males. The least chances go to black males and
the middle chances go to women, black, white or brown. Tony Carnivales
the director of the American Society of Training and Development says
that eighty-five percent of what we need to know in order to improve
our incomes during our lives comes from work.
          Therefore we need to think of all these learning systems.
          IN SPITE OF THE FACT that we have had a two-tier system, education
has always been an important cause of improvements in income and
standard of living. But it is becoming even more important. In this
new kind of world that we are in, it will no longer be possible for a
person with relatively little education to make a good living. We will
no longer get economies of scale. People will no longer be able to go
to work in the big factory or get a highly-unionized job that will pay
a middle-class income even if they only have six years of
schooling. In this kind of world education becomes much more important
than ever before. Why? Part of it is the internationalization of the
economy which puts a premium on productivity and quality and ability
to adapt to change. Part of it is the competitiveness of the
international economy.
          What does competitiveness mean? It means to me, unlike most
economists, how we operate in such a way that will make it possible
for us to maintain and improve our incomes. To most economists
maintaining income is not important. It is how do you clear your
markets that is important. We have cleared our markets since the early
1970s by cutting our income. We have put everything on sale and have
lowered real standards of living as a result of that. We have delayed
the cut during the 1980s with heavy debt. Since 1980 the debt per
worker in the United States has gone up from about $6,500 to
$18,000. In 1985 the average worker was owed $1,000 dollars by
foreigners. Today we owe foreigners about $5,000 per worker. And the
amount we owe is rising rapidly.
          In a different context that means that since 1980 we have improved
our consumption per worker in this country by $3,500 to $4,000. We
have improved our production per worker just over $1,000. Where did we
get the rest? We borrowed it and we used up our capital. We are eating
our seed corn. We have delayed the reductions in our standard of
living which will come unless you can figure out some way of never
having to pay your debts. When we start paying, we are going to take
the rest of the cut that we need in order to maintain our standard of
living.
          There is only one way to avoid it. You either cut your standard of
living or you improve your productivity, improve your quality, improve
your ability to adapt to change and to innovate.
          It comes down to being able to develop and use the leading edge
technology. Why? Technology is in two categories. One is
standardized. Technology really means ideas, skills and knowledge
embodied in equipment. The equipment is unimportant. We destroyed
Germany's equipment but they came back because the thing that was
really important was ideas, skills and knowledge. Once we perfected
the manufacture of the automobile that standardized technology will
seek out low wages. It will not be done in a relatively high-wage
country. It becomes a commodity it can be exported. Therefore what we
have to do in order to improve our income and maintain it is to
constantly be innovating which means to have people who can develop
and use the leading edge technology. We also have to have supportive
public policies. How are we doing with respect to all of that? Not
very well. We have probably the best top half of the work force of any
major industrial country and the worst bottom half of the work force
of any major country. It is the bottom half that we have to
concentrate on that will cause us trouble.
          Why do we have the best top half? We have the elite schools. Our
colleges and universities are still world-class though we can lose
that if we aren't vigilant. We still have a technological lead and
since you learn by using the technology we have been able to benefit
from that. We have benefited from the immigration of well-trained,
well-educated people into the United States when we were the highest
standard of living country in the world. We are now about fifteenth in
our real wages. We have a much lower standard of living than Sweden,
Switzerland and Germany therefore we cannot expect to enrich our pool
by pulling on people from those countries.
          The bottom half is the way it is because most of our schools are
mass production schools. Racism and elitism perpetuate this system. We
have undemocratic public policies and the most challenging of these
things besides trying to root out racism and discrimination is that we
probably have the poorest school-to-work transition system of any
industrialized country. That is where most minorities are
located. Since minorities are a rising proportion of our total work
force it is a very serious problem for the country. Half of our youth
is not college-bound. Twenty million young people. We spend about
$5,000 on each one of our college students and almost nothing on the
people who are not college-bound.
          What we need to do of course is to reform the system. School reform
is very important and since that is well understood I will not say a
lot about it except that the key to reform is to get good teachers,
give them status and pay, give them the freedom to teach, and give
them the resources to figure out what needs to be done. Just like we
need to reform our factories and management systems in order for them
to be more competitive.
          THEN WHY DON'T we? A lot of myths keep us from doing it.
          An important myth is that we can make it with a two-tier education
system, that we do not have to give quality education to all of our
people because we never have and we have done all right in the 

past,
so why should we do it now.
          The bottom line is this. In this economy people will either be
assets or liabilities. Uneducated, untrained, unhealthy people will be
a liability. Trained, educated, healthy, motivated people will be an
unlimited asset. We cannot afford poor education; it is no longer a
moral question.
          Another reason you cannot make it with two-tier systems is that
this technology is unique. The information technology is
ubiquitous. It will be everywhere. You will not escape it. The idea
that somehow you can go into services and you will not need it does
not realize that the information technology will be used in the
services as well as in any other place. I think we have a lot of work
to do to convince people that we need quality education for all of our
people.
          The second myth that we have to deal with is equally pervasive in
this country and has deep roots. It is that educational achievement is
mainly due to innate ability and some kids cannot learn. Therefore,
why try? We have had polls where people really believe that. All of
the scientific evidence is that anybody can learn. It is mainly hard
work that causes educational achievement not innate ability. I think
the evidence of that is so overwhelming that we ought not to have to
spend a lot of time on it.
          The third myth that will cause a lot of trouble is from a lot of my
colleagues in higher education who will make the following argument:
They will say, "In a highly competitive world we cannot sacrifice
excellence for equity. In order to maintain our position of excellence
we cannot have quality education for everybody."
          That is a very serious error and very dangerous for a variety of
reasons. One, everybody can learn so the whole idea that excellence is
incompatible with equity is a false dichotomy. The only way you can
argue that is to argue that some people cannot learn. There is no
evidence for that. Second, a failure to provide quality education will
cost the elites dearly. It will also cost the country dearly. They
diminish their own quality of life by failing to deliver quality
education for everybody. Educated people themselves will actually not
be very well educated if they are elitist. A person who is a racist
has a serious literacy problem and is not well educated. Therefore we
owe it to those people to help educate them. A multicultural,
multiracial society has tremendous advantages. It also has serious
problems. The advantages are higher quality of life, greater
prosperity, stability, creativity which is one our strong suits. The
downside is racial and ethnic conflict, prisons, using up a lot of our
resources in order to try and preserve the peace and therefore to
greatly diminish the quality I think it is also terribly important for
everybody to see that we are in this together in this
country. Regardless of whether you accept my moral values you have to
accept of making the proposition of making a virtue of necessity. We
are a multicultural, multiracial society. We are not going to change
that. Therefore we had better do everything we can to maximize the
positives and minimize the negatives of that. We are like a team. If
some members of our team cannot play then we are going to be in
trouble. Therefore I conclude that we will not have educational
excellence without educational equity.
          The fourth of these arguments is that it costs too much to provide
educational equity. Well I can demonstrate to you and anybody that
wants to debate is that it costs you too much not to. It costs us like
$30,000 to $35,000 to keep somebody in the Texas state prison
system. Ninety percent of our inmates are illiterate. We could make
them literate for a lot less than $30,000 a head. I figure I could
make them literate for less than a thousand. Therefore it is just bad
business not to do that.
          We have to overcome the mentality that sees the price of everything
but the value of nothing. We have to cause people to see that this is
an investment, not a cost. Therefore we will make money on the
deal. We have made money on the deal investing in our education.
          The fifth of these arguments is, "All right you've convinced
me," some people will say. "Therefore let's make some marginal
changes in the school system and that will solve the problem." You
will not do it. Marginal changes by definition will be neutralized. We
have got to make radical changes in the system, not marginal
changes. The system we have got is geared to the plantation and the
large mass-producing industry. It's as obsolete as those
are. Therefore we need to change it. Finally, some people will say,
and this is one of the hardest to overcome politically these days,
they will say, "All right maybe you have convinced me but we do not
really have any choices. We have got to live with the system. You
cannot change the system. It is too deeply entrenched. Therefore
nothing works. You cannot get an intervention that is really going to
have any effect on anything." Then you will have people tell me
what I believe to be the truth. We hear all of these exemplary
programs. We also hear all about the exemplary schools. I have yet to
see an exemplary school system anywhere in the country. Therefore our
challenge is how do we translate these exemplary interventions into
systemic changes that will really make a difference.
          I think we could do that. I also believe that it is not true that
none of these interventions work. We can cite all kinds of
interventions. I have mentioned the WIC, Headstart, Job Corps,
Creative Rapid Learning System, the G.I. Bill of Rights which got me
educated. Some people say, "See what happened when we did
that." It was one of the best investments we ever made in this
country and our people. We are running into all kinds of exemplary
interventions. Things do work. You can change the system. Therefore we
ought to go about it. 
        