When the economy Wayne's education is negatively affected. When the quality of education is poor the economy suffers. We all have a stake in the quality of Education as Citizens. The quality of education is the foundation of the democratic process. It increases the capabilities of elected leadership. It enhances the voters perceptions of the nature and scope of community problems. It contributes to the overall quality of life that makes the community and attractive place for all of us to live. For businesses quality of Education means the development of leaders within our organizations. Managers who have strong analytical skills and decision making capabilities. It means employees who are capable of clear communication and self-expression who are aware of the importance of Human Relationships in the organization. It means an investment in people who will grow with the company stimulate Innovative, thinking adaptability and resourcefulness with each other the program today gives us an opportunity to take a look at a number of problems and opportunities Lester. Thurow will attempt to define the knowledge Gap by contrasting our economic difficulties with the declining quality of Education in America. Last December it's Lester. Thurow pointed out that and I quote here. Our economy is not going to thrive unless there is a major effort to upgrade the American labor force from top to bottom. If the business Community gets more involved in both the design and delivery of Education. We are going to become more competitive as an economy knowledge is power. A trained intelligence is a chief component of individual and National productivity of a nation's capacity to innovate and its General economic growth end of quote. Dr. Jerome is Professor of Economics at Massachusetts Institute of Technology a consultant to a number of major American and Japanese corporations. He is a graduate of Williams College received his ma from Oxford where he was a Rhodes scholar and has his PhD from Harvard. He has served on the president's Council of economic advisers the national commission for Manpower policy the NAACP economic advisory Council and has appeared before the US joint committee and the US House Banking and currency committee. Thoreau has recently written his sixth book dangerous currents the state of economics in which he challenges intellectual foundations of conventional economic theory. Until recently he served on the editorial board of the New York Times and was economic columnist for the Los Angeles Times. I'm pleased to announce to you Lester thurow. Although I've never lived in Minnesota. I stand in front of you that somebody who basically had a Minnesota education when it became too Elementary and secondary school because I grew up in Montana and went to grade school and high school and at that time I think Montana salaries must have been higher than Minnesota salaries because all of our teachers seem to come from Minnesota and we talked about the teachers coming from back east. And so all they come to you from Boston today to in my mind. You're always back east. Let me beg your Indulgence a little bit if you were here in December because I'm going to spend about five minutes repeating things. I said in December and so you can turn your mind off for that five minutes and then I'll go on to other things because I first want to describe where I think the American economy is today because if you don't aren't with me on that, you're not going to be with me on the rest of it basic. Basically the argument I would make to you in shorthand. Was that after World War II economically speaking the United States had effortless superiority. The rest of the world had blown itself up we had in 1953 a per capita GNP twice that of the next best country in the world eight times that of the Japanese and both human and signed in material terms. The rest of the world was in shambles Europe, of course had given us it's very best brains. I sometimes ask people what American high school did those great American scientist Einstein and Fermi graduate from Well, of course the greatest American scientists had European education's Europe is never a good going to be so stupid as to give us their best brain power, but we did have that effortless superiority and we lived in a world where international trade was very unimportant. As far as Americans are concerned back in 1929. We exported or imported four to five percent of the GNP by 1949. That's exactly what we were doing exporting or importing for 5% of the GNP by 1969. We were still doing that exporting or importing for 5% of the GNP, but between 1969 and 1981 American exports went up to 13% of the GNP, we tripled our involvement in international trade and just a little bit more than a decade now 13% may not sound like very much to you. But it means that 70% of all the goods and services made in America are subject to actual or potential International competition. And of course what fraction of their GNP do you think the Japanese export? The answer is 17. We are almost as much dependent on International Trade is the Japanese and if you look at exports out of Europe discounting exports between European countries, it's a very similar percentage in Europe. So the world economy is really here world of competition is really here and we have lost the effortless superiority. Now that was inevitable and I regard the loss of Everest Le superiority is a good thing because living in a neighborhood with other wealthy people is positive, even though your sometimes envious. You don't want to be the only person in the neighborhood of poor people poor countries in this particular case, but you also don't want to become a poor country. Let me read you for 1982 some numbers on productivity product of various industrial countries productivity is the way you measure economically how efficient and how good is an economy. I'm going to talk about manufacturing not because manufacturing is the whole economy, but simply because it's easiest to talk about and there are the fewest arguments about exactly how you do the measurements and compare countries because in terms of industrial countries, we all make approximately the same kind of things in our manufacturing sectors. This is for 1982 in 1975 dollars in 1982 in US manufacturing productivity was $11.20 per hour of work in West Germany. It was $12 and 39 cents in France. It was eleven dollars and 96 cents in Italy. It was eleven dollars and twenty-nine cents all of Northern Europe in some in southern Europe with the exception of Great Britain and Ireland now has productivity equal to or Superior to that in the United States. We compete among equals. If not superiors the Japanese according to these numbers have productivity of $10.63 very slightly below the American average, but that's one of those numbers that's true but misleading The Japanese economy is a very peculiar mixture of the super efficient in the real dogs where they are good. They are very very good and you don't see the dogs and it's like saying you can drown in a river which is on average two feet deep because we're the Japanese are good. They lead the world in productivity shipbuilding automobiles consumer electronics lots of other things. Now there's one country. I haven't mentioned country. I haven't mentioned is Great Britain. Let's review a little bit of economic history. We didn't always have the world's best economy in the 19th century. The British had the world's highest level of productivity the highest level of efficiency economic historians think that we caught up with the British about 1900. And we're passing them after 1900. Where do you think the British are today given the just 80 years ago. They had the world's best economy. Remember the Germans are at $12 in 39 cents worth of output per hour of work. The British are at $6.95 half the productivity of Great West Germany and a period of 80 years. They have gone from being the number one economy in the world to being what I would call a semi underdeveloped country. Now, I think that's precisely where we are today the rest of the world caught up. The rest the world threatening to pass I think catching up is good. I think falling behind is bad. Now when I was a student in college and universities, even though I went to these Elite institutions, I was told something that wasn't true. The standard reaction in the 60s to higher rates of growth of productivity in Europe or Japan was don't worry. It's easier to catch up than it is to invent new things there in the catch-up mode when they catch up their productivity will slow down and you don't have to worry about them passing us. Sounded right probably even wrote it down on exams in the 1960s. Well, we can put that hypothesis to the test. They have caught up. What does prototypical growth rates look like given that they have caught up in or not doing just a lot of copying of what Americans are doing. Well, let's take manufacturing productivity for those same countries and ask what's going on in the five years from 1977 to 1982 American manufacturing productivity grew six tenths of one percent per year. That was not a dim spot in the American economy. That was a bright spot because the rest of the American economy productivity only grew at 0.1 percent per year. But in West German manufacturing productivity was growing four times that fast in French manufacturing it was growing five times that fast and in Italian and Japanese manufacturing it was growing six times that fast they caught up we slow down we in theory now have the easy task. We don't make video recorders the Japanese make video recorders. Why don't we just copy how to do it? now if you go on obviously with those kind of differences in the rates of growth of productivity, it is just a matter of mathematics as to when we fall into the British position. And the basic problem we in the face in the United States is re accelerating our productivity growth rate. Not that so we go back to effortless superiority because that's impossible. What's so that we run even with the leaders of the economic pack because that's what we want to do. We're not going to lead in everything but we don't want to fall behind in everything. Now. What's the standard thing human beings do when they have a very difficult problem. They deny the existence of the very difficult human problem. There are a couple of denials that float around I want to briefly mention them and then we'll go on to some new things the repeat from December will be over the first denial is it's just the product cycle and that is when you see an industry like steel die. You shouldn't worry because that's just an old industry Industries come into the economy as a high technology industry. The decades pass, they become a low technology industry comparative advantage shifts and they move off to Brazil and Korea. That's all to the good America moves on to new and better things. There's some truth to that. But if that were all that we're going on in the American economy. You would expect to see America doing very well at the front end of the economy so we can go up to those front end products and look are we doing better on the front end and we're doing on the rear end. Well, if you do that, well you find first thing. If I need of course is those crazy video recorders brand new product brand new production technology this neat year. The Japanese will make 20 million video recorders export 15 million of them that's billions and billions of dollars and output hundreds and hundreds of thousands of jobs. And how many video recorders will be made in America. The answer is zero 100% imported not one made in America semiconductor chips used to be in America Monopoly Japanese got 70 percent of the market for 64k RAM chips or expected to do at least as well for 256 Machine Tools. we have one 13th as many robots in the American economy relative to the size of the labor force is the swedes do in five years the American Machine Tool industry has lost all of its exports in thirty-six percent of its domestic Market. Telecommunications we open up for competitive bidding the laying of a glass optic fiber cable from New York to Washington and a foreign firm wins the bid by 50% We then reject their bid on the grounds of National Security despite the fact that come from one of our allies. The IBM personal computer how many people in this room know that more than half the IBM personal computer in terms of value added is made in Japan that's Japanese product is not an American product because if you can't competitively make video recorders, then you can't competitively make the TV screens on personal computers and they have to be made in Japan which they are. Mr. Gaeta makes that half of the Japanese of the IBM personal computer the final indignity. Did you notice who made the clothes on the American ski team at sariego? Made by firm coldest Conte that sounds Italian but it's Japanese. They developed a new fiber this year. It's on the American ski team next winter in the skis stores of Minneapolis. You will be able to buy a $700 ski outfit made out of exactly the same fiber problem is the front end of the economy doesn't look a heck of a lot better than the rear end of the economy. If you say how well are we doing competitively? It isn't in such bad shape you can automatically because the markets are growing faster and you can lose 70% of the market for chips and still not have to close down a lot of factories. But in the long run you're in just as bad shape. Second argument that's made here for doing nothing is the the Second Industrial Revolution argument first was the shift from agriculture to Industry the seconds to shift from industry to Services. Can we have a high standard of living as the suggest the service economy? And I think the answer to that is no answer to that is no it was for several reasons. First of all, if you look at the data, it does look like we're moving to Services 62% of all the hours of work going into the American economy between 77 and 82 went into services. But if you look at where they went you'll very come quickly come to the conclusion that that's going to Peter out and we couldn't have a high standard of living anyway, because what you will find Is 37% of all those people who went into Services went into Healthcare? Almost 40% of the total win into Healthcare fact of life. You can't have a high standard of living giving each other heart transplants and in both our private and public economy. We're trying to Cap Health spending and the minute we cap it and we will because we can't afford to have the kind of increases. We've been having 40 percent of the growth and services is going to instantly disappear because when you quit spending more money on health care, you're going to quit hiring more people in healthcare. Another 33 percent of all those people going into Services making a total of 70 went into something called Legal and business Consulting number of lawyers in America went up 43% in five years think of it. It's mind-boggling. But of course, it can't continue because there's another fact of life. Suing each other between consenting adults is good clean fun, but doesn't generate a high standard of living. All you do is reallocate income from one person to another you don't produce any income you grind some of it up in the reallocation process. And in terms of Business Consultants, you need American industry to sell those Consultants to Germans don't need American Consultants to sell the Germans or to Americans as far as that's concerned because if there's something wrong with American industry competitively the same things going to be wrong with American Services because services are mostly subject to competition take Banks as British industry was going down the tubes the city of London the financial district in England said, we don't care will become Bankers to the world. But of course you can't for a very simple reason the rest of the world has investment Banks. The Deutsche Bank owns Mercedes-Benz the Mitsubishi Bank owns Mitsubishi Electric and Mitsubishi heavy Industries. They are in a position to give an order. I'm your Banker that's not a request. That's an order and American Banks can pick up the crumbs on International markets, but American banks will never become the lead Banker to Mercedes-Benz and I can guarantee that that's not a matter of forecasting. That's a matter of simple fact advertising agencies. The world's largest advertising agency is Japanese. They write some very clever ads if you don't think so go and watch Japanese television. Let me end up with a homie example. I have two sons at the age of their taking music lessons. Have you bought a music instrument? Recently? The Japanese have conquered the music instrument business, they both play on music Japanese music instruments, but they both take Suzuki music lessons. The Japanese have conquered both the instrument business and the service side and the services came out of the hardware somebody who ran a violin Factory said, how do I expand the market for violins? Well, I determine a way of teaching young people violins so I don't just sell them one violin. I sell them a 1/64 violin a 1/32 violin of 1/2 violin a 3/4 violin and I sell a lot of violins because of course the crude way to say this is let them make the hardware will do the software programming but that's basically impossible as you know, because you can't write the software unless the hardware guy releases his technical specifications foreign manufacturers will release those technical specifications. As long as they have American Hardware competition, but don't bet on it if they don't have American Hardware competition because of course one of the problems with Texas Instruments entry into the computer business is they refused to release the technical specifications, which meant that the outside software houses. Basically Couldn't Write programs for their computers. And that was one of their strategic mistakes, but if I have a monopoly on a hardware, then it's not a strategic mistake to keep my technical specification secret now. If you buy my hypothesis that we're at one of those fundamental economic turning points, not some just kind of inevitable all for the good process. We're Britain 80 years later. And the question is what are we going to do? Then? You can analyze what are the causes and what are the cures? I have a very simple analysis of the cause. The cause is the following suppose I tell you. That the Boston Celtics have won the NBA title for the last 30 years in the row. They've actually only wanted 18 out of 30 times. And I then said to you at somebody good on organizations given that they've had effortless superiority for 30 years. What would you tell me about the Boston Celtics organization? What would you say it tend to say little sloppy around the edges. They've had it easy for a long time. That's precisely the American problem. You can't build a high quality product with low quality inputs and wherever you look at the fundamental inputs going into the American economy labor Capital Management Labor Management relations, and you compare them with our competitors. You always come back with the conclusion. We're not quite up to Snuff. We save one third as much as the rest of the world. That means we're going to have one third as many robots is the rest of the world. And so forth now, what I want to do in the rest of my time is focusing on the educational input leave those other inputs aside their all-important. They all need to be brought up to Snuff. I think I can make an argument that none of them are what I had what I would call world-class levels, but what we're focusing on today is education and it is clear that American education is not at World Class levels. And I am increasingly disturbed by a non random survey and it isn't even a survey people come up to me. One of my fields and economics is international economics. And I do a lot of traveling abroad I go two or three times a year to Japan and probably five six times a year to Europe and I am increasingly getting foreign businessmen who come up to me and say and they don't know that I have any great interest in this subject. They say our American Workforce isn't up to Snuff. It isn't as good as our Japanese Workforce or is our German Workforce and when they're talking about that, they're not so much talking about motivation is they are things like baked as basic literacy ability to read and write ability to do mathematics. Those kinds of things that you're supposed to bring into the labor force in addition to that basic motivation. Now we all know and I'm not going to bother to review the data on declining American test scores in terms of mathematics and everything else. The one thing we should remember however is that this is a very pervasive thing. For example, if you look at the decline in this SAT test scores, the average test score on the verbal part is gone down 11% in the average test score on the math part is going down 7% but if you look at the fraction of the population scoring above 600 the elite the number of people above 600 on the verbal test is going down 39 percent almost four times as fast as the average and the number of people above 600 on the math test has gone down 19% three or four times as fast as the average this isn't the case of the bottom and the middle dragging down the top the top is going down even faster than the bottom in the middle. Now if you compare us with other countries and say give the same exam to a Swedish student and an American student how well do we do we come up very badly for example, in terms of math absolute test scores the average American 17 year old knows precisely half as much mathematics is the average Swedish 17 year old and the average Japanese seventeen-year-old is only slightly behind the average sweetie 17 year old in terms of how much mathematics they know eight percent of the American 17 year olds test out as functionally illiterate one half of one percent of Japanese 17 year olds test out as functionally illiterate. now less than half of all Americans will take more than a year of math and science in high school. And if you think of those Computer World micro Electronics Revolution and all that. How are you going to compete against in a mathematize the world? How are you going to treat compete against the rest of the world knowing half as much mathematics as they know. Well, I think the basic answer is you're not going to compete against the rest of the world doing half as much mathematics is they know if you look at the proportions of University graduates out of every 10,000 workers in America. We have 20 lawyers 40 accountants in 70 engineers. In Japan the same proportion is one lawyer three accountants and four hundred Engineers now given those ratios. Do you find it surprising that people say well the average Japanese product is a little better engineered a little higher quality than the average American product. It's not surprising. They're putting a very different mixture of talent into their economy than we're willing to put onto our in our economy. And it pays off on the Industrial Level now, I think it's particularly going to pay off because if you look at the management input into our economies, we are seeing some American companies are demonstrating in the Japanese are demonstrating. There are a lot of what I call soft productivity gains to be gotten by moving towards various forms of participatory management where you let the workers on the floor make some of the decisions that managers used to make but in order to move to that high productivity payoff form of management, you've got to Well educated literate workers in your offices and on the shop floor for example in the United States. If you take programmable Machine Tools robots, that is almost always done by white collar programmers in both Japan and Europe. That kind of programming is done by the blue collar people who run the robots because they have the math in the literacy to learn how to do the programming but if the guy running the machine can do the programming then you've got an intrinsic Advantage first, you don't have to hire the programmer and pay them on the salary, but then the guy running the machine when something goes wrong can make the corrections right there on the place as opposed to shutting the whole thing down and starting over. If you take just in time inventories, which proved to be 40% of the cost differential between American and Japanese automobile manufacturing, you make just-in-time inventories work by having the assembly line workers at the end of the shift do the inventory control, but that means they have got to be teachable. You've got to teach them enough mathematics to do a little bit of basic operations research so that they can do the inventory control at the end of every shift. Those kind of course the other thing that's moving in the same direction is a lot of are very simple jobs are the ones that are the easiest to robitaille's. And a lot of those jobs are going to be done by Machinery of one sort or another and then you've got to have people who can do the more complicated jobs. And so I think you can see lots of places where American industry is starting to be at a competitive handicap because its Workforce at the base doesn't have the qualities that needs now one of the things that stands in our way as we in the United States have what I call The Lone Ranger myth. We think economies and societies travel based on brilliant individuals and we grossly downgrade social organization. But in fact industrial economies travel based on the broad base of social organization, the Japanese have no Nobel Prize winners for very few. But they're still beating us economically. And of course we whip the world during a period of time when we also had no weapon. No Belle why Prize winners because we caught up with the British in 1900 but between 1900 and 1940, we weren't the world scientific leaders. We didn't win any know very many Nobel prizes if you and 1939 as a physicist had been told you had to cancel your subscription to the German physics review or the American physics review. You would have canceled your American subscription because the best high science was done in Europe not in the United States for 40 or 50 years after they had lost their economic leadership and that very broad-based mass is what you've got to think about because that's terribly important to an industrial economy their industrial economies without natural resources that are successful. There are no industrial economies without good human resources that are successful and of course in our economic Heyday late 19th century. Early 20th century, we invented public education first. We had a higher fraction of literate workers than the rest of the world. Not a lower fraction of literate workers than the rest of the world now. All of those things lead me to the position if you really want to be a competitive economy having a standard of living Second To None, then you've got to have a labor force that second to none and that means you got to do something about the education system because we don't have an education system that is producing people for our industrial economy that is second to none. And that isn't just going to drag down the automobile industry that's going to drag down the high-tech Industries that's going to drag down the service Industries. It's going to drag down every component of the American economy. Now if you think about causes, let me not focus in because I'm not the expert on that of the causes of things going on inside the classroom, but let's think of some bigger causes. That really have to do with the economy or some real social problems. One of the causes is clearly demography. Let's forget Elementary and social in Social secondary education for a moment and think about higher education. I will argue to you that American higher education is just on the edge of a participant precipice. It is going to jump off in 10 years from now. The quality of American higher education is going to be much lower than it is today. Why can I say that very simply demography between now 1884 in 1996? The population of America 18 to 22 years old of age is going to fall 28 percent. Which means a third of all the students in American universities that are there today 12 years from now, we're going to be gone and one way or another we are going to fire something approaching one. Third of all the faculty members in our universities between now and 1996. Now that's what elementary and secondary education is just reached the bottom point on because the The dearth has moved through the high schools and is now heading the colleges and what happens when you have declining sales. Can you name a single firm or industry that's well-managed in the face of a 30% decline in their output. Their sales are industrial landscape is littered with badly managed firms where sales of Fallen because it is virtually impossible to well-managed your firmware sales go down 30% what happens you got to fire people who bails out first your breasts and brightest people have got alternative job opportunities who goes into an industry where a third of the people are being fired in the only thing you say every year is These people are going to go. I have a friend who's a principal big high school. He says what am I supposed to do? They could all be God and I'd fire seven of them every year. Well, that's what university presidents are going to be saying I could be God and I've got a fire 10% of them this year. Good young people are not going to go into University education because salaries are going to fall because there's a lot of Warm Bodies out there. That's not the problem. And you're not going to get a competitive Workforce. And of course what happens to morale and Esprit de corps when the only question is who gets fired and there no positive rewards in a firm. The answer is morale and Esprit de corps go to hell and went around spree decor go to hell of course what goes on in the classroom also goes to hell. Now what's going to happen to private universities in the next 10 years good fraction. I'm going to be shut down. By students voting with their feet very hard to sell something that somebody else gives away free or at low cost in the face of declining sales. Lots of private universities have existed essentially on a shortage of places. The shortage of places isn't going to be there what's going to happen to set State University's you and want a soda and some sense are lucky but in most States they're going to crucify themselves because what's the rational thing to do given a 1/3 decline in enrollment in a state university system. The rational thing is to close down one third of the campuses 100% And Run the remaining things at capacity. You kill off your worst to save your best, but who's going to do that what town wants to lose their University the political process is not going to do that. They're going to cut everybody back and they're going to say and this is already happening in the state of Oregon state of Oregon. They've got to popular campuses University of Oregon and, Oregon. And eight other not-so-popular campuses students obviously vote with their feet to go to the popular ones. So the legislature and Oregon has put falling Romina limits on Oregon and Oregon State this year. You can have 24,000 students next year 23 the year afterwards 22 and the effort is to force those students out into those unpopular state universities. So the state legislature never has to close them down because there aren't any students there because but that's a policy to kill your best to save your worst and I would bet that is precisely the policy that almost every state in the nation will adopt Are you don't have as many state universities as some states and that puts you in a lucky position. But anytime somebody's talked starts talking about across-the-board cut back. She ought to reach for a gun because the rational thing is to close whole universities down and whole departments down. But who's going to be rational politically? It's much easier to cut everybody back by five ten percent this year rather than cutting 5% of the Department's to 0 and so I would be willing to bet come 1996 American higher education isn't the look so good and it isn't because they're lousy people in higher education. Of course the same things true an elementary and secondary education that has been one of the big handicaps in elementary and secondary education over the last 10 or 12 years there at the bottom of that and we can see some almost automatic Rebound in elementary and secondary education because they're at the point where there aren't having to simply fire people and they're going back from a system of all negative rewards to a system where you can at least imagine some positive rewards. Now, I would suggest to you is partly the business community in Minnesota. You are the people who ought to be there at the state legislature when they're talking about these cross the board cutbacks and saying no you got to shut something down. You can't do that. Because you're not going to have a good University in Minnesota 12 years from now. If you do the next 12 years across the board cut backs. And if it even if you got only down to the University of Minnesota here in Minnesota, you don't cross the board cutbacks at that level either. You got to pin them down. So they say if I'm president University of Minnesota and I've got to cut the budget by 10% I've got to do it by cutting whole departments. I can't do it. I'm not allowed to do it by giving everybody a 10% cut back across the board now. It isn't any easier to do that in private universities and it is in public and I see a lot of cross the board cut backs coming around the Mi t--'s of the world to so I'm not saying this is the something that's particular to public universities, but it's something you really have to think about resisting now two other things. I think you want to think about in terms of the outside and I can see this very clearly where I live because I live in one of those New England towns that has a town meeting. Something goes on I can't blame anybody else. It's us we get to sit there every year and vote on everything. There's no Town Administrator. Nobody between us and the school system. And about two years ago. We had a town meeting on the local schools. And you know, if you were in the school system, you should see these kind of town meetings because I bet the same thing could have been done in Minnesota. The school's clearly are very ambivalent. It's of what they're supposed to be doing. They're very ambivalent because the population is very ambivalent what it's supposed to be doing at this town meeting. I suppose there were about forty percent of us at said we'll take care of the luxuries. You beat the 3 R's into them. There but there were another 40% that said we want life adjustment. We want the kids taking care of safely made happy. That's your job. And there was another 10 20 % that said, you know, we just really want babysitting keep them till 4:30 in the afternoon. There was a huge fight in our town about lengthening kindergartens till 4:30, and it clearly just had to do with free babysitting. That was what the issue was working mothers didn't want to have to pay for babysitters till 4:30. Now, there's nothing wrong with that but you have to understand that there are those tremendous pressures in on the system. I recently had a discussion with the principle of the grade school my son one of my son goes to and he we were just kind of chatting. He said, you know, I spend 10% of my life and divorce court I said, how do you do that? And he said well, he's parents getting all these custody fights about kids in the first thing they do is subpoena the schools to testify as to which whether the mother or the father they should live with Well, those kinds of social impacts have educational outputs in terms of what comes out of the system. And so when we think about the school's I really think we ought to think about ourselves see I believe fundamentally that American Education reflects us. If we clearly know what we want the school system will deliver it. If we don't know what we want the school system will deliver confusion if we make a mistake about what we want the school system will never deliver a mistake now in the short run there can be a gap between what we want and what the schools are delivering because it takes them a while to change. But in the long run they are us anyway, I was on the hunt Commission on education and a lot of teachers will tell you can't assign homework anymore. Can assign homework because homework is what it says is somebody at home has to make the kid do it. If one kid out of 30, if one kid out of 30 doesn't do what the teacher can crack down if 29 out of 30 don't do it. The teacher can't crack down and the problem today is 29 out of 30 don't do it and that reflects our home interest in push on the school system. I was told the story when I was on this commission from the doused superintendent of schools that he had a junior high teacher with a very peculiar characteristic. She decided that you had a hand in all the homework didn't have to be right just had all be handed in and she would flunk you if it didn't hand in all homework everybody knew she was a good teacher that was not an issue. She did in fact flunk 15% of the students for not handing in the homework and you know, what happened? group of parents sued for cruel and unusual punishment Now that that reflects the real world as it is and I think we should be very sympathetic with the school system of all these various pressures can't coming in upon you and of course the other thing has happened for all of these reasons demography the external environment. I think one of our big problems and we have to think about how we remedy is my impression is a lot of teachers have lost their self-confidence in Esprit de corps I a couple of three years ago. I don't have kids of high school age yet, but there was a black family in downtown Boston during our school dispute where a black teenage girl of a family we knew was assigned High School. It was in a riot and Revolution and the mother asked whether she could live with us for a year and go to our high school, which I said, yes, which meant I had to be her guardian so she could legally go to this high school. And I meant I had to go to all these parent teachers conferences and the world was very different from my backward days in Montana with all these Minnesota teachers when I would go into my guidance teacher in Montana that time he didn't have any legal To do this, but he would look me in the eye and slammed his fist on the table and say you're going to take math physics English History you got one choice and I think it ought to be math to this girl would go to her high school guidance teacher this big Suburban High School in Boston. And I'd say this is cafeteria. There are 3,000 students here a thousand courses take anything you like keep your nose clean. Don't bother us. We won't bother you. That was basically the message that was delivered and I don't blame the teacher for that so much because the teacher can only deliver a clear message if they know what the clear message is. And so I think we have we have got to be very clear on this and when we think about what you do about American Education, you've got to think about what kinds of things can you do to in some sense increase the self confidence and Authority in a psychological sense of the teaching core. So they once again could look in the kid in the eye and say pod pottery classes. Great. But a potting Society is a lope or society and you can't afford more than one pottery class in your high school education. You can't pass a law saying no pottery. But you have to be able to have the Esprit de corps to say I know mathematics is going to be more important to you than pottery and if you can't say that the system isn't going to work. I don't care how much you pay the teachers who they are. Whatever it is now. Let me give you. A couple of what I think are starting points for getting at this problem of quality education at every level. One of the starting points is simply a matter of work. I had a fourth grader last year and on one of my periodic trips to Japan. I thought I'll go to a Japanese fourth grade and see what they're doing. I know what my fourth grader does well when you get there, so there's some interesting differences. Of course, the big difference is they go to school 240 days a year we go a hundred eighty the average American is absent 20 the average AB Japanese is absent 3. So the average American is in school a hundred sixty days a year the average Japanese in school 237 days a year fourth graders in the United States tend to go to school about six hours a day fourth graders in Japan go seven or eight hours a day and you add it all up and middle-class fourth graders go to after school school. You got it all up there in school 50% more. Now should I regard it as a surprise they do better? No other industrial country has less than 220 days of school a year a hundred. Eighty days. Is it a leftover from an Agricultural Society where we needed the kids in the summer. We don't even know what to do with them in the summer anymore. And of course if you're going to talk seriously about raising teachers salaries, then you have to talk seriously about make teaching jobs a full year job. You can't pay full year pay for half for three-quarters of a Year's work. And on both counts, I think we need to go to a much longer school year now when I suggest this to various teachers, they always say well let's do things to make school better and then we'll talk about making it longer. That's the myth of efficiency. The rest of the world is also trying to do things better, but they're trying to do it better and 220 to 240 days. And you do the easy things first being super efficient inside the classroom is hard. It doesn't take a lot of brains to work 50% more. It just takes the willingness in the effort. And so I think we one of the first things on the line ought to be a longer school year and that's something that's doable at the state level because that's a state law and the business community in Minnesota. If I were it ought to be pushing very hard for a lengthening of the Minnesota school year because you can then move up and Pay Teachers more among other things and you can't get good people unless you're going to pay them more. Are there other place I think where the business Community can have an impact is there is another place where we're different than the rest of the industrial World everywhere else in the industrial World in order to graduate from high school. You have to pass some kind of a competency test French call it the Baccalaureate the British call it there a and o levels Germans have their thing the Japanese have their thing. Nobody runs a firm without a quality control standard at the factory gate and I don't know how you can run an education system without a quality control standard at the factory gate. Now we can argue about what that quality control standard ought to be but I think we've got to have one and I think especially we've got to have one because that's the way we the public tell the students. This is important because if the public isn't willing to say, this is the control standard then no teacher can say this is the control standard now, this is something that business Community can do without the educational establishment. Because the Minnesota business Community could get together and say this is our competency test to work at our factories and our offices. You've got to be able to pass this test. We're not going to hire anybody who can't pass this test the school system either gets people to this level or it doesn't get this people to this level, but if you don't get to this level, you're not one of our employees now de facto. That's what you do now. But you could do it up front and deliver the message to both the school system and the students. This is the level of Competency that we require. Well, I think this whole issue of Competency testing is one that we need to have a public discussion on and come to a conclusion of what is the minimum. We are willing to accept. What is the minimum we need to have a successful economy. Now you can argue about cultural bias testing and there's a little bit of that but see in some sense mathematics is against all of our culture, but we still got to learn it the joke at the the joke joke at the moment at MIT is MI. T--'s 1/3 Oriental 1/3, Jewish and 1/3 everybody else. That's about right. Maybe mathematics is more of an oriental cultural thing could very well be but we still got to learn mathematics. And you've got to face up to that sooner or later. Now one final comment clearly. If you want good people you've got to pay competitive wages. You can get people in your schools without paying competitive wages. They don't question of that warm bodies are not the problem. But then if you are paying competitive wages, you can demand a competitive product. Now if you take Math teachers and there are some school systems in the United States that have no qualified Math teachers. No great mystery a ba in mathematics from MIT gets $25,000 if he or she goes to work in Private Industry. What does a ba in mathematics get if they came to work in the Minnesota School System 12 13 to be a ba in mathematics and go to work as a school teacher you're in either an angel or stupid. Anna most of our societies can't really depend on having Angels. Thank you. Now those of you have questions step right up to the microphones and state your name and your affiliation and ask your question. They also state legislator. So between the taxpayer in the system of Education, I want to hook in your last comments and really talk about how you change a system. I think some of your proposals are fine, but I think they still tend to be top down answers to basically a classroom problem to a local Grassroots problem. It seems to me like we're going to change systems. We really have to get into that classroom understand the Dynamics and then start to change process by sort of a bubbling up rather than a top-down answer. I think we might be overloading our system by all kinds of expectations when the system is you indicated the sort of a reflection of society with all kinds of expectations on orbit. How would you change the system well, but see I fundamentally disagree with you. I don't And partly I didn't talk about what went on inside the classroom because we've got a real expert here on that, but I don't think the right place is to start inside the classroom. First of all, you're not in the classroom. I'm not in a classroom. The only people who can start in the classroom are the teachers and the students who are in that room you and I are in society. We have got to start on those things that are in society. Now I can do something about the classroom at MIT those I happen to be in. But I can't do anything about the classrooms of Elementary and secondary education. The only thing I can do is change the social organization in a way that might be conducive to the people in the classroom doing some new and better things now on that on that level the what can you and I do is Outsiders we can put better people as teachers in the classrooms. We can put more community and home support the American television set is on seven hours a day and it's up 36% in the last two years turning off. The television set is one of those home support type things until the homework is done. We can only affect the social variables now see I think the the reason for competency testing it doesn't have to be in the school system was I said, it can be in the business Community the business Community simply announces. This is our competency test schools want to ignore it fine, but we're not hiring people who can't pass that test. That is not directly in the classroom. But that's going to have some impact on what goes on in the classroom because external testing is a way a lot of people have found to make the classroom work better is that he mentioned I was a student at Oxford for a couple of years and the way the Oxford system works. They attempt to make turn the teacher from an examiner into a coach and so the people who give you your exam to graduate from Oxford are not the people who teach you there's an outside Authority that sets the exam and then the teacher becomes a coach and you and the teacher work together to get yourself through that crazy exam and outside examiners are something that are very common in our education system in other places and that at other levels and of course that's what a state competency test is. It says we as a society have decided these are the important things and you got to do it or you don't happen to get that degree. Now when I took my degree at Oxford and outside of group of people who were not my tutors set the exam and they gave me a grade and I either passed or flunked at Oxford and it had nothing to do with the opinion who the people who taught me. They had no impact whatsoever on what my exam what my grades were as I graduated from Oxford. They were simply coaches helping me get through that outside exam and you as a state legislature. I think you have to think about now, one of the things you can do relative to this demography is that when somebody suggests well, we're going to cut the university budgets by 10% and that's Justified giving Fallen enrollment. I'm going to vote to close down one tenth of the universities in Minnesota as opposed to having across-the-board cut back that's see that's that's the big thing that you're going to be able to do the next 10 years not going to want to do it because especially if one of those universities to be shutdown is in your District, But that's the kind of thing you can do and I think we all have to say what can we do given our roles if we're not a classroom teacher and we're not a student. We can't really do the good things on the Bubble Up in the classroom. Even if they ought to be done on the board of directors for the School Board Association, and I thank calls publishing for sponsoring you today. You stated that schools reflect Society. What is the best way to change the attitude that we have in the educational field by students and parents school or will it just happened based on the economy you struggled with this at your town meeting evidently and what was its outcome in exchange easy to come by? Well, I think the answer is partly external events changes partly meetings like this where we discuss external events changes what basically happened in our town meeting was a certain amount of sound Fury noise and confusion, but we are moving towards the 3 R's. Because of the noise came out on in the side. Hey, you've got to start bucking up the substance a little bit as opposed to the life adjustment if I can use that term and so, you know, there was a little bit of movement after the town meeting now. I think the thing to remember is you can't expect st. Paul conversions. This is the waves. This is the wave making sand out of Boulders. It takes a long time and a lot of patience. Yeah, our state revenues and primary sources State revenues are state income tax currently many corporate leaders in Minnesota are suggesting that we need to reduce the state income tax in order to attract more high-level Executives of higher quality in to lead our major corporations. Would you comment on the long-term implications of that? Well see, I think that's one of those things that in order to know exactly where you sit on this spectrum you'd have to have to look at the state tax code carefully in general all these arguments about the importance of taxes when it comes to locating business firms are so much nonsense. If you go off and study the data taxes end up being well down the list. The things that are important and of course if that is in fact, the opinion of the Minnesota business Community is its at variance with the business community and some other states at the moment the business Community the state of California said, we will pay some extra taxes. If you guarantee us that a hundred percent of the money goes into education. What does Ross Perot the famous billionaire doing down in the state of Texas? That's the business Community standing up and saying we've got to do something to raise the quality of Education in the Texas school system and we're waving willing to think about us paying some of the taxes to do it if it really goes in to improve the quality and of course there he had the temerity to suggest that they abolish football. He did it knowing that they were going to abolish football, but it then made room for he was of course being a Conservative Republican then made room for a liberal Democratic governor to say well we could least emphasized at academics a little more and I see I think there again that's a perfect example of where the business Community made some space politically speaking for the political leaders to do some something. They couldn't do governor of Texas could never stand up and say abolish High School football a billionaire can stand up and say abolish High School football and not get more than a dozen assassination threats, but the system changes a little bit because of those kind of things and I would be surprised if the Minnesota business Community was saying they may not like the taxes in Minnesota, but if they were really saying we think we can survive in Minnesota with a lower quality Workforce.