• from the Florida Times-Union - High School Dropouts Cost Nation Billions in Lost Wages and Taxes
  • from The Columbus Dispatch - High School Dropouts Cost Nation Billions

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High School Dropouts Cost Nation Billions in Lost Wages and Taxes

April 15, 2006

By William L. Bainbridge

For those who fail to graduate from high school, the economic losses are enormous. Over the course of a lifetime, the gap in earning potential between a high school dropout and a high school graduate is $ 260,000. The average shortfall in lifetime earnings for a dropout, when compared to a student who goes on to complete college, is well over a million dollars.

The current high school dropout crisis will exact a huge toll on these people. For our local and state economies, the losses are massive, too. According to the U.S. Department of Education, high school dropouts:

contribute disproportionately to the unemployment rate (55 percent of young adult dropouts are employed, compared to 74 percent of high-school graduates and 87 percent of college graduates).

Dropouts also provide about one-half of the taxes for state and federal coffers that high-school graduates provide, constitute 75 percent of state prison inmates and 59 percent of federal inmates and are 3.5 times more likely to be incarcerated than graduates..

U.S. Department of Labor data indicate that if even 33 percent of current dropouts would graduate from high school, the federal government would save $11 billion each year in food stamps, housing assistance and temporary assistance for needy families.

Recent data released from the "Alliance for Excellent Education," a D.C.-based policy, research and advocacy organization, indicate more than 1.2 million students in the U. S. didn't graduate from high school in 2004, the last year for which data are available.

These numbers are going in the wrong direction. This is more than just another indictment of our public schooling process. According to the recent Alliance report, in the lifetimes of the dropouts, it will cost the nation $325 billion in lost wages, taxes and productivity.

The report was largely based on the work of Princeton University researcher Cecilia Rouse. Former West Virginia Gov. Bob Wise, president of the Alliance, indicates this figure does not even count the amount of higher earnings that would be realized if some of the students graduated and went on to higher education.

In Florida, for example, of the 238,161 high school freshman in 2000 only 53 percent graduated four years later. The lost lifetime earnings for Florida's 2004 dropouts would equal $29 billion when compared to those who graduated from high school. This lost earnings estimation is based upon calculations in the 2005 project, "Labor Market Consequences of an Inadequate Education," also by Rouse. Alliance leaders note that students who don't graduate from high school earn less than their classmates who earn at least a diploma, and considerably less than those with a college degree. Wise said: "These losses in earnings are bad for the individual, obviously, but they also have a tremendously negative impact on the nation's economy." States are using creative mathematics in data that report fictitious higher graduation rates to show compliance with the No Child Left Behind federal education act.

Only about two-thirds of the students who enter ninth grade will graduate with a regular diploma five years later, according to both the SchoolMatch Institute and the Urban Institute.

Rouse noted that dropouts "are less likely to be employed and have significantly lower annual earnings than those with at least a high school degree and they also contribute significantly less to tax revenues."

Policy leaders need to more carefully examine the dropout crisis for the reasons students are not completing high school.

It is fradulent to claim improved test scores in a student body if the bottom half of the class is encouraged to disappear.

In order to be economically competitive in a global marketplace, our country needs a well-educated population. The economic value of good schools is proven to be in direct proportion to the education level of the workforce.

is Distinguished Research Professor at the University of Dayton and is President & Chief Executive Officer of SchoolMatch®, a Columbus based educational auditing, research, data firm.

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