Dropouts lower economic growth

Debra Machemehl

The Signal

Every day in the State of Texas 719 students drop out of high school.  High school dropouts drain the national and state economy by lowering local, state and national tax revenues.  Even when employed, they earn significantly lower wages than high school graduates.

“For the class of 2010 graduates, 7.3 percent dropped out of high school, a decrease of 2.1 percent from the class of 2009,” said Susan Marchman, communication information officer for Texas Education Agency.

Texas once again ranks in the bottom third of states in high school dropouts.  Students leave high school without a diploma, a high cost to themselves and society.

The Annie E. Casey Foundation, a private child advocacy group, released its annual Kids Count Data Book reported that only nine states in the nation (in descending order they are Arizona, Colorado, Louisiana, Oklahoma, Wyoming, Montana, New Mexico, West Virginia and Nevada) have a higher percentage of teens not attending school than Texas’ 7.3 percent.

The American Community Survey, a survey conducted by the U.S. Census Bureau, reported 25.9 percent of people aged 25 and older do not have a high school diploma and are living at or below the poverty level in Texas.

The unemployment rate for college educated workers was 4.3 percent in July of 2011, compared to 9.3 percent for workers with a high school diploma only, and 15 percent for workers without a high school diploma.

The Casey Foundation encourages students to stay in school, stating on its website that improving education will create a wave of economic benefits including increasing individual earnings, home and auto sales, job and economic growth, spending and investment and tax revenue.

“Not having a high school diploma or general education diploma certainly has an impact on an individual’s ability to find jobs and find better jobs,” said Edward Honold, director of adult education for Harris County Education Department. “If you look at the life-long earnings of those who get a high school diploma or GED versus the people who do not – overtime studies have shown people with a high school diploma will make $167,000 more than those who do not.  This affects their capacity and, in all probability, some will ask for help or support from the state than those who do have a high school diploma.”

The U.S. Bureau of Census reports the average annual income for a high school dropout in 2005 was $17,299, compared to $26,933 for a high school graduate, a difference of $9,634.

On average, each high school dropout costs the U.S. economy about $260,000 in lost earnings, taxes and productivity over his or her working lifetime.

“Adult education is an investment in the future of our state,” Honold said.  “Better- educated parents raise better-educated, more successful children who are less likely to end up in poverty.”

While the need for better-educated, skilled workers continues to rise, the available pool of such workers is decreasing in the U.S. and Texas.

“A recent study by the Brookings Institute showed the lower the education, the harder it is to find a job,” said Sue Cruver, marketing communications coordinator for Gulf Coast Workforce.  “Locally, it is due to the fact that the education and skill requirements for industries experiencing the largest job growth are at or higher than a high school or GED diploma.”

As a state, Texas benefits from increased graduation rates because the economics of increased buying power, better tax paying ability, and will see higher levels of worker productivity.

“In this area, Galveston County as a whole, we producing around 600 GEDs a year but we have 700 to 800 dropouts each year,” said Josh Hayes, director of adult education for College at the Mainland.  “Each year that we operate we have seen that problem exacerbate across the board.  What we are looking at is making a connection between completing GED, the secondary education and the more advance job training that is essential to maintain steady work.  That is where the gap is.  There are jobs in the area but there is just not that many qualified individuals.”

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