[Senate Hearing 112-902]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-902
 
    THE KEY TO AMERICA'S GLOBAL COMPETITIVENESS: A QUALITY EDUCATION 

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING THE KEY TO AMERICA'S GLOBAL COMPETITIVENESS, FOCUSING ON A 
                           QUALITY EDUCATION

                               __________

                             MARCH 8, 2012

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland              MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico                  LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington                   RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont               JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania         RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina               ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon                       JOHN McCAIN, Arizona
AL FRANKEN, Minnesota                      PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado                LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island           MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
                                       

                    Daniel E. Smith, Staff Director

                  Pamela Smith, Deputy Staff Director

     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                  (ii)



                            C O N T E N T S

                               __________

                               STATEMENTS

                        THURSDAY, MARCH 8, 2012

                                                                   Page

                           Committee Members

Harkin, Hon. Tom, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming, 
  opening statement..............................................     2
Hagan, Hon. Kay R., a U.S. Senator from the State of North 
  Carolina.......................................................     4
Bingaman, Hon. Jeff, a U.S. Senator from the State of New Mexico.    40
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    41

                               Witnesses

Mann, Jennifer, Vice President, Human Resources, SAS Institute, 
  Cary, NC.......................................................     5
    Prepared statement...........................................     7
Kolb Charles, M.A., J.D., President of the Committee for Economic 
  Development (CED), Washington, DC..............................    13
    Prepared statement...........................................    15
Hanushek, Eric A., Ph.D., Paul and Jean Hanna Senior Fellow, 
  Hoover Institution, Stanford University, Stanford, CA..........    19
    Prepared statement...........................................    21
Murnane, Richard, Ph.D., Juliana W. and William Foss Thompson 
  Professor of Education and Society, Harvard University Graduate 
  School of Education, Cambridge, MA.............................    25
    Prepared statement...........................................    26

                                 (iii)

  


    THE KEY TO AMERICA'S GLOBAL COMPETITIVENESS: A QUALITY EDUCATION

                              ----------                              


                        THURSDAY, MARCH 8, 2012

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:08 a.m., in 
Room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Enzi, Hagan, Isakson, Bingaman, 
Franken, and Whitehouse.

                  Opening Statement of Senator Harkin

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will please come to order.
    I'd like to thank all of you for being here today to 
discuss a topic of vital importance to America's global 
economic competitiveness and the opportunity individuals have 
to enter the middle class, and that is our public education 
system. What our children and grandchildren learn today will 
determine America's productivity in the future, and that 
depends on preparing them to compete in a global marketplace 
more competitive than at any other time in history.
    But while globalization and technology have dramatically 
increased the skills and qualifications required to succeed 
today, our schools are largely geared toward the assumptions of 
a 20th Century workplace. I know we can't solve the problem 
overnight, nor can we solve it by simply asking more of 
American workers. Americans are already working harder than 
ever, but in recent decades, middle class family incomes have 
stagnated. In fact, over the last 10 years, the average income 
of working Americans actually declined.
    The challenge before us is to ensure that economic growth 
translates into greater prosperity for everyone. That said, the 
path into the middle class is more than ever linked to a 
worker's level of educational attainment. According to the 
Bureau of Labor Statistics, the unemployment rate for people 
without a high school diploma in January of this year was more 
than three times higher than among those who had at least a 
bachelor's degree.
    Unfortunately, this critical door to the middle class does 
not swing equally wide for everyone. Between the 1970s and mid-
1990s, the college graduation rate of American youth from 
families in the top quarter of income distribution increased by 
21 percentage points. However, over the same period, the 
college graduation rate of children from families in the bottom 
quarter increased only 4 percent, from 5 percent to 9 percent.
    In this day and age when two-thirds of new jobs created in 
this country require some college education, only around 10 
percent of young people from poor backgrounds are graduating 
from college. This makes it very unlikely that they will 
achieve the American dream of a middle-class lifestyle.
    The great American tradition is to invest in the next 
generation, to leave our children a world that is more 
advanced, with more opportunity. Other nations have also 
identified this strategy as their own path to economic success, 
as I read in Dr. Hanushek's paper last night. On the other 
hand, we in the United States have recently begun to expect 
less of our education system, and I question how we can remain 
globally competitive when we make choices like this.
    Our witnesses today have different perspectives on this 
critical question of how best to recalibrate our education 
system for the economic challenges of the 21st Century, and I 
look forward to hearing more about their proposed solutions and 
to engage in some colloquies. Even more, I hope that we can 
come together in this committee and in the Congress to do 
what's necessary to give our Nation's children and workers the 
education and training they need in order to secure well-paying 
jobs in the 21st Century.
    The challenge before us is framed very succinctly in a 
report issued last year by the Organization for Economic 
Cooperation and Development, the OECD, says,

          ``The yardstick for judging public policy in 
        education is no longer improvement against national 
        educational standards but also improvement against the 
        most successful education systems worldwide.''

    I think that just sums it up. We're in a worldwide market. 
We can't just measure it by what we're doing in our own 
country.
    With that said, I'll yield now to my friend, Senator Enzi.

                   Opening Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman.
    Our children do deserve to receive the best education our 
country can provide for them. Yet too many of our students 
continue to be ill-served by the schools they attend and either 
fall behind or drop out of school. This is not good for their 
future, nor is it good for our country's future.
    Our economy depends on an educated and skilled workforce to 
be successful in the global market. In the United States, we 
face two major challenges for students entering the workforce. 
First, a growing number of jobs require more than a high school 
education. Second, over the past 30 years, one country after 
another has surpassed us in proportion of their entering 
workforce that has at least a high school diploma.
    Every day in our country, about 7,000 students drop out of 
high school. Even for those students who do stay in school and 
earn a high school diploma, there's no guarantee that they've 
learned the basics needed to succeed in post-secondary 
education and the workforce. In fact, nearly half of all 
college students must take remedial courses after graduating 
from high school before they can take college level coursework.
    This lack of preparation means that our college students 
spend more time and money in tuition just to catch up. It's 
hard for them and it's hard for our country to get ahead if 
we're playing catch-up.
    Each year, more than 1 million students enter college for 
the first time with the hope and expectation of earning a 
bachelor's degree. Of those, fewer than 40 percent will 
actually meet that goal within 4 years. Barely 60 percent will 
achieve it in 6 years. Among minority students, remedial course 
participation rates are even higher and completion rates are 
even lower.
    There's no question that some education and training beyond 
high school is a prerequisite for employment in jobs and 
careers that support a middle-class way of life. Lifetime 
earnings for individuals with a bachelor's degree are, on 
average, almost twice as high as high school graduates. 
However, the message has not yet resonated with the public at 
large.
    A National Journal poll recently found that people ranked a 
college education fourth in importance behind raising a family 
and ensuring that their children had more opportunities than 
they had, owning a home, and being able to pursue a rewarding 
career. We must be very clear. A high school diploma and some 
additional education or training is necessary to be successful 
in today's economy. It's also important in order to achieve the 
very things that are ranked one through three in the same poll.
    I do a little interesting experiment when I go into junior 
high schools. I like to ask students how much they think 
they'll make when they get out of high school. And the average 
student thinks with a high school diploma that they're going to 
make $45,000. I don't know what job they're going to get with 
that.
    Once first in the world, America now ranks 10th in 
proportion of young people with a college degree. Less than 40 
percent of Americans hold an associate or bachelor's degree, 
and substantial racial and income gaps persist. The projections 
are that within a decade, 6 out of 10 Americans must have a 
degree or a recognized credential to succeed in the workforce.
    This being the case, we're facing a major deficit of 
skilled workers, which in turn threatens our ability to grow 
economically. We used to have the best educated workforce in 
the world. But that's no longer true. The Federal Government 
does have a role to play in improving the education of our 
Nation's children through programs supported under the Head 
Start Act, the Elementary and Secondary Education Act, Perkins 
Career and Technical Education Act, and the Higher Education 
Act.
    The skills students learn in the earliest grades are the 
building blocks to their success in high school, college, and 
the workforce. Our country cannot continue to be competitive in 
the global economy if we do not have an educated workforce.
    I want to welcome and thank all the witnesses who are here 
today, and I look forward to hearing from you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Enzi.
    We'll introduce our panel from left to right, and I'll 
yield to the Senator from North Carolina for the purposes of an 
introduction.

                       Statement of Senator Hagan

    Senator Hagan. Thank you very much, Mr. Chairman, and also 
thank you and the Ranking Member for holding this tremendously 
important hearing today. I am proud to have the opportunity to 
introduce Jenn Mann, the vice president of Human Resources at 
the SAS Institute in Cary, NC.
    SAS is the world's largest privately held software company 
providing software and services to a wide range of customers. 
SAS employs nearly 5,000 people in North Carolina, and I'm 
proud that this excellent company is represented on this panel 
today.
    Ms. Mann has had a long and distinguished career advocating 
for change and innovation. She joined SAS in 1998 and in 2008 
was promoted to her current role where she is responsible for 
developing and guiding the Human Resources Division at SAS, 
particularly by articulating the organization's strategy to 
attract, reward, and retain a top-notch workforce. Ranked on 
the Fortune 100 best companies to work for list since this 
list's inception, Ms. Mann leads a global workforce of over 
12,000 employees with a myriad of talents and skills.
    As I travel across North Carolina, no matter where I am, I 
hear the same refrain, and that is that we need more people 
with high-level skills in the science, technology, engineering, 
and math subjects. And it is companies like SAS that are 
looking to hire people with these skills. Without this trained 
workforce, our American companies will suffer.
    Ms. Mann, I welcome you. I give you a warm welcome to our 
hearing today, and I look forward to hearing your thoughts.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Hagan.
    Our next witness will be Mr. Charles Kolb, president of the 
Committee for Economic Development, an organization dedicated 
to U.S. economic and social policy. Mr. Kolb has nearly 10 
years of government service, holding senior level positions for 
the White House, Office of Management and Budget, and 
Department of Education. In addition, he practiced law at two 
Washington, DC law firms, Covington & Burling and Foreman & 
Dyess.
    Our next witness is Dr. Eric Hanushek, currently the Paul 
and Jean Hanna senior fellow at the Hoover Institution at 
Stanford University. Dr. Hanushek is an accomplished researcher 
and leader in the development of the Economic Analysis of 
Educational Issues. His experience also includes government 
services as well as numerous academic appointments.
    And our last witness is Dr. Richard Murnane, who currently 
serves as the Juliana W. and William Foss Thompson Professor of 
Education and Society at the Harvard University Graduate School 
of Education. Dr. Murnane is also a research associate at the 
National Bureau of Economic Research, and his research is 
focused on the intersection between education and the economy.
    We thank all of you for being here today, and your 
testimonies will all be made a part of the record in their 
entirety. I'll ask you to sum up your testimony--in say 5 
minutes. If you go over five, that's fine. Don't worry about 
it. I don't think we've got so many people here we have to 
worry too much about--but if you go over eight or nine--once 
you get close to 10 minutes, then I'll get nervous. OK? But try 
to keep it less than 10 minutes, anyway. OK?
    Ms. Mann, we'll start with you. Welcome.

 STATEMENT OF JENNIFER MANN, VICE PRESIDENT, HUMAN RESOURCES, 
                    SAS INSTITUTE, CARY, NC

    Ms. Mann. Thank you. Chairman Harkin, Ranking Member Enzi, 
members of the committee, thank you for the opportunity to 
participate in today's hearing. This is a very important topic 
and one that is very near and dear to us at SAS.
    As Senator Hagan pointed out, SAS is headquartered in Cary, 
NC, and is the market leader in business analytic software and 
services and the largest privately held vender in the business 
analytic space. SAS has been in business for 36 years and 
employs more than 12,000 employees in 56 countries.
    From a business perspective, SAS helps our customers in all 
industries solve critical business problems by integrating and 
analyzing data and sharing the insights gained from that 
analysis through various reporting capabilities. In short, SAS 
provides our customers with knowledge about their business by 
ensuring that every decisionmaker has the right information at 
the right time and in the right format.
    For example, we help pharmaceutical companies use SAS to 
analyze clinical trials before FDA approval. Manufacturers use 
SAS to better understand product quality and their supply 
chain. And the world's largest banks use SAS to detect fraud 
and potential money laundering, and both State and Federal 
Governments use SAS to detect fraud, waste, and abuse of 
government programs.
    In addition to being recognized as an industry leader, we 
are widely recognized as an employer of choice, having been 
recognized consistently high on Fortune's 100 best places to 
work list. This is important, because people want to come to 
work for SAS, and we want to retain the best and the brightest 
in the industry.
    Given our business, the skills that we look for include 
statistics and advanced analytics, multiple programming 
languages, data modeling and data integration experience, and 
given the rapid developments in cloud and mobile computing 
applications, we're also looking for expertise in these areas 
as well. Typically, the level of expertise that we are seeking 
is at the post-graduate and Ph.D. level. Almost all of our 
employees have at least an undergraduate degree, with a large 
percentage of our staff having some type of advanced degree.
    The pool of candidates meeting these requirements is small, 
and the competition for these candidates is fierce. Even with 
SAS's widely recognized culture and reputation, we can no 
longer rely on our brand alone to attract and recruit talent. 
In my opinion, the largest impediment that SAS faces in 
attracting qualified applicants relates to our educational 
system.
    An ideal curriculum path for someone who wants to come to 
work for SAS would study science, math, engineering, and 
technology at the high school level. Once in college, these 
students would also study computer science and information 
management and take more quantitative STEM courses or 
analytical or statistic courses. And at the graduate level, 
students would then pursue a master's or Ph.D. in STEM-related 
fields.
    As I describe in greater detail in my written statement, 
it's fairly well established that our elementary and secondary 
school systems are not preparing or encouraging students to 
study STEM or computer science. And our post-secondary system 
is not effectively keeping those interested in STEM or computer 
science enrolled in these courses.
    As the Change the Equation Coalition notes, a literate 
nation not only reads. It computes, investigates, and 
innovates. Therefore, we must have the educational 
infrastructure in place to ensure that we have students 
prepared with the right skill set and knowledge, including 
computer science.
    SAS shares the belief that education is the economic driver 
for innovation, and, as a result, the commitment to education 
drives our company's policy, workforce, and philanthropic 
efforts. I've described in great detail in the written 
statement many efforts that we're undertaking to help ensure 
the workforce of today and tomorrow have the right skills. But 
let me highlight a few of those efforts.
    From a policy perspective, SAS participates in the 
Computing in the Core Coalition, which exists to bring 
awareness to the lack of standards relating to computer science 
education, including a lack of professional development and 
teacher certification in this area; from a workforce 
perspective, developing innovative programs to start teaching 
children about careers in computer science at a younger age. 
These programs include training high school teachers to program 
in SAS software language and providing them with software and 
instructional materials for their classroom use free of charge.
    We've also developed a program called Discover, Lead, and 
Solve that brings high school students already learning SAS 
programming to our SAS campus to interact with SAS 
professionals to help translate what they are learning in the 
classroom into real-world uses. And from a philanthropic 
standpoint, our community relations team launched a project 
called the Algebra Readiness Initiative, which was intended to 
increase the number of middle school students prepared to be 
successful in Algebra I, which is a gateway course for STEM and 
computer science.
    The key was to use specialized SAS software to identify 
those students who were not enrolled in Algebra I but who had 
the potential to do well. The first year for this program was 
the 2010-11 school year, and SAS is pleased to say that during 
the first year of enrollment, enrollment in Algebra I increased 
by 38 percent across the districts and 96 percent scored at or 
above proficient.
    We're also working with universities across the country to 
develop masters in analytics programs and certifications. But 
it will take some time before the supply of these students 
meets the demands.
    From an overall business perspective, SAS is extremely 
encouraged by the Common Core State Standards. We believe that 
this effort is a major step forward in helping us ensure 
rigorous, consistent educational standards across the United 
States that will help us catch up with our international 
counterparts.
    In summary, even with SAS's reputation and culture, we are 
having difficulty finding technical talent needed to keep up 
with a growing market. This is not just a problem for SAS. It 
is a problem for all of us. As reported by the Bureau of Labor 
Statistics, more than 800,000 high-end computing jobs will be 
created by 2018, making this one of the fastest growing 
occupational areas. If we don't make change, we will not be 
ready.
    I appreciate the opportunity to share the challenges and 
strategies that SAS is using to address this issue.
    [The prepared statement of Ms. Mann follows:]
                  Prepared Statement of Jennifer Mann
                                summary
    SAS is the world's largest privately held software company that 
provides software and services to a wide range of customers. We are 
best known for our analytical software, which enables our customers to 
use data to solve complex problems, often in real time. Leading 
analysts recognize SAS as the market leader in many of the industry 
segments in which we compete, based both on market share and quality of 
offering. As a company, we invest heavily in research and development, 
mostly here in the United States; on average we invest about 24 percent 
of revenues in R&D. This R&D investment is necessary to keep our 
products responsive to customer and market demands. We compete with 
other global companies in this space, both those headquartered 
domestically and internationally.
    The key to SAS' sustained success has always been its people. 
Challenged to innovate, empowered to experiment and inspired to 
collaborate. From a hiring standpoint, SAS needs individuals that 
possess higher level math, statistics, and computer programming skills. 
We also need individuals with extensive domain expertise in specific 
industry segments, such as financial services, health care, and 
government. Finally, we need individuals who also possess ``soft'' 
skills, such as critical thinking and communication skills. These 
skills are important to SAS because a large percentage of SAS employees 
interact with customers, and thus must be able to communicate, 
collaborate, and comprehend. Given the skill set that SAS seeks, we 
look extensively to the graduate level and beyond. Ideally, our 
candidates have professional experience. These skills are highly 
desirable, particularly in companies that are not software developer, 
and, as a result, there is fierce competition for these candidates.
    The remainder of the testimony discusses why there is so much 
competition for qualified individuals, challenges that we see in terms 
of preparing students to enter our workforce prepared, and what SAS, as 
a company, is trying to do to help resolve some of these challenges.
                                 ______
                                 
    Chairman Harkin, Ranking Member Enzi, members of the committee, 
thank you for the opportunity to participate in today's hearing, ``The 
Key to Global Competitiveness: A Quality Education.'' My name is Jenn 
Mann and I am the vice president of Human Resources for SAS. 
Headquartered in Cary, NC. SAS is the market leader in business 
analytics software and services, and the largest independent vendor in 
the business analytics space. Though we started with five employees 36 
years ago, today SAS employs more than 12,000 individuals in 56 
countries. About 5,000 of our employees live in North Carolina, another 
1,000 around the United States, including large offices in Maryland, 
Connecticut, Colorado, Texas and Massachusetts, and smaller sales 
offices in a number of other States.
                          the business of sas
    SAS is about helping our customers solve critical business problems 
by integrating and analyzing data, and sharing the insights gained from 
the analysis through various reporting capabilities. In short, SAS 
provides the Power to KnowTM by ensuring that every 
decisionmaker has the right information, at the right time, in the 
right format. Let me give a couple of examples to more concretely 
demonstrate what SAS enables:

     pharmaceutical companies use SAS to analyze drug clinical 
trials before FDA approval;
     banks use SAS to analyze millions of transactions to 
detect potential money laundering and fraud;
     manufacturers use SAS to understand call center and 
warranty card information to detect both developing product issues, as 
well as problems in the supply chain;
     retailers use SAS to understand which products, in which 
sizes/colors/shapes need to be in which stores in what timeframes, as 
well as optimal pricing for each product;
     State governments use SAS to detect potential overpayments 
from government programs, manage criminal justice offender data, and 
analyze State pension risk; and
     the Federal Government uses SAS, not only to detect fraud, 
waste and abuse, but to improve the assessments and accuracy of 
critical homeland security programs such as E-Verify and cargo 
screening.

    We are a unique company and quite proud of our history and results. 
Although we incorporated in 1976, the base software for SAS was 
developed while our founders were on staff at North Carolina State 
University. Today, SAS is recognized as a market leader in many of the 
industry segments in which we compete, based both on market share and 
quality of offering. We are gratified by the recognition given the 
level of competition in these markets from both domestic and 
international companies. One of the reasons that SAS leads is the 
amount of investment it makes in research and development. On average, 
SAS invests about 24 percent of its revenues annually in R&D 
activities.
    The key to our success is our people. When the founders decided to 
separately incorporate, they had a distinct vision for creating an 
environment and set of work principles that would encourage innovation 
and creativity. From the outset, Jim Goodnight, SAS' founder and CEO, 
has believed that making employees a priority makes good business 
sense, and that it is his job, as CEO to ensure that each employee 
returns the next day. As we note in our 2009 corporate overview, ``The 
philosophy that drives SAS is simple: Put employees and customers first 
and the benefits will follow . . .:'' In short, SAS employees are 
challenged to innovate, empowered to experiment, and inspired to 
collaborate.
                         corporate recognition
    There have been many articles and reports that independently 
document the SAS culture, including a Stanford Business School study 
and a lengthy report several years ago on 60 Minutes. As the person 
responsible for Human Resources, the ``evidence'' that I am most proud 
of is the continuing recognition in the United States and abroad that 
SAS is ``a great place to work,'' according to Fortune magazine. For 
2012, SAS ranks No. 3 on the list; for the two previous years, we were 
the best place to work. I am not exaggerating when I say that this 
recognition, which is largely based on employee feedback, is critically 
important to our CEO and other senior executives.
    This background is important because people want to come to work at 
SAS, and we want to recruit and retain the best and the brightest. And, 
because of our culture and employee commitment, we have an industry-low 
employee turnover rate (4 percent, versus 20 percent for our 
competitors.)
                            sas hiring needs
    Given our business, SAS recruits for specific skills. The skills 
that we are looking for today include:

     SAS certification or SAS programming skills (SAS itself is 
a computer language);
     Programming skills in Java, C, C++, Unix, and other 
languages;
     Database experience, including experience in SQL, Oracle 
and others;
     Adobe Flash/Adobe Flex, which are Web visual technologies; 
and
     HTML 5

    Given rapid developments in cloud and mobile computing 
applications, we are also looking for expertise in:

     IOS development for mobile applications;
     Grid computing technology capabilities and expertise;
     Software as a Service capabilities and expertise;
     Network storage capabilities and expertise; and
     Data management/big data knowledge and expertise.

    In addition to these specific skills, SAS also needs higher level 
expertise in several different areas. From an analytical perspective, 
SAS recruits talent with deep analytical expertise in the areas of 
statistics, operations research, and econometrics. Typically, the level 
of expertise that we are seeking is at the post-graduate level, 
particularly at the Ph.D. level. As important, we need individuals with 
substantive domain expertise in almost all industry areas, such as 
health care, financial services, energy, retail, manufacturing, and 
government (both State and Federal). Almost all of our employees have 
at least an undergraduate degree, with the overwhelming majority of 
staff having at least some type of advanced degree.
    The pool of candidates that can meet these requirements is not 
large, and I will discuss some of the reasons for this and what SAS is 
doing to try to rectify this in a moment. I do want to mention, 
however, that as important as these qualities are, equally important to 
SAS is that our employees, even those working in our consulting and 
Research and Development functions, also need to have ``softer'' 
skills. These include:

     Relationship skills;
     Ability to critically think and solve problems;
     Collaborate; and
     Be self-directed learners.

    The reason we seek these skills is twofold. One is that many of our 
employees are directly engaged with customers. They need to be able to 
communicate with these customers and to translate the information that 
they receive into actionable items. The second, related reason is that 
we want to become a trusted business partner for our customers. We want 
to be the first place our customers call when they have complex 
problems that they need to solve. Beyond having the relevant expertise 
in computer programming and analytics, our employees need to be able to 
build these kinds of collaborative relationships with our customers.
    Another unusual feature of SAS is that we do not outsource 
functions. For example, we offer onsite child care and health care. The 
care providers, nurses, doctors, and staff are all SAS employees. We 
have several cafeterias in Cary--the employees of the cafeteria are SAS 
employees. We have landscaping requirements and the individuals that 
handle landscaping are SAS employees. I mention this because there are 
some opportunities at SAS that do not necessarily require post-
secondary employment, but these positions are very few. In most 
instances, the people that we are looking for, even in these positions, 
have extensive experience.
                         recruitment strategies
    Given the total package of skills that SAS seeks, our recruitment 
tends to focus on those already working professionally, supplemented 
with recruitment at the graduate and Ph.D. levels. The competition for 
these skills is extremely fierce. The ability to program SAS, by 
itself, is a very desirable skill that is sought in a variety of 
careers, including technology, manufacturing, finance and health care 
(particularly the pharmaceutical sector.) While people do want to work 
for SAS given our culture and commitment to employees, our brand alone 
is not enough to attract the types of talent that we need. We have, 
instead, begun to be more proactive about our recruitment practices, 
and have started using the power of networking and social media to help 
identify potential candidates before our need arises. We use a 
combination of social networking sites and Web searching to identify 
potential candidates. Once we have identified a pool of candidates, we 
can then tailor recruiting campaigns to educate individuals about SAS 
opportunities, and ultimately, to encourage to come to work for SAS. To 
illustrate, while historically much of SAS' recruiting has come from 
North Carolina State University, we decided recently to expand our 
search. We identified the top skills that we needed, and then matched 
these skills with the top 10 universities graduating students with 
these skills. Using a certain search methodology and key terms, we 
constructed a search and identified about 500 potential students. Once 
the list of candidates was identified, we could construct 
individualized recruitment campaigns, complete with links to job 
postings at SAS. This is a new strategy and we are encouraged by the 
early returns.
          educational pathways and long-term hiring challenges
    An ideal curriculum pathway for someone wanting to come to SAS 
would look something like the following: children in high school pursue 
courses of study in science, technology, engineering and math (STEM). 
Once entering college, majors would include computer science or 
information systems; quantitative courses in STEM, or analytical/
statistical courses. At the advanced degree level, fields of study 
could include advanced analytical degrees, Masters or Ph.D. degrees in 
STEM-
related areas, statistics or applied math, or computer science.
    As I stated, the pool of candidates for most of our positions is 
limited. Yet, as noted by the ``Change the Equation (CTEq)'' coalition 
(of which SAS is a member), ``STEM is an economic imperative. Experts 
say that technological innovation accounted for almost half of U.S. 
economic growth over the past 50 years and almost all of the 30 
fastest-growing occupations in the next decade will require at least 
some background in STEM.'' The Bureau of Labor Statistics estimates 
that by 2018, more than ``800,000 high-end computing jobs will be 
created, making it one of the fastest growing occupational areas.'' 
(Source: Computing in the Core: Top 10 Facts About Computing Science.) 
As CTEq eloquently summarizes, ``A literate nation not only reads. It 
computes, investigates and innovates.'' SAS could not agree more with 
this sentiment.
    At the same time, we are not producing enough graduates in these 
areas. As further documented by CTEq:

     Only 45 percent of high school graduates in 2011 were 
ready for college work in math and 30 percent in science;
     In 2009, only 34 percent of 8th grade students were rated 
proficient or higher in a national math assessment and more than 1 in 4 
scored below the basic level;
     According to 2009 test results of an international exam 
given to 15-year-olds, U.S. high school students ranked significantly 
behind 12 industrialized nations in science, and behind 17 in math.

    According to the Higher Education Research Institute at UCLA, in 
2009, 34.3 percent of White/Asian American freshmen students intended 
to pursue STEM studies and 34.1 percent of Underrepresented Minorities 
planned to pursue STEM studies. In looking at graduation rates for 
freshmen indicating an interest in STEM in 2004, the same study found 
that only 24.5 percent of White students completed STEM degrees within 
4 years, and 32.4 percent of Asian American students finished within 4 
years. Comparative statistics for Latino, Black and Native American 
students are 15.9 percent, 13.2 percent and 14.0 percent, respectively. 
The 5-year completion rates, respectively, for all groups are: 33 
percent, 42 percent, 22.1 percent, 18.4 percent, and 18.8 percent. As 
alarming, the same study suggests that a large percentage of students 
in all demographic groups who initially express interest in pursuing 
STEM studies do not complete any degree, even within 5 years. (Source: 
``Degrees of Success: Bachelor's Degree Completion Rates Among Initial 
STEM Majors,'' Higher Education Research Institute at UCLA, January 
2010.) The point is that the problem is not just preparing students at 
the K-12 level to study math and science; as a Nation, we also need to 
examine what is occurring at the collegiate level that discourages 
students from remaining in STEM disciplines.
    An equally acute need, for SAS and for our Nation, is having 
students who are literate computer programmers, both in commercial 
grade software and in SAS. This may be our single greatest hiring need, 
and we are competing for this limited talent not just with other 
software companies, but with our customers, who need this talent as 
well. Unfortunately, there are real challenges to encouraging the study 
of computer science, separate and distinct from the challenges 
associated generally with STEM. The most critical includes the fact 
that most States do not have standards to encourage the study of 
computer science, and even fewer have programs to certify teacher 
competence in computer science. Too many people assume that 
understanding how to work a computer or mobile device is sufficient to 
serve as ``computer science'' education. To us, this is merely an 
example of technology literacy. In contrast,

          ``computer science education means an academic discipline 
        that encompasses the study of computers and algorithmic 
        processes, including their principles, their hardware and 
        software designs, their applications, and their impact on 
        society.''

(Source: Computing in the Core, ``Computer Science in K-12 Education: 
Critical 21st Century Skills and Understanding/Understanding Computer 
Science Education, Information Technology and Technology Literacy'').
 embracing education is both an economic imperative and philanthropic 
                            passion for sas
    SAS has been committed to helping improve education in our 
communities for many years. This commitment stems from the belief of 
our CEO that education is the driver of economic growth. Having a 
strong educational system is critical to our long-term success as a 
company. This belief not only permeates our culture, but is a driver 
for many of our workforce, policy, and philanthropic activities.
    From a workforce perspective, SAS has developed outreach 
initiatives to try to reach high school students to educate them about 
potential technology career opportunities and to encourage them to 
consider SAS as a future employer. One is a formalized program that we, 
in Human Resources, have titled ``Discover.Lead.Solve.'' Held in 
February 2012, SAS brought together five high schools (including 60 
students) in North Carolina and Virginia. What these high schools had 
in common is that each is teaching SAS programming and each of the 
student participants is taking this programming course. The goal was to 
help translate what they are learning in the classroom to real world 
possibilities. In other words, how do the skills they are learning in 
the classroom translate into helping local law enforcement solve 
crimes, or enable health care providers deliver better patient care. A 
second important goal is to provide a career exploration platform for 
students to see what a 21st century business looks like. The program, 
which is free of charge to the participating schools, lasts for about 
the length of one school day. The presenters during the day are all SAS 
employees, holding a variety of positions within SAS. The interesting 
thing about these events is that they involve collaboration across SAS 
enterprises--Human Resources, SAS Education Practice (which is our 
business unit focused on the Education industry), and SAS Community 
Relations were involved in the planning and execution of the event, and 
individuals from a wide number of SAS business units and R&D were 
involved in the actual events. We expect Discover.Lead.Solve to be an 
annual event.
    SAS has held similar kinds of programs in the past, and we 
continually get requests to host workshops for schools at all different 
levels. Given the number of requests, we utilize an approach to ``act 
regionally while thinking globally'' in deciding which requests to 
accommodate. One school request is worth mentioning, involving a 
program with an Algebra I class from a local high school, Warren New 
Tech High School in Warrenton, NC. We have had Warren come to SAS each 
of the last 2 years. For those on the committee not familiar with this 
high school, it serves a predominantly low-income student population, 
with roughly 70 percent of the student population on free or reduced 
school lunch. After coming to SAS and learning about computer science 
and careers in technology, here is the feedback that we received from 
the Algebra I teacher:

          ``Half of my students did not pass Algebra I last year and 
        are in my class. Students have vague aspirations to get into 
        college or the military service. An overwhelming majority have 
        not made the connections between their success now and future 
        career opportunities. Many have not been exposed to what is out 
        there. I would like for the visit to touch on some of these 
        themes: hard work now equals future success and how important 
        studying math is. My goal is for the visit to expose them to 
        what is out there and encourage them to take their coursework 
        even more seriously. . . . Many deep and sincere thanks for all 
        your help and having an awesome site visit. My students walked 
        away from the visit inspired and motivated to keep working 
        hard. Already I am noticing some huge changes in my classroom. 
        Students feel a sense of purpose that did not exist before. I 
        credit the visit for making them realize what they were 
        missing.''

    Another internally collaborative effort involves acquainting 
students with SAS Programming. For several years, SAS has provided SAS 
resources--including instructional materials and guides to university 
professors, free of charge, to help them incorporate SAS into classroom 
instruction. More recently, SAS has expanded this effort to the high 
school level in a program named ``SAS Programming for High School.'' 
This program is a week-long program whereby we bring high school 
teachers from around the country to SAS for a 1-week training course on 
SAS programming. Once the course is completed, we provide teachers with 
the software and instructional materials they need to teach SAS 
programming back in their schools. All software and materials are 
provided at no cost to educators, and any travel fees incurred may be 
reimbursed through Perkins funds.
    In a global economy, high school graduates with insufficient 
quantitative skills will be unprepared for college programs in 
technical majors required for STEM careers. As our own course 
progressions suggest, entry into these careers begins with proper 
preparation and subsequent access to advanced level courses. One of the 
critical gateways that facilitate this preparation in middle school is 
access to Algebra I.
    In response to this gap, SAS Community Relations has launched the 
``Algebra Readiness Initiative (ARI).'' The objective of the ARI was to 
increase the number of students prepared to be successful in Algebra I 
in middle school. The collaboration involved not just SAS, but the 
Triangle High Five Partnership consisting of five public school 
districts in the Triangle (Chapel Hill-Carrboro, Durham, Johnston, 
Orange and Wake County.) Planning for the ARI began in 2009. 
Superintendents from these school districts, using specialized SAS 
software to analyze district school data, identified that in most 
cases, less than 50 percent of 8th graders who were predicted to be 
successful in Algebra I were actually not enrolled in the course. After 
initial meetings with superintendents and math curriculum directors, 
SAS hosted a number of meetings for principals, teachers, and guidance 
counselors to discuss ways in which the districts could collaborate to 
address this gap. Each district developed their own plan, based on 
these discussions, tailored to meet their unique populations and 
available resources. The result was that in the spring, 2010, all five 
districts modified their approaches to ensure that students capable of 
being successful were actually enrolled in Algebra I for the 2010-11 
school year. As a result, 8th grade enrollment in Algebra I increased 
by an average of 38 percent across the districts, and 96 percent of the 
students scored at or above the proficient level. The initiative 
continues to focus on teacher training to ensure that educators are 
better prepared with deeper math content knowledge, especially 
throughout middle school grades. This strategy will help teachers in 
North Carolina use the lessons learned as they transition to teaching 
on the Common Core State Standards.
    These examples suggest that building partnerships with the 
surrounding school infrastructure bears important rewards. The 
partnerships are not limited to K-12 institutions, but have to include 
institutions of higher education as well. In SAS' case, besides 
providing teaching and materials support, we have been actively engaged 
with North Carolina State University to develop a Masters of Analytics 
program. Essentially, the only way we are going to produce people with 
kinds of analytics expertise that we and other industries require is to 
help build the actual academic content for these programs. SAS is 
extremely encouraged by our efforts to create masters programs, with 
new ones at Texas A&M, Louisiana State University, and Northwestern 
launching this year. These are in addition to more than 40 certificate 
programs we support. Despite these efforts, the supply of analytics 
students still cannot keep pace with the demand for these skills.
    From a policy perspective, I have already mentioned our involvement 
with CTEq, as well as our involvement with the Computing in the Core 
(CinC) coalition. We are hopeful that the message and efforts of the 
CinC coalition will lead to not just more emphasis on the distinct 
needs of computer science education, but will encourage States to think 
more critically about the curriculum requirements and professional 
certification that is needed for this course of study. It is an 
absolute imperative for our Nation.
    I do want to spend a few minutes talking about the importance of 
the Common Core State Standards (CCSS) and what SAS believes it will 
accomplish. Under the CCSS initiative, math courses in North Carolina 
and 45 other States will, for the first time, be based on international 
benchmarks and comparable to other countries that outrank us on 
assessments, such as the Program for International Assessment (PISA). 
Beginning next year, math courses in North Carolina, Massachusetts, or 
any of the other participating States and District of Columbia will be 
comparable. SAS believes that the CCSS presents a chance to catch up 
with other countries that are out-performing the United States. This is 
a critical step in preparing our students for the global economy, and a 
step that the business community can and should fully support. However, 
for the CCSS to be successful, the standards must be implemented with 
consistency and fidelity. We must also provide training to prepare our 
teachers for this huge shift. While the States have signed on to a 
consistent set of standards, the timeframe for implementation varies 
widely. North Carolina, for example, has agreed to implement the 
standards by the start of the 2013 school year, with testing to begin 
at the end of the school year. This is an enormous step forward, and 
while we have concerns regarding whether North Carolina teachers (and 
teachers in other States) are prepared to teach to the more robust 
requirements, we will take this moment to celebrate and support 
progress.
    There are any number of other SAS educational initiatives that I 
could mention, but I think I will conclude by highlighting just one. 
Through the efforts of SAS' Community Relations team, we were a 
founding partner of the North Carolina 1:1 Learning Collaborative. 
According to the Southern Region Education Board, nearly 3,000 students 
in the region drop out of high school every school day. Nationally, the 
studies suggest that 1 in 4 students leave school without graduating 
annually. While the reasons for the high drop-out rate are complicated, 
we believe that one factor may be boredom, and the limited use of 
technology in the classroom. Other studies have validated that the use 
of technology--including the use of computers and/or laptops and access 
to the Internet--may be key to encouraging middle school students to 
pursue STEM education. (Source, Lenovo 2011 Global Student Science and 
Technology Outlook). The North Carolina 1:1 Learning Collaborative 
attempted to address these issues by providing laptops, professional 
development and critical support to schools and rural districts in 
North Carolina. In short, it was a pilot effort to help participating 
high schools in North Carolina take a strategic approach to creating 
future-ready schools. The effort was evaluated by the Friday Institute 
at NC State, and has culminated in Redesign 2.0, and a framework for 
how to implement and replicate in other schools and communities. A 
growing number of schools are using this framework to launch their own 
1:1 Learning Initiatives. We believe that students who graduate from 
these schools will be prepared to work and prosper in our global 
economy.
                               conclusion
    Even with the culture, commitment and resources of SAS, we are 
having a difficult time finding the talent that combines the right 
technical skills with necessary ``soft'' skills. We are competing for 
these exceptional talents with many other companies, which has forced 
us to become proactive relationship-builders to successfully recruit 
the talent we need. Education at all levels is the key to our future, 
as a company and as a Nation. Although much work remains to put the 
United States back into a competitive position with the educational 
systems and standards of other nations, SAS believes that there is 
important work that has been done. Because of our commitment, we are 
trying to do our part, and appreciate this opportunity to share our 
story. Thank you and I am happy to answer any questions you might have.

    The Chairman. Thank you very much, Ms. Mann.
    And now we'll turn to Mr. Kolb.
    Welcome and please proceed.

    STATEMENT OF CHARLES KOLB, M.A., J.D., PRESIDENT OF THE 
    COMMITTEE FOR ECONOMIC DEVELOPMENT (CED), WASHINGTON, DC

    Mr. Kolb. Thank you very much. Mr. Chairman, Senator Enzi, 
Senators Bingaman and Hagan, thank you very much for inviting 
me to speak on behalf of the Committee for Economic 
Development.
    CED was founded in 1942, so this is our 70th anniversary. 
And as some of you may know, one of our early signature 
projects led to the development of the Marshall Plan to rebuild 
Western Europe after World War II. Since then, we've been 
active with our 200 business leaders on the board focusing on 
issues such as campaign finance reform, healthcare, deficit 
reduction, the structure of the Federal debt, globalization and 
trade, corporate governance, and, of course, education.
    Mr. Chairman, I think I'm correct in saying this is the 
first time in CED's 70 years of history where we are actively 
engaged in all aspects of education reform--early childhood 
education, K-12, and post-secondary education--where we will 
have a report released later in April.
    I want to point out at the beginning that next year is the 
30th anniversary of A Nation at Risk. And that report launched 
a wave of accountability, a focus on standards assessment, 
measurement, and testing, which I think, on balance, has been 
pretty good for the country. You've seen it on a bipartisan 
basis. Presidents Bush and Clinton embraced National Education 
Goals. President George W. Bush had No Child Left Behind, and 
President Obama has Race to the Top. I think it's fair to say 
that over 30 years, you've had a focus on K-12 reform, which 
has been good, not finished, but good.
    Meanwhile, during that 30-year period--this may be 
controversial, but I'm going to say that post-secondary 
education pretty much got a pass. A lot of the focus when I was 
here testifying before was on important issues like access and 
financing. But only recently, within the last few years, have 
people begun to ask questions about access to what? What is the 
quality of our post-secondary education? What should our young 
people know and be able to do as a result of their experience 
either with a 2-year, 4-year, or a proprietary school?
    And my thesis for you this morning is that there are three 
factors that are driving this new wave of accountability for 
post-secondary education. And I sum them up as cost, 
competition, and technology.
    The cost should be pretty obvious. It was George Washington 
University in the city that was the first institution to charge 
$50,000 to go to college. That's the full sticker price. And 
this year, we've seen that Sarah Lawrence College is close to 
$60,000. Now, that's a lot of money for most people. And if 
you're buying a luxury automobile at $60,000, particularly if 
you have to buy four of them in a row or five or six, depending 
on how long it takes you to graduate, you're going to ask a lot 
of questions about what kind of car you're getting for that 
$60,000.
    I think this is a good part of the accountability movement. 
So cost is driving questions that weren't asked before.
    Second, competition. I would refer you to one book which I 
found really fascinating. It's by the scholar, Ben Wildavsky, 
at the Kauffman Foundation in Kansas City. It's called The 
Great Brain Race. And Ben Wildavsky makes the point that the 
competition we face in education is for supply--it's on the 
supply side, it's on the demand side, it's competition for 
students, it's competition for faculty, and it's global.
    You see things happening in the Middle East, in Asia, in 
India, where those countries are making major investments to 
create first-class, world-class institutions intended to rival 
our own. So we can't simply rest on our laurels and 
congratulate ourselves on having the best institutions. We've 
got real competition.
    And then, finally, the point about technology, I think, is 
really interesting, and I think it's a point that makes it 
clear that the current business model of many of our 2-year and 
4-year institutions is broken. Now, I don't want to imply that 
technology is a magic bullet. I'm not talking about turning 
everything into online courses.
    But if you look at what's happening at places like MIT or 
Western Governors University, you see a different approach to 
delivering post-secondary education. And I would point out to 
you two really fascinating articles that were in Monday's New 
York Times about massive open online courses.
    Dr. Hanushek, one or two of the examples came from 
Stanford, where you had two professors who had an online course 
called Building a Search Engine, which had 90,000 students. You 
had another Stanford professor who had an artificial 
intelligence course that attracted 160,000 students in 90 
countries and was translated into 44 languages versus 200 
students on campus at Stanford and 30 people who took the final 
exam. I would submit to you that technology by itself is going 
to up-end the existing business model and change the focus on 
bricks and mortar into something totally different that we 
can't necessarily identify even now.
    The Committee for Economic Development will have a report 
on some ideas around postsecondary-education reform that will 
come out late next month. And we're going to look at issues 
such as transparency, efficiency, productivity, and innovation 
throughout the sector. These are words that typically don't 
come up in the post-secondary sector. They're more in the 
corporate sector.
    But we think that this is a very positive time for American 
post-secondary education. And CED, I hope, Mr. Chairman, can do 
in post-secondary education what I think you know we've tried 
to do in earlier reports on early childhood education and K-12.
    Thank you very much.
    [The prepared statement of Mr. Kolb follows:]
             Prepared Statement of Charles Kolb, M.A., J.D.
                                summary
    The Committee for Economic Development is a nonpartisan, business-
led public policy organization based in Washington, DC. We have close 
to 200 senior business leaders and university presidents on our Board 
of Trustees, and our current co-chairs are Roger W. Ferguson, Jr., the 
CEO of TIAA-CREF, and Donald Peterson, the former CEO of Avaya.
    Until fairly recently, America's postsecondary-education sector has 
managed to avoid the types of accountability questions that have 
characterized K-12 education policy discussions. For much of the last 
30 years, post-secondary education's public policy debates have 
primarily concerned important questions relating to access and 
financing but relatively few questions about ``access to what? ''--
about the quality of that American postsecondary-education experience 
and what our young people should know and be able to do as a result of 
their experience.
    In the last few years, however, that benign neglect has started to 
change. Today there are three factors that are driving this change and 
resulting in more questions being asked about American post-secondary 
education. These factors are cost, competition, and technology.
    These accountability questions are at the heart of rising 
competition--competition that wasn't there 20 or 30 years ago. 
Moreover, that competition is for both supply and demand; it is also 
global in its nature. Read the excellent study entitled ``The Great 
Brain Race,'' by Ben Wildavsky, and you will appreciate that 
universities around the world are competing for both talented students 
and faculty. Countries such as China, India and the United Arab 
Emirates are making substantial public investments in post-secondary 
education--in some cases trying to emulate the best American research 
institutions through billions of dollars worth of infrastructure and 
human capital investments.
    We are also seeing an increased focus on promoting greater 
transparency, efficiency, productivity, and innovation throughout 
America's post-secondary sector. The change is being ably assisted by 
reports such as McKinsey & Company's 2011 study, ``An economy that 
works: Job creation and America's future.'' Likewise, the champion of 
the concept of ``disruptive innovation,'' Harvard University professor 
Clayton Christensen has partnered with Innosight to write a must-read 
study, ``Disrupting College: How Disruptive Innovation Can Deliver 
Quality and Affordability to Post-Secondary Education,'' that details 
the ways in which ``disruptive innovation'' is changing American 
education.
    And it is vitally important that business play a role in shaping 
post-secondary education policy. There's the obvious reason of self-
interest: most CEOs with whom I speak are concerned about the future 
skills of the American workforce. These business leaders are also on 
the frontline when it comes to appreciating the skills that are needed 
in the workforce. And I would add that business leaders can be powerful 
change agents because they have all faced similar challenges and 
competition over the last 20 years in their own activities. They 
understand change, have had to embrace--not fear--it, and can help make 
change happen.
    On behalf of the Trustees and staff of the Committee for Economic 
Development, I thank you for the opportunity to share these thoughts 
with you at today's hearing. CED looks forward to working with leaders 
in Congress, as well as in our States and local communities, to ensure 
that America offers the finest, most efficient, most productive, and 
most affordable range of quality post-secondary education opportunities 
in the world.
                                 ______
                                 
    Chairman Harkin, Senator Enzi and members of the committee, thank 
you for the opportunity to speak with you today. The Committee for 
Economic Development is a nonpartisan, business-led public policy 
organization based in Washington, DC. We have close to 200 senior 
business leaders and university presidents on our Board of Trustees, 
and our current co-chairs are Roger W. Ferguson, Jr., the CEO of TIAA-
CREF and the former vice-chairman of the Federal Reserve Board, and 
Donald Peterson, the former CEO of Avaya.
    CED Trustees decide the policy issues we will address, participate 
in subcommittees to determine our findings and recommendations, and, 
increasingly, engage around the country to promote CED's 
recommendations. We typically do not lobby, and the Trustees who 
participate in our organization are deeply committed to finding 
strategies that will promote greater economic growth and opportunity 
for all Americans.
    This year marks CED's 70th anniversary. Our early work in the 1940s 
led to the creation of the Marshall Plan which helped rebuild Western 
Europe after World War II. In recent years we have presented a business 
voice urging important reforms in areas such as fiscal and tax policy, 
health care, campaign finance, corporate governance, international 
trade and globalization. Throughout much of CED's history, one policy 
area, in particular, has been a major interest for our Trustees: 
education.
    As business leaders, CED Trustees understand that how we invest in 
human capital will determine how productive and competitive we are in 
the global economy. These human capital investments will also determine 
how equipped our citizens will be to meet their responsibilities as 
citizens of a vibrant democracy.
    It is because of these concerns that the Committee for Economic 
Development has become a leading business organization that focuses on 
the importance of education across the education continuum: the early 
years, kindergarten through 12th grade, and, more recently, post-
secondary education. In fact, for the last decade, CED has become known 
around the country for its work in early childhood education. Our work 
with Professor James Heckman, a Nobel laureate in economics at the 
University of Chicago, has focused on efforts to quantify the returns 
on front-end investments in quality pre-K education.
    This effort to consider education spending from an investment 
perspective that asks tough accountability-oriented questions about the 
returns on these investments has had a major impact on early education 
spending around the country in both the public and private sectors. We 
can point to efforts like North Carolina's ``Smart Start'' program and 
PNC Bank's renewed $250 million support for its ``Grow Up Great'' 
initiative in communities across the Nation as successful examples of 
solid support for early childhood programs.
    A serious and sustained accountability movement began for K-12 
education nearly 30 years ago with the publication of the widely read 
report on ``A Nation at Risk.'' That celebrated report led to efforts 
such as the National Education Goals of Presidents George H.W. Bush and 
Bill Clinton, President George W. Bush's ``No Child Left Behind Act,'' 
and President Barack Obama's ``Race to the Top'' challenge.
    Until fairly recently, however, America's post-secondary education 
sector has managed to avoid the types of accountability questions that 
have characterized K-12 education policy discussions. For much of the 
last 30 years, post-secondary education's public policy debates have 
primarily concerned important questions relating to access and 
financing but relatively few questions about ``access to what? ''--
about the quality of that American postsecondary-education experience 
and what our young people should know and be able to do as a result of 
their post-secondary-
education experience.
    In the last few years, however, that benign neglect has started to 
change. Today there are three factors that are driving this change and 
resulting in more questions being asked about American post-secondary 
education. These factors are cost, competition, and technology.
    Let's take cost first. From 1990 to 2009, college tuition and fees 
increased 274.7 percent--much more than health care costs and the 
consumer price index. George Washington University became the first 
university in the country at which total costs reached $50,000, and 
recently Sarah Lawrence College announced a sticker price of over 
$59,000 for a student to attend that institution. Most people 
purchasing a luxury automobile at that price (especially if they had to 
buy a new one each year for 4 years) would ask a lot of questions about 
how much car they were getting for that amount.
    Now, I realize that because of grants, loans, endowment support, 
and other sources of funding, that cost figure may be different from 
what a typical student and his or her family pays, but the fact remains 
that inflation in post-secondary education is unsustainable, may be 
driving many young people to rethink the value of post-secondary 
education in terms of making an investment in their future careers, and 
has resulted in a debt load which has reached approximately $1 trillion 
in student loan debt (exceeding credit card debt for the first time) 
and saddled our young people with financial obligations that often 
circumscribe their future career choices. For many indebted students, 
it is like having a mortgage but not having the house. Their hope is 
that the education and skills they have gained will enable them to 
become gainfully employed.
    At the same time, one solid benefit of these unsustainable price 
increases has been to drive accountability questions similar to the 
ones that Rick Hanushek and others have asked about our K-12 education 
system: when we are outspending the rest of the world on our post-
secondary system, why aren't the results better? Why do so many young 
people who start a college degree drop out? Why are our completion and 
attainment rates not any better? Why are so many resources being wasted 
in this sector? Does this experience lower the motivation for young 
people at a time when they need to be getting as much education as they 
possibly can?
    By the way, we see a similar challenge in America's health care 
sector. Why is it that a country such as France spends about half as 
much on health care as we do but experiences far better outcomes when 
it comes to longevity, infant mortality, and obesity prevention?
    These accountability questions are at the heart of rising 
competition--competition that wasn't there 20 or 30 years ago. 
Moreover, that competition is for both supply and demand; it is also 
global in its nature. Read the excellent study entitled ``The Great 
Brain Race,'' by Ben Wildavsky, a fellow at the Kauffman Foundation in 
Kansas City, and you will appreciate that universities around the world 
are competing for both talented students and faculty. Countries such as 
China, India and the United Arab Emirates are making substantial public 
investments in post-secondary education--in some cases trying to 
emulate the best American research institutions through billions of 
dollars worth of infrastructure and human capital investments. Europe's 
Bologna Project is but one example of a continent-wide effort to 
harmonize degrees among many universities in a way that enables 
students to study in different schools in different countries and get a 
degree that reflects common standards of content and quality. Contrast 
that effort with the immense difficulty we now have in the United 
States of harmonizing credits and degrees between and among 2-year 
community colleges and 4-year institutions.
    And finally, there can be little doubt that the information 
technology revolution of the last several years will have a major 
impact on both the cost of delivering post-secondary education and the 
manner in which such education is transmitted. In 2009, the Committee 
for Economic Development's Digital Connections Council, under the 
leadership of former IBM research chief Paul Horn, released an 
important report on the way in which the IT revolution was impacting 
American post-secondary education. Paul Horn, Chair of CED's Digital 
Connections Council stated that,

          ``While other industries, such as finance and entertainment, 
        have used openness to improve their business model, higher 
        education has been slow to adapt to the digital information 
        age. Creating, analyzing, and transmitting information is vital 
        to teaching and learning, so it is a matter of concern that 
        colleges and universities are lagging in utilizing technology 
        to achieve greater openness to their core missions of teaching, 
        learning and research.''

    Today we can see precisely how such efforts are playing out, 
whether it is through online courses at various proprietary schools, 
MIT's open courseware initiative, or the success to date of Western 
Governors University's approach to online learning in certain 
disciplines where students can earn both baccalaureate and advanced 
decrees at a significantly reduced cost.
    We are also seeing an increased focus on promoting greater 
transparency, efficiency, productivity, and innovation throughout 
America's post-secondary sector. These four words are not terms that 
have traditionally been associated with post-secondary educators and 
administrators--but that situation is rapidly changing. The change is 
being ably assisted by reports such as McKinsey & Company's 2011 study, 
``An economy that works: Job creation and America's future.'' Likewise, 
the champion of the concept of ``disruptive innovation,'' Harvard 
University professor Clayton Christensen has partnered with Innosight 
to write a must-read study, ``Disrupting College: How Disruptive 
Innovation Can Deliver Quality and Affordability to Post-Secondary 
Education,'' that details the ways in which ``disruptive innovation'' 
is changing American education. This study also discusses how such 
innovations can be brought to scale in the near future.
    In 2011, with funding from the Bill & Melinda Gates Foundation, the 
Committee for Economic Development launched a trustee-led subcommittee 
to focus on ways in which greater innovation, productivity, and 
efficiency could drive needed reforms across the post-secondary sector. 
This CED subcommittee is co-chaired by Manpower Group Chairman & CEO 
Jeff Joerres and Bruce MacLaury, president emeritus of the Brookings 
Institution. Another key member of this working group is Kelly Services 
president and CEO Carl Camden.
    Both Jeff Joerres and Carl Camden lead global companies that offer 
what might be called a microeconomic window on workforce trends in this 
country and abroad. Their companies are effectively ``canaries in the 
coal mine,'' because they often detect what is happening in labor 
markets here and around the world before government institutions and 
the media see these trends. Moreover, their business involves, among 
other things, filling positions that range from entry-level jobs to 
more technical positions requiring advanced doctoral degrees in 
engineering and the sciences. So they are in a unique position to see 
the skills being demanded by employers around the world and the skills 
being offered by workers in the countries in which their companies do 
business.
    Both of these CEOs will tell you that for America to be competitive 
at home and around the world, we need more people with more education. 
A high school degree is no longer enough and will be, in many 
instances, insufficient to qualify for many of today's jobs that will 
compensate workers at middle class income levels and above. We also 
need more young people in America who pursue international studies and 
who demonstrate proficiency in foreign languages.
    Achieving the 21st century version of the American Dream will 
require a much more educated citizenry and workforce. We are now a 
knowledge-based and skills-oriented economy, and our education 
investments need to be focused laser-like on programs, strategies, and 
partnerships that can address this constantly changing national and 
international dynamic. Our workers face a competitive environment in 
which their skills must be constantly evolving and increasing if we are 
to have a dynamic and efficient workforce.
    The CED report, which we hope to release in New York City in late 
April, will highlight many of these trends and challenges. We will 
approach these issues from the perspective of looking at what we call 
broad-access institutions, the 2-year, 4-year, and proprietary 
institutions that will provide the facilities and courses that will 
serve most Americans seeking post-secondary education. We explicitly 
are not addressing the elite, research colleges and universities; they 
are important and are often referred to by many as our flagship post-
secondary institutions, but because they serve a much smaller 
population, they are not the institutions that will provide most of the 
opportunities that our future workforce needs.
    The CED report will address issues that relate to State-level 
policies, in particular, State-level financing issues for the broad-
access institutions. We hope to inform and mobilize business leaders 
across the country to become champions of post-secondary education 
reform in ways that will enable State officials to set outcome-related 
goals, develop strategic financial plans, adopt meaningful metrics and 
other approaches that will enhance educational outcomes for these 
institutions.
    Now, I know that I'm being somewhat vague--intentionally so--
because the final CED report is not yet ready for release. But I do 
pledge to this committee that you and your congressional colleagues 
will receive CED's report next month, and I know that our business and 
university trustees will welcome your involvement as we try to engage 
business leaders in this effort in your States and around the Nation.
    And it is vitally important that business play a role in shaping 
post-secondary education policy. There's the obvious reason of self-
interest: most CEOs with whom I speak are concerned about the future 
skills of the American workforce. These business leaders are also on 
the frontline when it comes to appreciating the skills that are needed 
in the workforce. And I would add that business leaders can be powerful 
change agents because they have all faced similar challenges and 
competition over the last 20 years in their own activities. They 
understand change, have had to embrace--not fear--it, and can help make 
change happen.
    It is, in my view, a very positive sign, that within the last 3 
years, there has been a growing interest in the way in which American 
post-secondary education--its opportunities and its challenges--will 
shape the future of our economy and our democracy. There has been an 
increasing number of studies and books on the topic by people such as 
Richard Arum; Derek Bok; Andrew Hacker & Claudia Dreifus; Pat Callan; 
William Zumeta; Joni Finney; Andy Rosen; Clayton Christensen; David 
Breneman; and, Ben Wildavsky. This development is a good sign, in my 
view.
    The Obama administration and major foundations such as the Bill & 
Melinda Gates Foundation and the Lumina Foundation have announced 
important attainment goals that are designed to make America first in 
the world in terms of the percentage of our population that have 
quality post-secondary credentials. We clearly as a nation need to 
increase dramatically both the completion level and the educational 
attainment level of our people.
    But what we've seen from time to time in our K-12 sector is that 
goals can be missed altogether or gamed along the way. We cannot afford 
to experience either of those outcomes anymore. As we strive to meet 
these important completion goals, we should also make sure that we have 
a national discussion--local, State, and Federal--about what it is our 
post-secondary students should know and be able to do. Clearly the 
answer to that question in 2012 has to be fundamentally different from 
what it was even 10 years ago.
    On behalf of the trustees and staff of the Committee for Economic 
Development, I thank you for the opportunity to share these thoughts 
with you at today's hearing. CED looks forward to working with leaders 
in Congress, as well as in our States and local communities, to ensure 
that America offers the finest, most efficient, most productive, and 
most affordable range of quality post-secondary education opportunities 
in the world.

    The Chairman. Thank you very much, Mr. Kolb.
    And now we'll turn to Dr. Hanushek.
    Dr. Hanushek, please proceed.

   STATEMENT OF ERIC A. HANUSHEK, Ph.D., PAUL AND JEAN HANNA 
    SENIOR FELLOW, HOOVER INSTITUTION, STANFORD UNIVERSITY, 
                          STANFORD, CA

    Mr. Hanushek. Thank you, Mr. Chairman, and thank you and 
Senator Enzi and Senator Bingaman and your committee for taking 
leadership on this issue.
    I will state at the beginning and repeat it a couple of 
times that I think this is the most important issue facing the 
Nation today. Our schools, as you mentioned in your 
introduction, are not competitive internationally. They're 
mediocre. They're not the worst, but they're far, far from the 
best. And this has huge implications for the future of our 
children and our Nation.
    The potential difference in our children's future is really 
profound. On the current path with middling schools, we are 
going to be on a low-growth path in the future. And what that's 
going to imply, among other things, is a continuing struggle 
about the distribution of income, about how we use our public 
resources and fiscal deficits.
    The alternative is choosing a different path that has 
better education for our children. And what this implies is a 
higher growth rate, which means that we can solve many of these 
distributional problems and fiscal problems not by getting the 
right balance between revenues and spending, but by increasing 
the size of the pie. And these are huge differences. What 
determines which path we're on is the skills of the American 
worker, and the skills of the American worker are determined by 
the quality of our schools.
    What I want to do is fill in a few of the differences of 
these paths and talk about where we can go, briefly. 
Washington, as I see it from California, is fixated on the 
short run of how to deal with the ramifications of the 2008 
recession. But the magnitude of the differences between the 
cost of the recession and not going into improving our long-run 
growth are just astounding.
    The most important determinant of the U.S. economy, as I 
say, is the skills of the workers in the economy. And when we 
look around the world and look at growth rates, which--growth 
rates determine our future well-being, as you know. I have a 
graph at the end of my written testimony that plots out growth 
rates of GDP per capita between 1960 and 2000 for countries of 
the world. And it plots them out against skills and achievement 
on math tests as seen by the PISA test or other international 
test.
    What you see is that it's virtually a straight line. 
Countries that have improved the skills of their workers grow 
faster. Now, the implications of this are easy to see if we 
just assume that the future is going to look like the past in 
terms of the growth and the impact on growth.
    Take an example where we could move the achievement of our 
students up to the level of, say, Germany or Australia. Now, in 
terms that you know, I'm sure, this is about 25 points on the 
PISA test, on math tests. So if we take this picture and 
project out into the future what that means for the U.S. GDP 
and look at the increase in GDP for somebody born today, who 
would be expected to live for 80 years, remembering that things 
in the future are worth less than those in the present, 
discount it at 3 percent, and we get the present value of that 
difference--$44 trillion for being in Germany and Australia.
    Now, nobody, at least outside of Washington, understands 
what $44 trillion means. But we have a GDP that's less than $16 
trillion today. The total cost of the 2008 recession to date is 
estimated at around $3 trillion.
    Take something closer to home than Germany and Australia. 
Take Canada, which looks kind of like the United States in many 
ways. If we could get the achievement of our students up to 
Canada, the present value of the increased GDP is on the order 
of $75 trillion to $80 trillion. Now, in my estimation, this is 
something that warrants really substantial changes. We should 
take seriously what we can do.
    A couple of things I should say--one is this is not a 
situation of a few bad States dragging us down. I have another 
plot in the back of my written testimony where you can look up 
your own State. But you'll see that our best State, 
Massachusetts, ranks behind 16 other countries in terms of math 
performance.
    It is also not a case that it's just that we have a 
particularly difficult-to-educate population. We do. We have a 
heterogeneous population, and we don't want to minimize that. 
But if you take college-educated students from Massachusetts, 
sort of the best students from the best State, they will still 
rank behind seven countries. Our best students will still rank 
behind the average student in seven other countries.
    This is something that we have to take seriously, in my 
mind. Now, there are different views on how we can go about 
doing that. There are a couple of things I should say quickly. 
One is this is not a matter of just getting more kids to 
graduate from high school or to go to college if they aren't 
learning anything. If students go to school and don't learn 
anything, as measured by achievement, it doesn't count, and 
that's the simple facts. So if they get into college by 
lowering the admission standards, and they don't learn 
anything, we're not going to gain from that.
    There are many potential solutions to this problem. The one 
that I have advocated that some of you may know is improving 
the quality of teachers in the United States. I think that 
that's an extraordinarily important issue. There are, of 
course, many different proposals of how to go about improving 
the quality of our teachers, and I can go into that later. But 
I think that we have to be doing something there.
    The summary is--and I'll stop now and we can talk later--is 
that this is such an important issue to our Nation and our 
future. It determines what our country will look like, whether 
we are an economic leader or not. And if we just do minor 
marginal things, like slightly smaller class sizes or, in my 
opinion, just going after great battles to the common core, 
we're not going to solve this problem. We're not going to lead 
to the kinds of differences that are important to our children.
    [The prepared statement of Mr. Hanushek follows:]
             Prepared Statement of Eric A. Hanushek, Ph.D.
                                summary
    While current policy discussions stress the short run economic and 
fiscal situation, the well-being of our society is much more dependent 
on long run growth. The international record of the last half century 
shows clearly that the skills of the labor force directly drive the 
rate of growth of economies. And, on this score, the United States is 
not well-positioned. Our schools are producing mediocre outcomes by 
international standards, and this dramatically constrains our future.
    If our schools could raise the performance of our students to the 
level of Germany or Australia, history suggests that our economy would 
grow faster--producing an addition to GDP of some $44 trillion in 
present value terms. If we could equal the results of Canadian schools, 
it would be worth $75-$80 trillion. (For comparison, the loss from the 
current recession is estimated at around $3 trillion). Such 
improvements of our schools would more than solve our fiscal problems 
and would dramatically change the economic well-being of our children.
    The problems of performance are the result neither of a few poorly 
performing States nor of a difficult to educate population. The most 
advantaged students from the best State still do not compete well with 
average students from a number of other nations.
    The issue is quality of skills and will not be solved by extending 
the time of students in school unless they are learning a lot during 
that time. That is the challenge and, if ignored, places our national 
future on a very much lower path.
                                 ______
                                 
    By world standards, our current education system is mediocre--not 
the worst but by far not the best. We should not allow this to 
continue. By choosing different education policies, we can 
substantially improve the lives of our children and the future place of 
our Nation in the world economy.
    The potential difference for our children's future is not trivial, 
but profound. On our current path, we continue with our middling 
schools and moderate real income growth, which in turn yield increasing 
struggles and discord over the income distribution and how to spend our 
limited public budgets. But we could choose a different path, one with 
better-educated children, international economic leadership, and a 
faster growing economy. With this, we solve our fiscal and 
distributional problems not with battles over the balance of revenues 
and spending but by ensuring that the pie grows.
    Which path we are on is determined by the skills of American 
society, and the skills are determined by the quality of our schools.
    Let me fill in these paths, because in my opinion there is no more 
serious challenge facing our country. Nearly all of today's policy 
debates focus narrowly on pulling out of the current downturn in the 
economy. But, frankly, the importance of dealing with this--and I 
realize its importance to many families today--is simply dwarfed by the 
long run growth of the economy. This focus on today may serve short-
term political interests during this election year, but it neglects our 
children and their future.
    The most important determinant of the future well-being of the U.S. 
economy is the rate of economic growth. It is economic growth that has 
put us in our current position of leadership. And it is economic growth 
that will determine the fate of the next generations.
    The most important driver of economic growth is the skill of the 
labor force, what economists call human capital. This fact comes 
through clearly when we look at differences over the past half century 
in long run growth rates for countries around the world. Countries that 
have developed more skills in their population systematically have 
grown faster.
    This can be seen from comparing growth to skills across countries 
(Figure 1). If we array growth rates in GDP per capita from 1960-2000 
against international assessments of math achievement, we see that 
countries fall almost on a straight line. (The only other factor 
considered here is the starting point of each country, GDP per capita 
in 1960).
    This figure lays out our choices. Current U.S. students--the future 
labor force--are not competitive with students across the developed 
countries of the world. If we continue at this level of performance, we 
are surely on the low-growth future path--the complacent continuation 
of current policy that leaves us with a variety of increasingly 
difficult policy dilemmas.
    The different options (and results) can be laid out in a 
straightforward way. To see the implications of skills for the economy, 
let us assume that the future looks like the historical pattern. We can 
then project growth into the future under two alternatives: (1) our 
current level of achievement, and (2) what would be expected with 
improvement of our schools.
    Consider a school improvement program that brought us up to the 
level of Germany or Australia in math performance (approximately 25 
points on the PISA tests) over the next 20 years. By historic outcomes, 
when these higher skilled students enter the labor force, they will 
produce an economy that grows faster. The results are stunning. If we 
discount the future at 3 percent per year to recognize that future 
gains are not as valuable as current gains, the improvement over the 
lifetime of somebody born today would have a present value of $44 
trillion. Numbers like this have little meaning to most people, but we 
can think of some direct comparisons. Today's economy has a total GDP 
of less than $16 trillion. The cost of the 2008 recession to date is 
perhaps $3 trillion. The projected fiscal deficits that have caused 
such policy anguish are far below what we are losing by not undertaking 
such an improvement in our schools.
    Here's a comparison even closer to home. What would we project for 
the economy of bringing skills up to the level of Canada? A present 
value of $75-$80 trillion.
    The potential differences in the future of the United States 
economy are dramatic. These gains are equivalent to a level of GDP that 
on average is 6-10 percent higher every year for the next 80 years. It 
does not take a new CBO projection to realize that this eliminates the 
currently projected fiscal imbalances and leaves plenty to spare.
    While the gains from growth don't accrue for some time into the 
future--until the kids are out of school and in the labor force--
neither do the fiscal problems facing the Nation. The pattern of 
increasing Medicare costs match up quite nicely with the improvements 
to the economy from increased productivity growth.
    In the past we have had a dominant position in world growth despite 
the shortcomings of our schools by having other advantages: free 
movement of labor and capital, strong property rights, a limited 
government intrusion; an historic superiority in the level of school 
attainment; strong colleges and universities; and an ability to adopt 
skills produced elsewhere through immigration policies that allow 
skilled workers to enter. But, without belaboring it, each of these 
advantages has eroded considerably and probably should not be counted 
on in the future to carry our economy.
    It is also true that this is not a problem of a few States doing 
badly. If we compare the performance of individual States to nations 
around the world (Figure 2), we see that students in our best State 
(Massachusetts) in 2006 were not competitive with the average student 
in some 16 countries. My own State of California is competing with 
Portugal and Greece.
    Nor is it just a problem of having a particularly difficult-to-
educate population. The children of college-educated parents in 
Massachusetts would still trail the average student in seven countries.
    My message is simple. The gains from improving our schools--or the 
costs of not doing so--are enormous. They are large enough that we 
should be willing to consider major alterations in policies. We know 
that changing things around the margin--like moving to even smaller 
class sizes or adding some more master's degrees for our teachers or 
introducing the common core curriculum--have little hope of redressing 
the problems.
    It is important to stress that it is not just years in school, but 
what people know that counts. In terms of the differences in growth 
across countries, it is performance on international assessments that 
indicates the skill levels. It is not the years of schooling per se. If 
students spend more years in school but do not learn much, the gains 
are nil. The implication of this for our policies is that just trying 
to keep students in school--to graduate from high school or to 
college--works only if the students are learning something. And, if 
they come up to the last years of high school with poor basic skills 
from earlier schooling, they probably do not learn a lot at the end.
    There are different views about the most effective policies for 
increasing skills. I am happy to provide my thoughts. As many of you 
might know, I believe that it is essential that we improve the quality 
of our teachers, although there are different ways to get to better 
teachers.
    I will stop here by underscoring the basic issue. We need to 
improve the skills of our population if we hope to continue as the 
world's economic model. We have the resources to prepare our children 
for an outstanding future. It is only the will on our part to help them 
that can hold them back.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Appendix A. Hanushek, Eric A., Dean T. Jamison, Eliot A. Jamison, 
and Ludger Woessmann. 2008. ``Education and economic growth: It's not 
just going to school but learning that matters.'' Education Next 8, no. 
2 (Spring): 62-70 may be found at http://educationnext.org/education-
and-economic-growth/.
    Appendix B. Peterson, Paul E., Ludger Woessmann, Eric A. Hanushek, 
and Carlos X. Lastra-Anadon. 2011. ``Are U.S. students ready to 
compete? The latest on each State's international standing.'' Education 
Next 11, no. 4 (Fall): 51-9 may be found at http://educationnext.org/
are-u-s-students-ready-to-compete/.

    The Chairman. Dr. Hanushek, thank you very, very much. 
That's very provocative--I mean, in a good sense. It provokes 
thinking.
    Mr. Murnane.

  STATEMENT OF RICHARD MURNANE, Ph.D., JULIANA W. AND WILLIAM 
   FOSS THOMPSON PROFESSOR OF EDUCATION AND SOCIETY, HARVARD 
     UNIVERSITY GRADUATE SCHOOL OF EDUCATION, CAMBRIDGE, MA

    Mr. Murnane. Thank you for the opportunity to participate 
in this panel today. I submitted our testimony on three topics: 
changing skill requirements in the labor force; second, 
disturbing trends in the distribution of skills; and, third, 
some ideas for improving American education.
    I'll say a few words about the first two of these topics, 
highlighting some themes, although Senator Harkin and Senator 
Enzi have made this more difficult for me, because in your very 
nice opening statements, you said a lot of the points that I 
had hoped to make, and you did so very well, of course.
    Technological change and globalization have quite 
dramatically altered the skills required in the labor force. In 
particular, they have reduced the number of jobs that might be 
characterized as doing routine cognitive work--filing is a good 
example--or routine manual work, assembly line work. Why is 
that? Because those are the jobs that are easiest to 
computerize or to send offshore. What has increased are jobs 
that require what MIT economist Frank Levy and I call expert 
thinking and complex communication.
    Since a great many Americans learn a lot of those 
foundational skills that are needed to be good at expert 
thinking in the domain in which they work and complex 
communication, it's not surprising that the economic return to 
educational attainments have increased in recent decades, 
increased dramatically during the 1980s, and have continued to 
stay very high. So one obvious point that stems from that is 
that it's important that all American young people have the 
preparation to succeed in post-secondary education and the 
financial opportunity to undertake and succeed in post-
secondary education.
    However, I don't think it's right to say we ought to aspire 
to all Americans having 4-year college degrees. I mean, there 
are a great many jobs that are important in the economy that 
require less than a 4-year bachelor's degree.
    But, all those jobs, whether they require some post-
secondary education or training initially or people could start 
with them right after high school, will require over the course 
of a work lifetime some post-secondary education and training. 
And that's the reason why I think it is important that all 
students leave high school career- or college-ready, because 
they may not initially need subsequent education and training, 
but they will over their work lives, for sure, in order to 
remain productive and to earn a middle-class living, given the 
pace of technological change.
    The third point connected to skill requirements is that the 
challenge of preparing all young people to be college- and 
career-ready is a new challenge. And the Nation's education 
institutions need to learn how to meet that challenge. It's not 
simply a question of doing the same things for longer hours. 
The problem is that the educational system that was 
sufficiently good for the economy of the 1960s, where there 
were large numbers of jobs with people doing the same thing 
over and over again, is not good enough for the economy of the 
21st Century.
    On the second topic--how are we doing in terms of providing 
these skills and educational attainments? And here, as Eric 
Hanushek has said, not nearly as well as we need to. And 
particularly disturbing are the growing gaps in skills and 
educational attainments between young people from relatively 
affluent families and those from relatively low-income 
families. That gap in mathematics and English language arts 
skills has grown by a third over the last 30 years.
    That's really a very disturbing pattern because, clearly, 
those skills are very important in predicting success in post-
secondary education. And, of course, that's why we see the 
pattern that Senator Harkin described, where the percentage of 
folks from top quartile income families who graduated from 
college increased by 21 percent, while the percentage of 
students from bottom quartile income families who graduated 
from college has only increased 4 percent, from 5 to 9 percent.
    A stagnation of educational attainments, particularly of 
young people from relatively modest income families, from 
working-class families, is a pattern that really threatens the 
Nation's prosperity. It also threatens in a profound way a 
value that Americans of all political persuasions hold dear, 
and that's the idea that while a child may grow up poor, he has 
every reason to believe that if he or she works hard, his 
children will not grow up poor. And the path of this upward 
mobility for many generations of Americans was getting more 
education than their parents had. And that's a pattern that is 
seriously threatened today.
    In fact, I'll close with this statement. For the first 
time, the average educational attainment of individuals who are 
retiring, leaving the workforce, is higher than the average 
educational attainment of young people entering the workforce 
for the first time.
    Thank you.
    [The prepared statement of Mr. Murnane follows:]
            Prepared Statement of Richard J. Murnane, Ph.D.
                                summary
                     i. changing skill requirements
    1. Over the last three decades, technological change and 
globalization have reshaped the occupational structure of the American 
workforce. Increasingly, work that consists primarily of carrying out 
routine cognitive tasks, such as filing, and routine manual tasks such 
as assembly line work, are either carried out by computer-guided 
machines or sent off-shore to lower wage countries. During this same 
period, work involving expert thinking in a particular domain and 
complex communication has grown in importance, primarily because these 
are tasks that computers cannot do well.
    2. Since Americans learn a great many of the skills needed to excel 
at expert thinking and complex communication in formal educational 
institutions, it is no surprise that the labor market payoffs to 
educational attainments increased markedly during the 1980s and have 
stayed very high. Not all American youth want to pursue 4-year college 
degrees. Many want to enroll in 2-year vocationally oriented education 
and training programs. Some want to enter the military or the private 
workforce right after high school graduation. However, given the pace 
of technological change, almost all Americans will need to succeed in 
education or training programs over the course of their work lives in 
order to remain productive and to earn a middle-class living. For that 
reason it is important that youth leave high school with the tools to 
continue to learn effectively. One oft-used term is that youth should 
leave high school, college- and career-ready.
    3. Providing all American children with the high quality education 
they need to leave high school college- and career-ready is a new 
challenge for U.S. educational institutions, one that they will be able 
to meet only with new ways of organizing teaching and learning.
 ii. disturbing trends in the distribution of educational attainments 
                               and skills
    1. The gaps between the average reading skills and mathematical 
skills of children from relatively affluent families and those from 
relatively low-income families have increased by one-third over the 
last three decades. Gaps in college graduation rates between youth from 
top-quartile income families and those from bottom-quartile income 
families have also increased markedly.
    2. The increase in family-income inequality in recent decades has 
contributed to the increase in income-related gaps in educational 
outcomes through two sets of mechanisms: growing differences in 
parental resources devoted to children and growing differences in the 
quality of the schools children attended.
    3. The increasing gap between the cognitive skills and educational 
attainments of children from families in the bottom quarter of the 
income distribution and those in the top quarter threatens 
intergenerational upward socio-economic mobility and the Nation's 
prosperity.
                 iii. improving american k-12 education
    1. Schools that are effective in educating disadvantaged children 
well do much more than provide good instruction during a normal 9 a.m. 
to 3 p.m. school day.
    2. Accountability and capacity building are essential complements, 
not substitutes.
    3. The use of value-added models will improve education only if 
systematic attention is devoted to figuring out why children in some 
classrooms learn more than children in other classrooms.
                                 ______
                                 
    I thank the members of the U.S. Senate HELP Committee for the 
opportunity to submit testimony. My testimony consists of three parts, 
the first dealing with changes in the demand for skills in the U.S. 
workforce, the second dealing with recent disturbing trends in the 
distribution of educational attainments and skills among young 
Americans, and the third dealing with strategies to provide more 
Americans with the skills to be college- and career-ready. I make three 
points in each of the three parts to the testimony.
                     i. changing skill requirements
    1. Over the last three decades, technological change and 
globalization have reshaped the occupational structure of the American 
workforce. Increasingly, work that consists primarily of carrying out 
routine cognitive tasks, such as filing, and routine manual tasks such 
as assembly line work, are either carried out by computer-guided 
machines or sent off-shore to lower wage countries. During this same 
period, work involving expert thinking in a particular domain and 
complex communication has grown in importance, primarily because these 
are tasks that computers cannot do well. Figure 1 illustrates how 
changes in the Nation's occupational structure over the last three 
decades of the 20th century altered the types of tasks that the U.S. 
workforce carried out.\1\
---------------------------------------------------------------------------
    \1\ The evidence on changing skill demands and Figure 1 come from 
Murnane and Levy (1996) and Levy and Murnane (2004).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Key elements of expert thinking include a deep understanding of 
causal relationships in the domain of work, skill at pattern 
recognition, initiative, and metacognition (the ability to monitor 
one's problem-solving strategies). Key elements of complex 
communication include skill at observing and listening, eliciting 
critical information, interpreting the information, and conveying the 
interpretation to others both orally and in writing. Expert thinking 
and complex communication are not new subjects to add to the curriculum 
of the Nation's schools. They can and should be fostered in the context 
of teaching the traditional core subjects. For example, high quality 
science instruction provides a forum for teaching both expert thinking 
and complex communication. Indeed, a necessary condition for increasing 
the number of students who leave high school prepared to thrive in 
Science, Technology, Engineer, and Mathematical (STEM) college majors 
is science instruction that consistently enhances students' expert 
thinking and complex communication skills.
    2. Since Americans learn a great many of the skills needed to excel 
at expert thinking and complex communication in formal educational 
institutions, it is no surprise that the labor market payoffs to 
educational attainments have increased in recent decades. This pattern 
is illustrated in Figure 2, which shows trends over the period 1979-
2009 in the average hourly earnings (adjusted for inflation) of male 
workers with different educational attainments.\2\ One lesson 
illustrated by Figure 2 is the importance of providing all American 
youth with the knowledge, skills, and financial opportunities needed to 
enroll in and graduate from post-secondary educational programs. I 
return to this lesson later in this document.
---------------------------------------------------------------------------
    \2\ Figure 2 is based on wage data from the Current Population 
Survey.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Not all American youth want to pursue 4-year college degrees. Many 
want to enroll in 2-year vocationally oriented education and training 
programs. Some want to enter the military. Some want to pursue 
traditional trades such as plumber and electrician and others want to 
enter new trades, many related to technology and health. These trades, 
some old and some new, provide many opportunities to do valuable work 
and to earn a good living. However, given the pace of technological 
change, almost all Americans will need to succeed in education or 
training programs over the course of their work lives in order to 
remain productive and to earn a 
middle-class living. For that reason it is important that youth leave 
high school with the tools to continue to learn effectively. One oft-
used term is that youth should leave high school, college- and career-
ready.
    3. Providing all American children with the high quality education 
they need to leave high school college- and career-ready is a new 
challenge. The Nation's educational institutions did not tackle this 
challenge in the past because the economy provided a great many jobs 
that consisted primarily of carrying out the same task over and over. 
Workers needed to be able to read, do simple arithmetic, and follow 
directions, but that was enough for millions of jobs paying a living 
wage. It is these jobs that are disappearing. In summary, our 
educational challenge today is that the education that was good enough 
to support the economy of the 1970s is not good enough to support the 
economy of today and tomorrow. The reason I emphasize that the 
challenge is new is that the Nation's educational institutions are 
struggling to learn how to meet this challenge. It is difficult and 
uncertain work.
 ii. disturbing trends in the distribution of educational attainments 
                               and skills
    1. Given the growing importance of cognitive skills and educational 
attainments to success in the labor market, it is important to keep 
track of the extent to which American children from different 
backgrounds are succeeding in school. Recent evidence shows disturbing 
trends. Sean Reardon (2011) has documented that the gaps between the 
average reading skills and mathematical skills of children from 
relatively affluent families and those from relatively low-income 
families have increased by one-third over the last three decades. The 
growth in the gap in mathematical skills is illustrated in Figure 3.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Given the importance of reading and mathematical skills for success 
in post-
secondary education and training programs, one might expect that the 
growth in the income-related gaps in these skills would translate into 
a growth in income-related gaps in college graduation rates. Indeed, 
this is the case, as Martha Bailey and Susan Dynarski (2011) have 
documented. Figure 4 illustrates this pattern. Between the late 1970s 
and the mid-1990s, the college graduation rate of American youth from 
families in the top quarter of the income distribution increased by 21 
percentage points, from 33 percent to 54 percent. During this period, 
the college graduation rate of American youth from families in the 
bottom quarter of the income distribution increased by only 4 
percentage points, from 5 percent to 9 percent.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    2. In recent decades, the gap between the incomes of families at 
the bottom of the distribution and those at the top has increased 
markedly. Figure 5 illustrates this pattern. Notice that the average 
real income (that is, adjusted for inflation) of families at the 20th 
percentile of the income distribution in 2009 was slightly lower than 
the average income for comparable families in 1979. In contrast, the 
average income of families at the 80th percentile of the income 
distribution was 30 percent higher in 2009 than the average income for 
comparable families in 1979. The growth in real income for families at 
the 95th percentile of the distribution was even greater--more than 40 
percent.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The increase in family-income inequality has contributed to the 
increase in 
income-related gaps in educational outcomes through two sets of 
mechanisms: growing differences in parental resources devoted to 
children and growing differences in the quality of the schools children 
attended. These patterns are documented in the chapters of the 2011 
volume entitled Whither Opportunity? Growing Inequality, Schools, and 
Children's Life Chances, edited by Greg Duncan and Richard Murnane.
    3. The increasing gap between the cognitive skills and educational 
attainments of children from families in the bottom quarter of the 
income distribution and those in the top quarter threatens a belief 
that Americans hold dear. This belief is that, while children may grow 
up in poverty, if they work hard, their children will not grow up poor. 
The mechanism through which this American dream has been realized for 
many generations of Americans has been access to a good education. 
During most of the 20th century, the majority of American children 
completed more education than their parents, and this provided them 
with access to better jobs and higher income. However, as Michael Hout 
and Alexander Janus (2011) have documented, this pattern no longer 
prevails. As illustrated in Figure 6, among men who turned 25 years of 
age after the mid-1980s, fewer than half completed more years of 
education than their fathers. Indeed, as the figure shows, more than 20 
percent of men who turned 25 after 1990 completed fewer years of 
education than their fathers did. This is a sharp deviation from the 
pattern in previous generations.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The slowdown in the rate of increase of educational attainments of 
young Americans, especially those coming from low-income families, 
places in jeopardy upward socio-economic mobility in the United States. 
Indeed, a disturbing pattern that relatively few Americans are aware of 
is that the rate of intergenerational upward mobility in the United 
States is lower today than it is in the United Kingdom, Sweden, and 
Finland. This pattern is illustrated in Figure 7.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 iii. improving american k-12 education
    As stated above, the country faces the enormous challenge of 
providing all American children with the skills needed to graduate from 
high school college- and career-ready. This means preparing them with 
the foundational skills they will need to excel at expert thinking and 
complex communication in their chosen field of work. How to meet this 
new challenge is a topic of considerable debate, especially whether 
schools serving high concentrations of children from low-income 
families can do the job alone. I make three points that I believe are 
critical to successful efforts to improve American K-12 education.
    1. Schools that are effective in educating disadvantaged children 
well do much more than provide good instruction during a normal 9 a.m. 
to 3 p.m. school day. They also monitor closely the progress of every 
child and provide extra instruction and learning opportunities late in 
the afternoon to remediate learning problems. Many of these schools 
also provide instruction and learning opportunities on Saturdays and 
during the summer months.\3\ Many also provide pre-school programs for 
3- and 4-year-olds to prepare children to enter kindergarten ready to 
learn.\4\ High schools that effectively serve disadvantaged students 
provide the learning opportunities in work places and in other non-
school settings and the cultural experiences and tutoring that affluent 
parents provide to their teenagers.\5\ In other words, schools that 
serve large numbers of disadvantaged children and youth well play a 
much larger role in their lives than a 5- to 6-hour schedule of classes 
for 180 school days.
---------------------------------------------------------------------------
    \3\ See Dobbie and Fryer, 2011.
    \4\ Weiland and Yoshikawa (2012).
    \5\ See Bloom and Unterman (2012).
---------------------------------------------------------------------------
    2. Accountability and capacity building are essential complements, 
not substitutes.\6\ Incentives and the accountability system in which 
they are embedded are important. However, incentives by themselves will 
result in improved performance only if teachers, administrators, and 
students know how to do the things that the incentives reward. This is 
not the situation in the Nation's schools today. Providing all 
students, including those from low-income families, with the skills to 
graduate from high school college- and career-ready is an unprecedented 
challenge for the Nation's schools. Incentives and accountability alone 
will not be sufficient for the Nation's educators to meet this 
challenge.
---------------------------------------------------------------------------
    \6\ See Murnane (2008).
---------------------------------------------------------------------------
    Investing in capacity building, including high quality academic 
standards, curricula aligned with the standards, and professional 
development aimed at improving the quality and consistency of 
instruction, is important. However, historically the Nation has devoted 
considerable resources to the development of curriculum and to 
professional development that have not improved the quality and 
consistency of the instruction children receive. Well-designed 
accountability systems hold promise to increase the effectiveness of 
investments in capacity-building. Of course, designing accountability 
systems that provide the right incentives is extremely difficult. 
Designing and implementing strategies to increase the instructional 
capacity of the Nation's schools is equally difficult. No government or 
private-sector organization designs effective accountability systems 
and capacity-building investments the first time. Consequently, States 
will need to redesign their educational accountability and capacity-
building systems in the years ahead, and Federal legislation should 
encourage them to do so. In planning these redesigns, it is important 
to learn from the early efforts and to recognize that accountability 
and capacity building are essential complements. Pursuing one without 
the other will not produce better education for the Nation's children.
    3. Increasingly, States and local school districts are using 
student test scores to evaluate teachers. Typically, they do so using 
statistical models called ``value-added'' models. Essentially, value-
added models provide estimates of the average amount of academic 
progress, as measured by test scores, that students in particular 
classes made during a school year. This is important information, 
especially when the evidence shows that in 2 or more successive years, 
students who spent the school year in the classroom of a particular 
teacher made relatively little academic progress. However, it is 
important to keep in mind that there are several explanations for this 
pattern. One is that the teacher lacks the skills to teach well. A 
second is that the teacher was absent from school for a substantial 
period due to illness.\7\ A third is that there were students with 
severe emotional problems in the class who would have disrupted the 
instruction of any teacher.\8\ A fourth is that there was a great deal 
of mobility among students in the class, with many new students 
entering the class during the school year.\9\ There is strong causal 
evidence that each of these situations reduces student learning.
---------------------------------------------------------------------------
    \7\ See Miller, Murnane, and Willett (2008).
    \8\ See Carrell and Hoekstra (2010).
    \9\ See Raudenbush, Jean, and Art (2011).
---------------------------------------------------------------------------
    That a group of students made little academic progress during a 
school year is a troubling problem. However, responding to this problem 
effectively requires an understanding of its cause. If the cause is 
poor teaching, then the response should focus on improving the 
teacher's effectiveness and, if that does not work, dismissing the 
teacher. However, this response will not improve children's education 
if the cause is one of the other possibilities. For that reason, it 
does not make sense to make decisions about which teachers to dismiss 
and which to reward with a salary bonus solely on the basis of the 
results of value-added models. Instead, it makes sense to use the 
results of these models to identify teachers whose students are making 
relatively great academic progress and those whose students are making 
relatively little progress. The next step is to use other methods, 
including classroom observation by well-trained coaches or supervisors, 
to figure out the cause of the atypical performance. Taking this step 
is critical to constructive use of the results of value-added studies.
                               summing up
    I conclude by reiterating the three central themes of my testimony. 
The first is that changes in the Nation's economy have dramatically 
altered the demand for skills in the Nation's workforce. These changes 
have resulted in unprecedented challenges for the Nation's educational 
institutions. The second theme is that the gaps between the academic 
skills and educational attainments of Americans growing up in high-
income families and those growing up in low-income families have 
increased substantially in recent decades. This growing inequality in 
educational outcomes threatens the Nation's prosperity and also places 
in jeopardy the upward socio-
economic mobility of which Americans are so proud. The third theme is 
that meeting the challenge of preparing all students to be college- and 
career-ready cannot be met by pushing teachers to work harder. To meet 
this challenge, American schools, especially those serving high 
concentrations of disadvantaged children, need to work differently and 
to play a larger role in children's lives than most play today. The 
policy challenge is to develop the knowledge, the capacity, and the 
accountability systems that will foster and support better schools for 
all American children.
                               References
Bailey, Martha J., and Susan M. Dynarski. 2011. Inequality in post-
    secondary education. In Whither opportunity: Growing inequality, 
    schools, and children's life chances., eds. Greg J. Duncan, Richard 
    J. Murnane. New York: Russell Sage Foundation.
Bloom, Howard S., and Rebecca Unterman. 2012. Sustained positive 
    effects on graduation rates produced by New York City's small 
    public high schools of choice. New York City: MDRC Policy Brief.
Carrell, Scott E., and Mark L. Hoekstra. 2010. Externalities in the 
    classroom: How children exposed to domestic violence affect 
    everyone's kids. American Economic Journal: Applied Economics 2, 
    (1) (January): 211-28.
Dobbie, Will, and Roland G. Fryer Jr. 2011. Are high quality schools 
    enough to close the achievement gap? evidence from a social 
    experiment in Harlem. American Economic Journal. Applied Economics: 
    158-87.
Duncan, Greg J., and Richard J. Murnane, eds. 2011. Whither 
    opportunity? rising inequality, schools, and children's life 
    chances. New York: Russell Sage Foundation and Spencer Foundation.
Hout, Michael, and Alexander Janus. 2011. Educational mobility in the 
    United States since the 1930s. In Whither opportunity? rising 
    inequality, schools, and children's life chances., eds. Greg J. 
    Duncan, Richard J. Murnane, 165-86. Russell Sage Foundation and the 
    Spencer Foundation.
Levy, Frank, and Richard J. Murnane. 2004. The new division of labor: 
    How computers are creating the next labor market. Princeton, NJ.: 
    Princeton University Press.
Miller, Raegan T., Richard J. Murnane, and John B. Willett. 2008. Do 
    teacher absences impact student achievement? longitudinal evidence 
    from one urban school district. Educational Evaluation & Policy 
    Analysis 30, (2) (06): 181-200.
Murnane, Richard J., and Frank Levy. 1996. Teaching the new basic 
    skills. New York: Free Press.
Raudenbush, Stephen W., Marshall Jean, and Emily Art. 2011. Year-by-
    year and cumulative impacts of attending a high-mobility elementary 
    school on children's mathematics achievement in Chicago, 1995-2005. 
    In Whither opportunity? rising inequality, schools, and children's 
    life chances., eds. Greg J. Duncan, Richard J. Murnane, 359-76. 
    Russell Sage Foundation and the Spencer Foundation.
Reardon, Sean F. 2011. The widening academic achievement gap between 
    the rich and the poor: New evidence and possible explanations. In 
    Whither opportunity? rising inequality, schools, and children's 
    life chances., eds. Greg J. Duncan, Richard J. Murnane, 91-116. 
    Russell Sage Foundation and the Spencer Foundation.
Weiland, Christine, and Hirokazu Yoshikawa. 2012. Impacts of a pre-
    Kindergarten program on Children's mathematics, language, literacy, 
    executive function, and emotional skills. Cambridge: Harvard 
    Graduate School of Education.

    The Chairman. Thank you very much, Dr. Murnane. All of 
these were very provocative statements. They get you thinking. 
Thank you very much.
    We'll begin a round of 5-minute questions here. Boy, I 
don't know where to start on some of this. I'll start with Mr. 
Kolb first of all.
    For years, I've been waving this book around. My staff is 
getting sick of me waving this book around. I show it to 
people, and I tell the story that I took over the 
Appropriations Committee on Education back around 1989, I guess 
it was. I think it was during the waning days of the Reagan 
administration that the President had asked for a study to be 
done on what we needed in education for the future.
    And as my memory serves me, and I think documents show that 
it asked this Committee on Economic Development to do this 
because the President wanted to hear from the business 
community what was needed in education. I've always added as a 
paraphrase he didn't want to hear from any of those pointy-
headed intellectuals in universities. He wanted to hear from 
the business community.
    The Committee on Economic Development set up a committee to 
look at education. I will never forget when in 1990, I believe, 
or 1991, Jim Renier, who was the president or CEO of Honeywell, 
a man I didn't know, was the head of this group and asked to 
see me, made an appointment, came in, and delivered this book 
to me. And they had finished, I think--you can correct me if 
I'm wrong, Mr. Kolb. I think it was like maybe 3 years they had 
worked on this, 3 or 4 years they had worked on this, at least, 
anyway.
    And if you look at the board, some of the most 
distinguished economic and business leaders in America were on 
this committee. The book is called The Unfinished Agenda: A New 
Vision for Child Development and Education. And, basically, 
what they came up with--and, again, I'll paraphrase a little 
bit here, they said that we must understand that education 
begins at birth, and the preparation for education begins 
before birth.
    This report was put out by distinguished business leaders 
of America--this is 1990. This is 22 years ago and the report 
said we've got to focus more on early childhood education. And 
they pointed out time and time again how kids, if they don't 
get good education early on, then it just costs so much that 
maybe you never make it up later on.
    My question, basically, for all of you is should we be 
focused more--and I know we're talking about higher education. 
We're talking about common core. There's other questions I have 
about that--common core standards and such. But are we missing 
the boat on not focusing more on getting kids early in life--
all these gaps, Dr. Murnane, that we're talking about, the gaps 
in achievement--does that start early on, when kids of low 
income--people have low expectations of them? And I just read a 
statistic the other day about how many low-income kids today 
come from homes where one of the parents is either in or has 
been in prison. It's alarmingly high.
    What kind of expectations do they have of them, and how do 
we make sure that we have good early learning programs? So I 
just kind of throw that out for your rumination. Just think 
about it, and if you have any thoughts on that, I'd be glad to 
entertain it from anyone here.
    Mr. Kolb, since I referenced your work and your committee.
    Mr. Kolb. Mr. Chairman, thank you. And if you need 
additional copies of--if it's wearing out for you or your 
staff, we'll be pleased to----
    The Chairman. You know, I actually had to go to the library 
to get one, because I did run out.
    Mr. Kolb. We'll get a copy for you, your staff, and all the 
members of the committee, as well as the----
    The Chairman. Do you think it's as relevant today as it was 
22 years ago?
    Mr. Kolb. Probably more, and the reason I say that, 
Senator, is that in your opening remarks, you used the phrase, 
``investment in the next generation.'' And we spend a lot of 
money on education in this country. But a lot of times, I don't 
think we approach it the way a business person would, namely, 
as an investment with a certain end contemplated.
    If you look at how we treat our young people, how we invest 
in early education, again, we're near the bottom of OECD 
countries. You look at a country like France, which spends a 
lot less than we do, both in the aggregate and per capita, and 
yet they have one of the best early education systems in the 
world with their Creche system and their Ecole Maternelle 
system. We actually talk about that in a sequel to The 
Unfinished Agenda that we did 10 years ago.
    What we've tried to do at the Committee for Economic 
Development is to build on what Jim Renier did. I actually met 
Jim Renier when I was in government working in the White House. 
And then I went to United Way of America as general counsel, 
and Jim was on the board at United Way of America. And then I 
come to CED, and he's on the board at CED, and I said, ``Jim, 
one of us is a bad penny. We can't get rid of each other.''
    He is an example of a business leader, a business 
statesman, who gets it. And he became turned on to the 
importance of investing in early education through his work at 
CED. And he went back to Honeywell, and he created a program 
called Success by Six, which he then took to United Way. I 
didn't realize that he actually started this at CED until I 
came to CED. I'd heard a lot about it at United Way of America.
    But then it went on to become a program in over 350 cities 
around the country. And it was designed to get young people to 
school, ready to learn--exactly that goal that we had under 
Presidents H.W. Bush and Clinton that, of course, we missed and 
still continue to miss.
    So it's a very important goal, and any business leader will 
tell you if you've got a problem, whether it's in manufacturing 
or the service, you don't fix it at the end. You fix it up 
front. You don't keep looking to fix it recall after recall. 
You fix it up front. So I think, as a country, we need to do 
more in terms of how we invest in our young people, both 
nationally, federally, at the State level, and also to add a 
little bit more rigor to the entire enterprise, and that does 
include K-12.
    Thank you.
    The Chairman. Dr. Hanushek.
    Can I finish here? Thank you.
    Doctor.
    Mr. Hanushek. If I could just make a few quick comments, I 
think it's extraordinarily important to improve our early 
childhood education. I think at the same time it's worth 
recognizing that we already do invest a lot in early childhood 
education. It just hasn't yielded the results that we might 
want, that a large portion of our disadvantaged youth have some 
sort of preschool education. It's just not serving very well.
    But it particularly doesn't serve them well when they go on 
into K to 12, because those that get ahead at the beginning 
lose it on bad K to 12 education, where we're still spending 
$600 billion. So, yes, early childhood education is important, 
but that's not going to solve our K to 12 problems.
    The Chairman. When I get another round, I'll challenge you 
on that, because if they're not coming equipped to learn by 
kindergarten, then they're behind.
    Dr. Murnane.
    Mr. Murnane. Could I just add something to that? I mean, 
you know, I think you need to think of early childhood 
education as a vitamin, not a vaccination. So you need the 
vitamin. You need kids to have a strong start. But it's really 
not enough. And one way to think about the difficulty of 
getting incentives and capacity building right is if you're a 
third grade teacher, and you're worried about the scores of 
disadvantaged students on third grade tests, what you focus 
your instructional time on in literacy is phonics.
    Now, phonics are important, and they will get you a long 
way toward improving scores on third grade tests. But they 
won't help when the nature of reading changes from learning to 
read to reading to learn, and you're expected to make sense of 
science and social studies texts in upper elementary grades and 
middle school grades. So what you really need to do--yes, do 
some phonics--critically important, but you need to work on 
vocabulary conceptual understanding right from kindergarten up.
    So that's a challenge, but for a second and third grade 
teacher, it doesn't pay off in test scores then. But it pays 
off in test scores in sixth and eighth grades. So that's the 
challenge in getting the incentive right so the whole school is 
aligned in preparing kids for these more complex literacy 
challenges as subjects change.
    The Chairman. Excuse me. Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman. I'll jump into that, 
too, because I recently got a report that Australia did on 
their early childhood schools, and it was a very devastating 
report. It said that they were doing terrible. They were not 
focused. It had no tie-in with the later education. And the 
only high point in it for them was that they were doing far 
better than the United States.
    [Laughter.]
    Ms. Mann, I was really excited to see that somebody from 
SAS was going to be testifying. I used to be in the shoe 
business, and SAS was San Antonio Shoes--probably no 
relationship at all. But I appreciate your comments about 
helping to get kids algebra-ready, the tremendous increase in 
performance that that caused, and that you're sharing software 
with the schools for free.
    I think one of the things we're failing to do in America is 
that we don't get people focused on a job. We're getting them 
focused on a free education and tests and going to school, but 
we're not getting them focused on a job. So do you think that 
that software and the algebra that you're doing gives them that 
kind of a focus? I mean, they're taking a look at coming to 
work for your company, I assume. Is that correct?
    Ms. Mann. Thank you. The Algebra Readiness Initiative that 
you pointed out, I think, is a great example of looking at 
trends early on in a child's education and seeing where things 
maybe are falling short and being able to influence that at 
that point in time to get kids who may be at risk on a better 
path to success. And through the use of our technology, we've 
been able to look at trends in childhood education that we can 
use the same principles that we use for our customers in 
business--we can use that to the education system, which I 
think has been very helpful, and the Algebra Readiness 
Initiative is a great example of success in that area.
    The other example that you pointed out--certainly, bringing 
kids very early on to SAS to look at how science and math is 
maybe being studied in the classroom and how you can apply that 
to real world examples--it sparks their interest. You see their 
eyes light up. It puts it into a whole new context. The other 
benefit is they get to see a corporate environment. They get to 
see what job potentials look like, what the environment can be 
if you do well in school. So there's really multiple things 
that we're achieving by engaging with education and students 
early on.
    Senator Enzi. Definitely on the right track. Hope we can 
get more companies to do that.
    Dr. Hanushek, I appreciated your comments about math being 
the main determinant. I'm a firm believer in that. In your 
testimony, you said that our education system needs a dramatic 
change if our country is to attain economic success, and I 
noticed you said that reducing class size and implementing the 
common core standards is just the beginning.
    Could you give some other examples of the kind of change we 
need to see if our education system is going to perform at the 
levels of the higher performing countries like Canada and 
Finland?
    Mr. Hanushek. The thing that I have focused on in my 
research and my understanding of schools is teacher quality and 
that that dominates almost everything in schools. Now, saying 
that teacher quality is important doesn't tell you exactly what 
to do about getting better teacher quality.
    To me, as an economist, the key is getting the incentives 
right for everybody in the system so that everybody is working 
in the right direction. Part of that is a controversial issue 
that we ought to evaluate our teachers on their effectiveness, 
and we ought to pay attention to those that are doing well and 
those that aren't in serious ways, so rewarding those who do 
well and dismissing those that are not up to standards.
    Senator Enzi. I appreciate that. I'll have some more 
detailed questions along that line. In fact, I have more 
questions for all of you. We never get the chance to ask them 
here, but they all become a part of the record if you'll be so 
courteous as to answer them when we submit them.
    Senator Enzi. Mr. Kolb, I appreciate your comments about 
the Western Governors University and the success with the 
Stanford course on artificial intelligence. I wasn't aware of 
that. I think that does show some of the hunger and thirst in 
other countries, and when I visit other countries, they're 
always commenting about how they hope their students can come 
to the United States to attend college. So I'm a little 
disturbed now to find out that other countries are doing better 
and building better universities than we are.
    But I think the Western Governors University and some of 
their online courses are a way for us to excel in a new way and 
touch people that haven't been able to go to school before. And 
maybe they'll do it with a lot less money than my alma mater, 
George Washington University, with their $50,000 tuition, which 
I never would have been able to afford. So I do have some more 
detailed questions on that, but I'm going to skip to Dr. 
Murnane in my remaining 4 seconds.
    I'll go just a little over as you did, Mr. Chairman.
    I appreciated your comments about the need for students to 
have expert thinking and complex communication skills. That's 
what most other countries think we teach in our country. For 
decades, the Federal programs have been targeted on high 
poverty students and the schools that serve them. And yet your 
testimony shows that the gap between low- and high-income 
students in math has increased dramatically since 1978.
    What conclusion should we draw from that data that Federal 
programs haven't been effective in meeting stated goals, that 
they haven't been targeted enough, or is it something else?
    Mr. Murnane. One thing is, I think, all parents do their 
best to take care of their children. Parents have observed that 
these returns to education have increased, so parents with 
resources have invested heavily in preparing their children to 
succeed. Tutors, summer learning opportunities--they've done a 
variety of things to help their kids prepare that the parents 
with low incomes cannot do.
    The other thing is, in terms of explaining this, is that 
we've seen increasing segregation by economic status, not race, 
by economic status in our schools. So low-income children are 
more likely to be in classrooms where other children are also 
from low incomes. And for a variety of reasons, that has 
negative effects on the learning. Among the reasons are they're 
more likely to be children who have emotional problems which 
disrupt instruction. It's harder to get skilled teachers to 
work in those schools. And, also, those students tend to have 
high mobility rates out of the school, which has been shown to 
have a negative effect on instruction.
    So I think those are tough things to compensate with just 
additional funds. It doesn't mean that funds don't matter. But 
it does mean that they need to be used in very creative ways. I 
think the Senate version of the new ESEA bill provides 
opportunities to use those funds more effectively.
    Senator Enzi. Thank you. I will have more questions for 
everybody.
    The Chairman. Senator--in order, Senator Bingaman.
    Senator Enzi. I don't know if he's coming back or not.
    The Chairman. Senator Bingaman, Senator Franken, Senator 
Whitehouse.

                     Statement of Senator Bingaman

    Senator Bingaman. Thank you very much. Thank you all for 
your testimony.
    Let me raise an issue. We've talked about how more early 
childhood education is important and how better teachers are 
important. And it's always seemed to me that--my experience in 
going through school was that the more time you spent studying, 
the more you were likely to learn. We do not provide enough 
time, instructional time, in our schools for kids to be 
expected to learn what we think we'd like them to learn 
anymore. We provide a lot less instructional classroom time 
than most of these countries we're comparing ourselves 
unfavorably with.
    And I know this is a difficult issue to address, because, 
of course, it costs money. You've got to pay teachers more if 
you're going to make them teach additional weeks and additional 
months. It disrupts other things that we've built around the 
180-day school year. But when we talk about how we need to make 
some major changes in the way we approach education, it seems 
to me one of the major changes we have to make is to recognize 
that, as a nation, we've got to move from a 180-day school year 
to maybe a 200-day school year, or maybe you just figure out 
how much instructional time there is and substantially increase 
that.
    But one way or another, we've got to give kids more 
opportunity to actually learn. And I think that also deals with 
this gap that Dr. Murnane was talking about between kids whose 
parents can get them tutoring in the afternoons and get them in 
special programs in the summers and all that kind of stuff, and 
the kids who don't have those opportunities. If everybody had a 
greater opportunity to learn and more hours of instruction, 
then that gap would close to some extent--at least, it seems to 
me.
    Dr. Murnane, is this totally wrong, or do you think there's 
an element of truth in it, or what's your thinking?
    Mr. Murnane. I think more instructional time is a necessary 
but not sufficient condition. And I think the evidence for this 
comes from particularly charter schools that have been 
effective in serving high concentrations of poor kids. They do 
have a longer school day. They often start at 7:30 with 
breakfast and they end at 5:30. They often have Saturday 
school. They have a longer school year.
    But, importantly, they have found ways to track the 
assessment of every child very frequently and figure out where 
children are lacking and then have used this longer 
instructional time in a very strategic way to deal with those 
deficiencies before they become a problem. I think a longer 
instructional period is necessary, but that alone won't do the 
job unless that time is used very effectively, and that really 
requires some learning how to do it, but it also requires 
strong incentives to use it effectively.
    Senator Bingaman. Mr. Kolb.
    Mr. Kolb. Senator, I'd like to comment, because you raise a 
very important point. I would use the phrase, time on task. 
Your question reminded me of a report that I read about 20 
years ago. I think it was produced by the National Governors 
Association. I'm going to paraphrase what's in my memory here. 
But it said that the typical fifth grader--and this was pre-
Internet, pre-computer--the typical fifth grader at home every 
day spent 130 minutes watching television and 5 minutes 
reading.
    Now, I would submit to you that whatever you think about 
educational spending--increase it, decrease it, keep it level--
if we can, as a country, figure out a way to flip those 
numbers, we would get better performance. It's a time on task. 
Our kids want to work smart, but not always work hard.
    I would just add one other issue. It hasn't come up here, 
but it's something I'm a firm believer in. We short-change our 
young people in another area of education, on international 
studies and foreign languages. Now, why do I mention that? 
Because if you want to learn a foreign language, you don't take 
a pill today and wake up speaking Farsi or Mandarin tomorrow. 
You have to learn, listen, and practice and listen and 
practice.
    Something like a foreign language, in my view, would 
actually change the habits of mind of a number of our young 
people and reinforce the notion that it's not only a Federal or 
State investment of money in your education. It's also 
important to invest your time both inside the classroom and 
outside the classroom.
    We talk about wanting our young people to be lifelong 
learners. I know--I was fortunate. I started learning French at 
the age of seven, OK, and it's stayed with me now for over a 
half a century. And it has affected virtually everything I've 
done in my personal life and my professional life.
    I know this is something which is often short-changed, but 
to go back to Chairman Harkin's opening comment, how we invest 
in our next generation is important. Investing in foreign 
languages and international studies will help reinforce that 
investment mentality which our young people need in addition to 
the school system and our parents. So I really appreciate you 
raising that point.
    Senator Bingaman. Thank you, Mr. Chairman.
    The Chairman. Do you want to followup on that? You've got 
more time.
    Senator Bingaman. I don't. I think any question you ask, 
I'm sure would be very insightful. So I think I'll defer to 
you, Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you for your confidence. Boy, I 
could be here all day. Thank you for your testimony. And I have 
some prepared questions about the cost of post-secondary 
education I want to talk to Mr. Kolb about. But I've got--
there's so much here.
    Mr. Hanushek, I can't agree with you more that if we want 
to grow our economy, we need to invest in our education. On the 
other hand, Mr. Kolb was talking about the French educational 
system and spending less and yet getting better results. And 
you were talking about early childhood education and how 
effective that is in France. Mr. Hanushek, you talked about how 
many of our low-income kids have preschool education.
    I will say that the evidence is that early childhood 
education is necessary but not sufficient, and we do lose some 
of the effect in K through 12 sometimes. But the evidence is 
that for high-quality early childhood education we get 
incredible benefits for every dollar invested. Art Rolnick from 
Minnesota has done that study, and we had him testify before 
this committee.
    There are a lot of kids who qualify for Head Start who 
don't get it, and we need to make sure that they get it. And I 
like the emphasis by this Administration on the Race to the Top 
grants for early childhood, and we have a Promise Neighborhood 
in the north side in Minnesota. We also have a Race to the Top 
Early Learning grant in Minnesota. I was so impressed, by the 
way, with the Promise Neighborhood proposal that the north side 
achievement zone put together, and it had everything that 
everybody always talks about, including parental involvement, 
including--and getting started, as The Unfinished Agenda says, 
before birth, preparing for birth, because learning starts at 
birth.
    On the one hand, I want to throw every resource we can at 
this. But we've got to do it smartly. For example, STEM is so 
important. I've been going around my State talking about STEM. 
The 20 biggest growing industries in my State--16 of them 
require STEM skills. You look at the United States on these 
charts that Mr. Hanushek put together and it's disgraceful.
    I don't know where to begin, as you can tell. But I guess 
where I would begin is--we did a bill. We marked a bill up, 
which I think was a good bill, for reforming ESEA, for 
reauthorization of ESEA. One of the things that we talked about 
today was about tracking each kid, a tracking assessment of 
every child--one of the things we did in this bill was allow 
computer adaptive tests.
    I want to ask the panel to talk about how important it is--
how wrong-headed it was to have No Child Left Behind testing be 
this one test at the end of April, where you get the results at 
the end of June. The kids are gone. In Minnesota, the teachers 
and principals call them autopsies--how important it is to 
assess the kids throughout the school year and to measure the 
growth of every child and not have an arbitrary bar of 
proficiency. You should not only measure the percentage of kids 
who meet that proficiency because the teachers ignore the kids 
at the top and the kids at the bottom. Can anyone speak to 
that?
    Mr. Hanushek. I only have 9 seconds left, so you've got my 
time.
    Mr. Hanushek. I will speak quickly. I think that you're 
raising some very important issues. Let me say at the outset 
that No Child Left Behind, in my opinion, has some flaws, but 
it has dramatically changed the way we look at education. It 
has been an extraordinarily positive impact, and as flawed as 
it is, it has led to improvements in our schools.
    One of the improvements is that we can now trace students 
and find out who is actually learning and who isn't, and we can 
relate that to the programs and the teachers that they have.
    Senator Franken. I'm sorry to interrupt. But can we, 
really? I mean, are we really doing that? Because what I hear 
from teachers and principals is that by the time they get the 
results, the kids are out of school, and that the teachers have 
no way of keeping track of the kids that they're actually 
teaching or using the test to inform their instruction.
    Mr. Hanushek. Senator, you're absolutely correct that we 
can think of testing in two different ways. One is in a 
formative way, where we assess students throughout the year, 
provide ready feedback, try to get better instruction to the 
individual kids. That's extraordinarily important, and we're 
starting to understand how to do that. We don't completely 
understand that.
    The second way of using testing is in an accountability 
sense, in a summative way, and I think that that is also 
important. That was what No Child Left Behind emphasized--it, 
as I say, made a number of mistakes, one of which is not 
following the learning of individual kids. A second one is not 
using adaptive testing and providing immediate answers so we 
can do all of that.
    But having that accountability system is extraordinarily 
important. And, in my opinion, if the Congress could find a way 
to reauthorize ESEA and improve some of the flaws but to 
continue that, it would be a very big help in part of the 
picture of how to improve our schools.
    Senator Franken. Dr. Murnane and Ms. Mann.
    Mr. Murnane. I would support Eric Hanushek in the 
extraordinary value of No Child Left Behind as a first step in 
having a set of accountability systems in 50 States that really 
does pay attention to the achievement of every child. But, 
again, this is new work, and we need to keep working on this.
    One kind of concrete example in the science area, Senator 
Franken--science instruction provides a fabulous forum to teach 
these expert thinking and complex communication skills. Hands-
on science, working in teams to develop hypotheses, figuring 
out how to test them--you collect data, you try and figure out 
what it means, and you try and interpret it and convey it to 
other people. But we still need to make progress on developing 
science assessments that provide the right incentives for 
science teachers to teach science in that way, as opposed to 
asking kids to memorize the parts of flowers, which doesn't 
make any sense when that information is available on the Web in 
4 or 5 seconds.
    So I think incentives are critically important, but we need 
to get them right so we attract the best folks into science 
teaching and they have the incentive to actually teach these 
skills that really will build most students' competence and 
interest in these STEM areas. And I think we've got a ways to 
go to accomplish that.
    Senator Franken. Amen. And I'm sorry, Mr. Chairman, but it 
seems like Mr. Kolb is bursting.
    Mr. Kolb. Maybe I shouldn't do----
    Senator Franken. In French, please.
    [Laughter.]
    Mr. Kolb. Here's my point. I'm a recovering lawyer, not a 
psychometrician. So I'm going to be agnostic on exactly how you 
do the testing. But let me tell you what really worries me 
about this. In December 2010, when that PISA study came out 
from the OECD where we're doing so badly, about a week after 
that--you probably saw this--the Education Trust here in 
Washington put out a report that said that almost 25 percent of 
the high school graduates--I wasn't sure I heard it right on 
the evening news, so I went back and had one of our research 
people check it. Almost 25 percent of the high school graduates 
who took the Army entrance exam flunked it, with tough 
questions like two plus X equals four, solve for X.
    How can that happen in America? We keep kicking the can 
down the road. How can somebody get all the way through high 
school, get a certificate, which presumably says they have a 
certain mastery of knowledge--and you can't do second or third 
grade math? So I don't personally care how you do the testing. 
I think we need more rigor along the way in our system coupled 
with the appropriate form of assessment.
    But we are failing our young people if we are certifying 
them--this, by the way, wouldn't happen in France. I asked a 
French friend of mine about the baccalaureate in France. I 
said, ``Is there anyone in the entire country of France who has 
passed the baccalaureate who couldn't answer the question two 
plus X equals four?'' And I got laughter as a response. Of 
course not. But it happens here.
    Senator Franken. Thank you. And I'm sorry to run over my 
time, Mr. Chairman. The answer, by the way, is two.
    [Laughter.]
    The Chairman. And here you've beat me. I have my computer 
working on it right now.
    [Laughter.]
    Senator Franken. You know you had your staff working on it.
    The Chairman. That's my computer.
    [Laughter.]
    I'd like to open it up for general discussion here, but I 
wanted to connect two people or two things, Dr. Murnane and Ms. 
Mann.
    Mr. Murnane, you said, ``don't need 4-year degree for all; 
there are many good jobs that don't require''--you had that in 
your written testimony. Also here, if I can find it again, 
where I read it here--you said in the past, workers needed to 
be able to read and do simple arithmetic, follow directions, 
and that was enough to get a living wage. But those jobs are 
disappearing, and they need more now to enter the middle class 
than just what we needed in the past.
    Ms. Mann, you talked about what your company had developed 
in productive partnerships with local high schools, where you 
made it clear how the skills they learn in the classroom 
translate into the workforce. I'd like to put these two 
together.
    I just visited a community college in Iowa on Monday, and I 
met a young man there, 37 years old. He just had a high school 
education. He was now being retrained in a 2-year program in 
computer-assisted cutting of metals and materials. He had to 
learn pretty intricate math to be able to program the computers 
to run the equipment.
    What I learned there was a lot of the local businesses had 
this equipment that cost a lot of money. But local businesses 
had partnered with the community college to buy the equipment 
to put it in there to train new workers. The community college 
needed that kind of modern equipment in order to give 
instructions.
    Back to you, Ms. Mann. If businesses in these different 
sectors, if they know the skills they need, how do we get more 
of them working with high schools? How do we get them talking 
to students and saying, ``There are good jobs out there if you 
do this, and we will assist you in the schools.''? Evidently, 
that's the kind of partnership you have with your high schools.
    I want to get these two ideas together because I think 
there's something there that maybe we're not looking at. And in 
the bill that we worked on, on the reauthorization of ESEA, we 
called it college- and career-ready, not necessarily college, 
but also maybe career-ready.
    So could you expand on that a little bit, about what you're 
doing in your partnerships with your schools?
    Ms. Mann. Sure. And I think there are a lot of 
organizations like SAS that do have education as their 
philanthropic focus as we do and are trying to partner with the 
schools in their community. I think we just need to expand it 
and work collaboratively to do that.
    But there are several initiatives. Over 10 years ago, SAS 
started working with a group called the High Five that was the 
five school districts in our area to partner with the educators 
and the business community to explore this topic, to look at 
what we could do together to improve the issues. The Algebra 
Readiness Project was part of that. Certainly, SAS played a 
large role in that because the assessment that was done--and 
this goes back to a comment which was made earlier about some 
of the assessments are, unfortunately, catching the trends too 
late, that the students are already failing.
    This particular solution looked at 30 years of educational 
research to try to predict what the issues were going to be so 
that we could step in and make progress before the issues 
became more prevalent. And so I think there's lots of things 
that organizations can do, partnering with education, and also 
looking at how the use of technology can help solve some of 
these very difficult challenges in education. We could do that 
a little bit better, I believe.
    The Chairman. Could you expand a little bit on that, Dr. 
Murnane?
    Mr. Murnane. Yes. I think if we look at where the really 
strong evidence is--high schools that are serving high 
concentrations of low-income children well--there are two very 
well-done evaluations using these randomized controls, which is 
kind of the gold standard. One is career academies that have 
been shown to, very interestingly, not to improve kids' test 
scores, but have led to improving how much they've earned 8 
years after high school by 11 percent, by 18 percent for males. 
And these are almost all low-income males of color.
    The followup work has shown that they did learn these 
cognitive skills--absolutely critical, as Rick Hanushek has 
said. But they also had these opportunities to have internships 
and jobs in middle class workplaces, where they learned a lot 
of the social skills and communication skills that were 
absolutely central to helping them to find jobs and to move 
from one job to another.
    The small schools of choice in New York City also have 
strong partnerships with employers who provide these kinds of 
opportunities that both help the kids to learn these other 
kinds of skills and also help them to see that the cognitive 
skills are actually worthwhile, because for a lot of very poor 
kids who don't know anybody who has that kind of a job, they 
seem totally unconnected to what they think as possible jobs. 
So I think these are promising opportunities.
    The Chairman. Any others? I just picked on these two, but 
Dr. Hanushek or Mr. Kolb, do you have any thought? Again, the 
thrust of my question is getting the business community and 
those that know what kind of jobs they need out there, 
interacting more with the high schools to let students know 
that there are other options for them.
    Mr. Kolb. Mr. Chairman, we were just in Milwaukee, WI, a 
couple of weeks ago doing a forum, actually, on post-secondary 
education. We did this at the headquarters of Manpower, which, 
as you know, is a global company. But what we heard were the 
examples like Ms. Mann talked about, more in the post-secondary 
area than in the high school. But I think it's the same 
principle.
    You had companies like Johnson Controls, and I think there 
was an investment firm, Baird, which actually had partnered 
with 2-year and 4-year institutions to shape the curriculum 
that these companies actually needed to make sure that the 
education institutions provided the wherewithal for the 
students. And, of course, guess what? There were jobs at the 
end. I mean, the companies weren't doing this just because it 
was a charitable endeavor. It was a real win-win situation for 
everyone.
    I think what we hope to do at CED is to look for other 
examples around the country and get those best practices out. 
But they are happening, and I think they can also happen at the 
K-12 level as well, because not everyone is going on to 4-year. 
Some may go on to 2-year or proprietary schools.
    The Chairman. Dr. Hanushek.
    Mr. Hanushek. Just one quick thought. I wanted to 
reemphasize what Dr. Murnane said, and that is providing 
incentives and motivation for students is extraordinarily 
important. We know that. Most of our public policy doesn't 
address that, because we don't know quite how to intervene with 
students and with families to get them more motivated. But 
anything we can do along the lines that he suggested is 
extraordinarily important, because the key element of all 
learning is the student, him or herself.
    The Chairman. Thank you all very much.
    Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman.
    Mr. Kolb, I didn't get to ask you a question before, and I 
know that your members have an interest in education, and they 
need an educated and skilled workforce. What knowledge and 
skills gaps are your members currently experiencing? Or are 
they able to find the talent that they need?
    Mr. Kolb. If you were to talk with Jeff Joerres, the global 
CEO of Manpower Group or with Carl Camden from Kelly Services--
and, by the way, a lot of people think of these firms as 
providing entry-level skill temporary jobs. People don't 
realize that both of these companies are global. But a lot of 
their business is placing people with Ph.D.s. So they see 
what's happening in this country and around the world.
    I think both of those CEOs would tell you they have jobs 
that can't be filled. Some of them are because of STEM. A good 
number of them are STEM-related, and some of these jobs are 
paying in six figures. They're not just entry level temp 
positions.
    I think the answer to the question, Senator Enzi, is going 
to vary around the country. But if you were just to focus--
putting this question to Jeff Joerres and Carl Camden at 
Manpower and Kelly Services, I think, would actually provide 
more detail. I'll be glad to do that and go back to both of 
those CEOs and get some additional detail. But in talking with 
them as recently as 2 weeks ago, it's a problem.
    Senator Enzi. I'd appreciate that. Those two companies 
probably have as varied a workforce as there is anywhere in the 
world, and they're providing a lot of different jobs. So, yes, 
I'd appreciate it if you'd do that.
    Dr. Hanushek, what types of skills are needed to achieve 
the economic growth that you project? Simply saying that 
graduation rates and higher academic achievement is a bit 
simplistic. And aren't the higher skilled fields, such as 
computer science, engineering, mathematics--I know you've 
emphasized mathematics, and I appreciate that. Aren't they 
essential to our success?
    Mr. Hanushek. Senator, I think they are. What I've 
emphasized is not the particular jobs, but the kinds of skills 
that lead into the various jobs. There was some astounding 
statistic about how many jobs today didn't exist 10 years ago. 
And so to think that we're going to aim for particular jobs is 
a little bit difficult. But we know the skills that are 
important. They're the cognitive skills that--everybody has 
said in one way or another here that developing high levels of 
cognitive skills are extraordinarily important.
    Can the industries fill the jobs. I live in the middle of 
Silicon Valley and hear all of the firms there are both 
screaming about how they have jobs but they can't find the 
people, and, second, almost none of these firms would ever go 
to California schools or graduates of California schools to 
fill them. California schools are competing with Portugal and 
Greece internationally. They want to import people, which gets 
us into this other third-rail issue of immigration policy. But 
they're trying desperately to find people that are well-
trained, and they're going often overseas to get these people.
    Senator Enzi. And you emphasized teacher incentives, but 
I'm still trying to figure out some student incentives. I went 
to India and visited some of the people involved in education 
over there, wondering why they do so much better than we do. 
And I was kind of appalled at the things that I found out. The 
No. 1 thing they said was they didn't have any professional 
teams, so most of the students weren't trying to dribble a 
basketball or throw a football or something so they could get 
one of those multimillion dollar contracts.
    But the more disturbing thing was that they kick a bunch of 
kids out of school at fourth grade and again at sixth grade, 
and they only let 7 percent of the people go on to college, and 
that provides a competitive atmosphere that stimulates their 
kids. And, of course, we're not going to do that in the United 
States, where free education is--Dr. Murnane, did you----
    Mr. Murnane. Could I comment, Senator Enzi, on this 
question about skills, perhaps with a homely example. When you 
look for a staff, I'm sure you have applicants, all of whom do 
fabulously on cognitive tests. They all have 700 SATs. So the 
challenge is not to find those skills. So you clearly want 
that. You want people who have strong cognitive skills. But you 
want more than that, I presume. You want people who can get 
things done, who, when you ask them to do something that's 
unexpected, they'll say, ``Ah, here's a new challenge,'' who 
will find colleagues to work with and figure out a plan to get 
that done.
    I think all employers want this. They want the strong 
cognitive skills, but they want these other kinds of skills, a 
sense of liking new challenges, liking initiatives, recognizing 
they're going to need other folks to work with. So the question 
would be, thinking carefully, are we giving the right 
incentives to not only be sure that our instruction in schools 
teaches the kinds of things you can measure on the SAT, but 
also measures these other things that are critically important 
in our economy.
    Senator Enzi. You're absolutely right, and you mentioned 
that in your testimony along with good communication skills. 
That's another thing that we kind of check our staff out for 
and are pleased when we find that.
    Of course, at one of the most delightful hearings that I 
had--we had a lady testify--she was about four-foot-eight and 
African-American, and she had been made the principal of a high 
school in Tennessee. And they had multiple degrees there or 
certificates for graduation, and she did away with those, 
because she said every kid can learn.
    What she instituted were the academies that have been 
mentioned a couple of times before, and she had a health 
academy and a building academy and several others. Her big joy 
was to find that some kids that thought that they could be a 
carpenter found out they could be an architect. But everything 
was focused toward getting a job, as Ms. Mann was mentioning 
earlier--a specific area of work--and then they were able to 
increase their horizons from there.
    I think one of our big problems is getting the kids 
interested in education. Incidentally, she got promoted to 
superintendent because she did such a good job with the high 
school. And so her challenge was how to stimulate the kids in 
grade school. What she did was provide them with a list of 
prerequisites to get into the academy of their choice when they 
got to high school.
    All of the prerequisites were the same, but they were 
focused toward that particular industry. She also said that 
every kid in high school learned exactly the same thing. They 
just learned it from the focus of what they were doing.
    Again, I have used up my time, and I appreciate your 
answers. And I do have some much more specific things that I'll 
be asking if you'd answer that later.
    Thank you.
    The Chairman. Thank you, Senator Enzi.
    Senator Franken.
    Senator Franken. Thank you, Mr. Chairman. I just got from 
my staff a statistic on Head Start for our conversation 
earlier. Fifty percent of children eligible for Head Start are 
not served by current funding. I think that is something--if we 
really, really are listening to the conclusions from The 
Unfinished Agenda, I think everyone here would agree that 
that's kind of a travesty.
    I wanted to get into affordability of post-secondary 
education, but I want to follow on some of the things that both 
the Chairman and the Ranking Member were talking about.
    Mr. Murnane, you were talking about what skills an employer 
wants. I ask this every time I go around Minnesota and talk to 
employers, and they always want critical thinking, creativity, 
teamwork. Those are the three things I hear about the most. Of 
course, they need the cognitive abilities, and they need to 
read and do math and those kinds of things.
    I think that speaks to how we shape our tests, the 
assessments that we're doing on the kids. If you are 
emphasizing the knowledge of discreet little skills, which I 
think we're going to way too high a degree, you're doing two 
things. One, you're measuring kind of the wrong thing. I think 
the two consortia that design these tests are trying to work 
critical thinking into it.
    But when you do that, teachers then feel compelled to teach 
these discreet little skills, and that's really boring. And 
it's not just boring for the kids. It's boring for the 
teachers. So you're basically driving good teachers out of the 
profession in some cases. I think it's doing a disservice in 
terms of how we're educating our kids and what we are 
measuring.
    I also want to talk about this workforce--we need to 
reauthorize the Workforce Investment Act. We just need to do 
it. We had a hearing here with four workforce boards from 
across the country who had done extraordinarily great jobs, and 
we had this like a month ago or something. What it really 
required in each case was some leadership. It was pretty 
simple. There was nothing, necessarily, that we could do other 
than provide some structure and funding.
    But it was somebody from the workforce board or two or 
three people from the workforce board. It was people from 
industry, whether the industry was manufacturing--in many 
cases, it was--or whether it was healthcare, and it was the 2-
year colleges, the technical schools. And there's a technical 
school in Minnesota--Alexandria Community and Technical College 
ranked eighth in the country as a 2-year school--that does a 
wonderful job in Alexandria, MN, which is sort of the Silicon 
Valley of food packaging machines.
    But what they do is they reach down into the high school, 
and they have a camp, a summer camp, that teaches industrial 
arts, and they recruit from their high school. And I remember 
when Minnesota had like a 7.7 percent unemployment rate across 
the State, Douglas County had like 4.6 percent, and it was 
because of this. And the skills gap is there, and if we could 
close that gap, millions and millions of people could be 
working today, now.
    Mr. Kolb, I know that there's an upcoming report from the 
Committee for Economic Development that will look at ways to 
drive reforms across the post-secondary sector. Can you preview 
some of those reforms, and especially in relation to the 
ability of 2-year schools to provide the kind of skills and do 
them in the kind of ways--because Mr. Hanushek is right. Jobs 
are going to change. Jobs are just going to change. The nature 
of work is so different now than it used to be.
    And so you can't prepare someone for a job for 20 years 
from now except to give them the kind of cognitive skills and 
the creative thinking and the critical thinking. So can you 
highlight something from the upcoming report that speaks to 
this?
    Mr. Kolb. Sure. I'd be pleased to. First of all, Senator 
Franken, we're going to focus on what are called broad access 
institutions, not the elite research institutions. That's not 
where most Americans are going to go for post-secondary 
education. It's the State 4-year, 2-year community colleges and 
also the post-secondary sector.
    We think that the business community should be involved 
with State officials and that could involve workforce groups 
like we saw in New Orleans. I was in New Orleans on Monday and 
Tuesday. They have a similar group that is thinking along 
exactly these lines. But we want business to work with State 
officials to help set very explicit tangible goals for awarding 
post-secondary degrees and certificates. We've given a couple 
of examples of that this morning, but it needs to be magnified 
tremendously, and the more you do that, the more I think you'll 
have examples of those jobs being filled with people who have 
the necessary degrees.
    We think that business has a role in helping States in 
strategic financial resource allocation. How is the money being 
spent? Is the money being aligned with goals that relate to 
productivity efficiency? I actually think the business model of 
post-secondary education is going to be up-ended. And business 
leaders, more so than educators can deal with that type of 
change, and we've seen that in a number of areas. They're used 
to it. They've been through it themselves over the last 20 
years, so they can be an ally of the State institutions.
    Business can help set annual indicators and metrics and 
work in partnership with the State 2-year and 4-year 
institutions. They can conduct policy audits. We're going to 
recommend annual statewide education summits that would bring 
together business and the post-secondary institution to focus 
on goals.
    Let me just conclude with one other point. It hasn't come 
up this morning, but when I talk about post-secondary education 
and the importance of the workforce, it's also important to 
approach these issues from the perspective not just of work, 
but also democracy. If we are to have a vibrant democracy, we 
need educated citizens, because democracy is all about making 
choices.
    So a lot of people say, ``Oh, well, you're just about 
trying to produce more drones for the business sector.'' No. It 
is important that we have talented, qualified, certified people 
to get jobs. But it's not just about jobs. It's about the 
health and vitality of our democracy.
    Senator Franken. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Franken.
    Again, let me address something--Dr. Hanushek and Ms. Mann, 
I want to involve both of you in this. It's perhaps a little 
bit narrower, and it has something to do with what we have been 
discussing a lot in our committee and involved in our ESEA 
work.
    Ms. Mann, you expressed support for the Common Core State 
Standards initiative.
    Dr. Hanushek, you said in your testimony I read last night,

          ``My message is simple. The gains from improving our 
        schools--or the costs of not doing so--are enormous. 
        They are large enough that we should be willing to 
        consider major alterations in policies.'' I'm going to 
        set that aside. You say that, ``We know that changing 
        things around the margin--like moving to smaller class 
        sizes'' or master's degrees ``or introducing the common 
        core curriculum--have little hope of redressing the 
        problems.''

    I don't mean to have you two debate this, but I'm trying to 
figure out exactly what you meant by that, Dr. Hanushek.
    I want to know why you feel that the Common Core State 
Standards initiative is a pathway that we ought to pursue.
    Dr. Hanushek.
    Mr. Hanushek. I'm happy to start. It's not that I'm against 
standards. I am for standards. But when I look around the 
United States today, there are widely different standards, 
learning standards, across the 50 States----
    The Chairman. Right.
    Mr. Hanushek [continuing]. Some of which are by most 
ranking systems more advanced than the common core and many of 
which are not up to the level of the common core. If I simply 
correlate the standards, the rigor of the standards, with the 
performance of students, I get a negative correlation.
    The Chairman. Say that one more time for me so I can 
understand.
    Mr. Hanushek. There are rankings of the standards in the 50 
States today. If I take those rankings, which are often on an A 
through F basis by a couple of different rating agencies, and 
correlate those with NAEP performance on the test that relates 
to the standards that are being used, they are negatively 
correlated. The States with the highest standards, in fact, 
tend to have somewhat lower NAEP performance of their students 
than those with high.
    Now, that's not an argument necessarily against standards, 
per se, but it does say that there's a lot more to actually 
getting students to learn what is included in the standards and 
that is where I would put my emphasis. I view that the debates 
over common core, which seem to be heating up, as I see them, 
are a bit of a distraction to me, because whether we get them 
or not is not going to ensure that any student in any State 
actually learns them.
    The Chairman. It was my idea that the common core standards 
was not the top. It was sort of the common core--other States 
can go above that. But at least we've got a common core that no 
State goes below. That's sort of what, as I understand, what 
the common core movement was about.
    Mr. Hanushek. I think it is trying to establish a floor. 
There are some debates about whether States such as 
Massachusetts and California that emphasize eighth grade 
algebra, for example, can fit them in readily into the common 
core. These are details that are really inside baseball. I'm 
just suggesting that moving to those standards is not going to 
solve the problem that California, with its A-rated standards 
by most metrics, is performing at the level of Portugal and 
Greece.
    The Chairman. OK. I get that. I get that.
    Ms. Mann, you emphasized in your statement the usefulness, 
the necessity of common core standards.
    Ms. Mann. Yes, and I think the point there is that we 
support many of the initiatives that are being looked at right 
now, that are being delivered on right now. I don't know that I 
disagree with what Dr. Hanushek is saying. That is not going to 
be what changes the situation.
    But it's certainly a good starting place that we all have 
standards with which we will not allow our students to drop 
below. And that was just suggesting support for that 
initiative, not, again, to say that that was going to be the 
thing that was going to have the biggest influence. I think all 
the discussions that we've had today--it requires a combination 
of all those things--investment, the quality of our teachers, 
and the partnership with businesses and education are very 
critical as well.
    The Chairman. Dr. Murnane, did you want to comment?
    Mr. Hanushek. Could I just add one note to this----
    The Chairman. Sure.
    Mr. Hanushek [continuing]. And link it back to what Senator 
Franken said? One of the big advantages of the common core 
standards may be to drive the development of better 
assessments, which I think has been one of the problems since 
NCLB came out. I expected the assessments to get better as the 
tests were made available and people saw the scores and so on, 
and they, frankly, didn't. And so the common core may, in fact, 
drive better assessments, which has considerable value in our 
setting up the right incentives.
    The Chairman. Dr. Murnane, I know you----
    Mr. Murnane. That was half of what I wanted to say. The 
other half is--what I think can make a difference is--if you 
look at countries that do very well on these tests that Dr. 
Hanushek has described, they almost all have national standards 
and many have national curricula. Now, I understand that 
education is the obligation of States in the United States. Dr. 
Hanushek also spoke about the importance of having more 
effective teachers, and I completely concur. Well, how do we 
get there?
    One thing is pre-service education of teachers isn't very 
good. I think the reason is that in the United States, if you 
are a university professor trying to teach aspiring teachers 
how to do mathematics, you can't focus on ``This is what the 
mathematics is going to look like that you're going to be asked 
to teach,'' which is very different than a case in Singapore. 
You could say,

          ``Well, you may be asked to teach a very traditional 
        curriculum. You may be asked to teach a very 
        constructivist curriculum. So we can't specify this.''

    That is an enormous hindrance to preparing teachers.
    If we had greater clarity on what is important for children 
to learn and how we're going to measure these things, I think 
it would go a long way toward improving our education and 
professional development for teachers, if done very well. And 
that, of course, is the major proviso.
    The Chairman. Thank you.
    Senator Franken, we'll bounce back to you.
    Senator Franken. First of all, I would love to see this 
NAEP--the correspondence or the negative correlation, because I 
know Minnesota has pretty high standards and does very well, 
and I know Massachusetts has very high standards and does very 
well. I remember Tennessee was very high in the percentage of 
kids who met proficiency in math, but then on the NAEP test was 
right at the bottom.
    That hasn't been the experience that I've seen. But I'm 
sure--I'd just hope we could see that.
    Also, when you compare the--say California is comparable to 
the Portuguese and the Greeks, I would think the Greeks, 
especially in geometry, would be great.
    [Laughter.]
    But maybe I'm wrong.
    Mr. Hanushek. You may be surprised.
    [Laughter.]
    Senator Franken. OK. Let me just ask on postsecondary--
again, you were talking, Mr. Kolb, about involving business, 
and I can't agree more. I mean, this is one of the things that 
I see in Minnesota that was at Hennepin Technical College. 
Hennepin County is the county that Minneapolis is in, but it's 
the biggest county in Minnesota and involves a lot of suburban 
schools, too.
    Basically, what happened was the manufacturers just said, 
``This is what we need,'' and they designed a curriculum. And 
Hennepin Technical College did the curriculum, and it was 
called M-Powered. They've graduated about 300 students thus 
far, and 93 percent of them have permanent jobs.
    Ms. Mann, I just saw your hand go up. That sounds like you 
want to respond.
    Ms. Mann. I wanted to give an example that SAS has been 
involved with that I think has had a similar success. We worked 
with North Carolina State University to implement an Institute 
for Advanced Analytics. So it's a master's program focused on 
analytics. And we're in our maybe fourth year now, and the 
graduates from this program all have received job offers, and 
the average starting salary is over $80,000 a year. So this is 
another good example that we've seen by partnering with 
universities to help them build out the curriculum that we 
think is important.
    Senator Franken. Mr. Kolb, I want to ask you again about 
the Committee for Economic Development's report and what role 
business can play in working to address college costs, in terms 
of their business expertise, because a lot of businesses, you 
know, have to adapt all the time. As Congress examines these 
proposals and works to address college costs, from the business 
perspective, what are the most important items to hold colleges 
accountable for, and how can business help our colleges and 
universities and 2-year institutions?
    Mr. Kolb. Senator Franken, I think the short answer is to 
look at the same strategies around innovation, productivity, 
efficiency that are typical questions that the leaders of 
American business have had to deal with. And as I said earlier, 
they are not typically questions that show up on the campuses 
of 4-year schools and 2-year schools.
    The model that we've had, really, since the GI bill, has 
been good up until now. It's been pretty much investing in 
bricks and mortar. And most college and university presidents 
are chief development officers. If you look back when CED was 
founded, Robert Maynard Hutchins from the University of Chicago 
was one of our founding trustees. You'll think of people like 
Kingman Brewster or Derek Bach who played a real role in the 
intellectual life of the country. And that's typically not the 
case now.
    I think that business can help the leaders of our post-
secondary institutions rethink how they are going to spend 
their resources. One of the best models is Western Governors 
University, which is headed by a former senior executive from 
IBM. So what we hope to do with our report is to go around the 
country and identify the Jim Reniers of business, if you will, 
people who are going to get involved and help with exactly the 
type of relationship that Ms. Mann has talked about, that we've 
seen recently in New Orleans and also in Milwaukee. We know 
it's out there.
    But a lot of business leaders 6 years ago would tell me, 
``We don't see what the problem is. We sit on the board of our 
alma mater and things look fine.'' You can't say that now. The 
competition, the global challenges that we've heard about, are 
just too great. And so I think it's not going to be easy, but 
we need business leaders to get involved, and that's the niche 
of the Committee for Economic Development.
    I can't tell you where it's going to be in 5 years. I know 
it's going to be different. And, hopefully, we're going to 
identify the Jim Reniers of post-secondary education. We have a 
few already.
    Senator Franken. I want to thank all of you. I, 
unfortunately, have to go. I could stay here all day and talk 
to all of you. Thank you for your testimony. Thank you for all 
the work that you're doing.
    And thank you, Mr. Chairman, for this hearing.
    The Chairman. Thank you. I agree with you.
    We're going to have to break up, but I'm going to ask the 
last curve ball question. You're not going to like it. You can 
only change one thing. You get one opportunity. You're the 
dictator. You're the king. You can change one thing about our 
education system, only one thing. What would it be? You only 
get one shot at it.
    I'm going to start with Ms. Mann and just work down the 
aisle. Or should I call on you? Who wants to go first?
    OK. Dr. Murnane.
    Mr. Murnane. Improve assessments.
    The Chairman. Improve assessments.
    Mr. Murnane. So that the Nation's best teachers feel that 
if they do what they consider their very best teaching to 
prepare our children to succeed in life, that they will do well 
on those assessments.
    The Chairman. OK. We'll go down this way.
    Dr. Hanushek.
    Mr. Hanushek. Mine is simply to improve the evaluation of 
teachers and use those evaluations in making personnel 
decisions.
    The Chairman. OK. Fair enough.
    Mr. Kolb. I would recommend a national--not necessarily a 
Federal, but a national high stakes exam equivalent to the 
French baccalaureate.
    The Chairman. And that would be in high school?
    Mr. Kolb. Yes.
    The Chairman. A national high school exam.
    Mr. Kolb. At the end of high school, like the French 
baccalaureate, along those lines.
    The Chairman. OK.
    Mr. Kolb. Lest I get fired from CED, that's my view. It's 
not the official view of the Committee for Economic 
Development. We haven't focused on that. But it's my own 
thinking.
    The Chairman. OK. Got that.
    Ms. Mann.
    Ms. Mann. A stronger focus on computer science in education 
as well as improve the quality of the teachers and the 
incentives that they receive.
    The Chairman. So about three out of four was assessments, 
and I assume when you say improve assessments, you meant 
teacher assessments?
    Mr. Murnane. No.
    The Chairman. What did you mean on that?
    Mr. Murnane. Assessments of students, because unless the 
student assessments really do capture what our best teachers 
are trying to teach, then I think that's the Achilles' heel for 
the plan that Professor Hanushek is describing.
    The Chairman. OK. And that would start in elementary 
education.
    Mr. Murnane. And go all the way up.
    The Chairman. All the way up.
    Mr. Murnane. Including post-secondary.
    The Chairman. Thank you all very much. Again, I'm still 
focused on early, early learning. Head Start reaches only half. 
Who mentioned that? Senator Franken mentioned that 50 percent 
of eligible preschool--eligible--that's low income--50 percent, 
but it reaches only 4 percent of eligible babies and toddlers, 
4 percent.
    Childcare Federal subsidies serve only one out of seven 
eligible children. I've worked very hard in healthcare on 
putting more resources into prevention and wellness. Invest up 
front rather than patching and fixing and mending at the 
backend.
    I still ask all of you to keep thinking about--are we doing 
enough in the early years to get kids ready for school in those 
early, early years--everything from nutrition to intellectual 
stimulation, challenges for young kids. I've been at this a 
long time and I asked you what you would change. I'm still 
thinking more in terms of how we focus on these early, early 
years.
    I'll take this to heart, what you said, and it's 
assessments, evaluations of teachers, the high school exam, 
teacher incentives to get our best teachers. I'm reminded that 
in some countries, they take the top students in high school 
and give them full scholarships and that is if they go into 
education, into teaching. And we don't do that in this country.
    I'd sum up by saying that, as you said, Dr. Hanushek, we 
were tinkering around the margins. I guess that's what we do 
around here. We tinker around the margins a lot of times. But 
if we get enough margins, maybe we can affect the central core. 
But sometimes that's the best we can do.
    This has been very provocative, as I said many times 
before, and thank you for your input on this. As we proceed, 
I'd just ask you, if our staffs can continue to reach out to 
you and ask for your input.
    I never got to you again, Dr. Hanushek, because you said 
something about the margins, and you said we need to make major 
changes, and I didn't ask you what those were. Maybe if you 
could send those to us.
    Mr. Hanushek. I'd be happy to respond.
    The Chairman. I'd love to have your thoughts on what you 
consider to be the major changes that we ought to make rather 
than tinkering around the edges.
    Again, thank you all very much. We'll leave the record open 
for 10 days, until March 22d. I want to thank all my colleagues 
for their hard work on this. This is an issue that we will 
continue to have further hearings on in this committee and try 
to develop. This is part of a series of hearings that I've 
called for on rebuilding the middle class in America. And, 
obviously, you're not going to rebuild the middle class unless 
they have good jobs and economic opportunity, and that all 
comes back to education.
    Thank you all very much. I appreciate it.
    [Whereupon, at 12:05 p.m., the hearing was adjourned.]

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