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Education's impact on economic competitiveness : hearing before the Subcommittee on Education, Arts, and Humanities of the Committee on Labor and Human Resources, United States Senate, One Hundred Fourth Congress, first session ... February 2, 1995 online

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that addresses all of our most critical issues in an integrated way, and puts the bal-
anced best interest of all above the special interests tnat have for too long driven
our governments.

We all know too well the list of major problems: poverty, crime, illiteracy, racial
tensions, violence and unemployment to name a few. We even know many of the
key ingredients for solutions. The challenge for us is in developing and defining the
details, getting it done, and moving it all — from rhetoric to reality.

The United States is in grave danger of losing both its greatness and goodness.
In fact, we are careening down a path that, if not altered soon and dramatically,
will condemn us to mediocrity. Economically, we face massive budget and trade defi-
cits, noncompetitiveness in global markets, low productivity gains, crumbling infra-
structure and other serious problems which, if we don't ad«lress soon, will have dire
consequences on our Nation's health.

We can change the course of our direction. However, we as a nation can only do
this by making fundamental changes in the way we try to solve our problems. The
American public has signaled their recognition that a lot is terribly wrong. The No-
vember elections evidenced the high level of frustration by the public with govern-
ment decision making at the State, and especially, the Federal levels. The voting
public sent a strong message for radical, not minor, change. As proposals emeree
and the debate ensues, it behooves all of us to become proactively involved in the
process, to put aside political partisanship and to help create and bring about the
changes we so urgently need.

To make change, we need to assess where we are now, where we want to be and
how we will get there. In essence, we need to do some good, sound strategic plan-
ning that will lead to the development of a national agenda that is comprehensible,
clear, credible and affordable. Unfortunately, for the past twenty years, we have al-
lowed partisan politics and special interests to drive our policies in a piecemeal, ad
hoc fashion. What we need are policies with clear goals and action plans that sup-
port a new social and economic national agenda.

Fve already made reference to where we are now. One need not look further than
the front page of the morning newspaper to see the breadth and depth of our plight
nationally and internationally. Just as America's social and economic problems are
interconnected, so too are these kinds of problems connected Nation to Nation. We
cannot forget interconnectivity or interdependence, nor should we try. Our new na-
tional agenda must reflect a recognition that every change we make socially and
economically will affect our global dealings and relationships.

Having taken this quick sobering snapshot of where we are, let's look at where
we want to be. I would like to suggest the following three strategic objectives:

— Superior economic performance that is sustainable to generate enough good jobs
and to raise standards of living necessary for social harmony.

— Superior social systems that are sustainable and, together with good economic
growth, generate opportunity for all but offer a safety net for the truly needy.

— Strong world leadership that promotes international cooperation in problem-

There is no mystery as to what must be done to meet these objectives. Our na-
tional goal should be to eliminate the deficit and begin to generate modest sur-
pluses, including social security, within 10 years. Other solutions include reforming
the tax systems to encourage savings and mvestment, overhauling in radical ways
our system of entitlements, reforming our tort system and reducing our escalating
trade deficits.

There are other steps that need to be taken to address our pervasive social prob-
lems. We should start with improving the Nation's systems of public education.
Much of America's success can been traced to our educational systems. However, we
are experiencing an educational "dry rot" that is only partially visible and is spread-
ing. A few sobering statistics supports this thesis. One in five American adults is
functionally illiterate, and those ranks are growing. On average, our students
ranked fourteenth — ^behind Slovenia and Spain that are ranked twelfth and thir-
teenth — on an international math test. We are almost at the bottom in on most
other international assessments.

There are many compelling reasons for placing major improvements in education
high on our priority list:

— Social justice/equal opportunity;

— alleviation of poverty and human misery;

— reductions in crime and welfare costs;

— ability to compete in a global economy;

— preservation and enhancement of our quality of life.

Improving education is already at the top of my list. I am firmly convinced that
we must change from an input, process-oriented system to one measured by results,
based on what our students actually know and are actually able to do, as a result
of their time in school. I also believe that school systems and children must be held
accountable for the quality of the results.

It is for this reason that I have been so heavily involved in the Business
Roundtable's 10-year commitment to forge alliances with governors, State legisla-
tors. State school officials and many other stakeholders, to make state-level changes
in education policy to cause fundamental school improvement and reform. The Busi-
ness Roundtaole is committed to the following nine Essential Components of a Suc-
cessful Education System:

1. A successful education system operates on four assumptions:
— Every student can learn at significantly higher levels;

— Every student can be taught successfully;

— High expectations for every student are reflected in curriculum content, though
instructional strategies may vary; and
— Every student and every preschool child needs an advocate preferably a parent.

2. A successful system is performance or outcome based.

3. A successful system uses assessment strategies as strong and rich as the out-

4.A successful system rewards schools for success, helps schools in trouble, and
penalizes schools for persistent or dramatic failure.

5.A successful system gives school-based staff a major role in instructional deci-

6.A successful system emphasizes staff development.

7.A successful system provides high-quality prekindergarten programs, at least for
every disadvantaged child.

8.A successful system provides health and other social services sufficient to reduce
significant barriers to learning.

9.A successful system uses technology to raise student and teacher productivity
and expand access to learning.

This nine-point agenda provides the structural framework for reaching the six Na-
tional Education Goals that were set by President Bush and the Nation s Governors
in 1990.

Achieving changes that embody these nine essential components requires broad
and sustained support from all segments of society — ^parents, teachers, principals,
elected officials, business leaders and the students themselves. In many commu-
nities, local businesses have become full partners in unprecedented joint ventures


to improve systems of education along its entire length. For example, since 1993,
TRW Inc. has contributed $250,000 to early childhood projects. In 1995, we will be
investing over $325,000 in two major initiatives to help both preschool children and
their care givers become better prepared with the required life skills necessary to
compete in school and society. We are among many major U.S. corporations
throughout the United States who are making similar commitments to improve sys-
tems of education as a means to enhance economic competitiveness.

I have been pleased and encouraged by the priority placed on education reform
during the Bush Administration, and last year, with the Clinton Administration and
the 103rd Congress, that worked to enact the "Goals 2000: Educate America Act."
I was one of several business leaders who worked veiy hard on this legislation be-
cause of the support it gives states to make systemic improvements to their edu-
cation systems without the heavy hand of the Federal Government dictating how
they should make reform happen.

Additionally, the Goals 2000 legislation complements The Business Roundtable's
strategy to improve the Nation's elementary and secondary schools. It encourages
states, on a voluntary basis, to set demanding acadcnuc standards for all students.
One of the main problems with American education is that, unlike our international
economic competitors, we have no agreement about what students need to know
when they graduate from school. We tell students how many years they need to at-
tend school and how many courses they need to take, but we do not have clear ex-
pectations about what they should know and be able to do. The result, as illustrated
so vividly in the ad you saw earlier, is that American students are not performing
as well as those in other nations.

The states are responding with a variety of exciting educational initiatives. Ver-
mont has a comprehensive reform plan called "A Green Mountain Challenge: Very
High Skills for Every Student; No Exceptions, No Excuses.''In the State of Ohio,
there is evidence that setting higher standards and focusing the system on results
makes a difference in student achievement. Ohio has seen rising test scores on
Ninth-Grade Proficiency Tests as well as ACT and SAT scores.

Kentucky, a State that is implementing a bold education improvement strategy
that includes much higher stanaards for student performance, has seen test scores
improve dramatically. Kentucky's 1995 plan includes an allocation of $36 million for
bonuses to schools and teachers whose students raise their test scores.

South Carolina, Oregon, Missouri, Washington and Michigan are among thirty
states that have standards-setting efforts underway, efforts that should clarify what
students should learn, improve testing and consequently change the way our Na-
tion's 40 million public school students are prepared to come into cur workforce.
However, elected officials, business groups, corporate leaders, teachers and parents
must continue to advocate educational strategies that center on raising academic

TRW Inc. and the Fortune 500 companies that are members of The Business
Roundtable are firmly committed to making fundamental, comprehensive changes to
our Nation's public school systems. The past efforts that merely tinkered around the
edges did not work; we have no choice but to insist that change occur. The stakes
are too high not to do so. Unless we take control of our economic and social plights
at home, we are unlikely to have either the resources or the m.oral authority to lead.
The United States cannot afford not to lead. The risks to our own self interest, and
to the rest of the world, are too great.

I would like to encourage this subcommittee, and all committees with jurisdiction
over educational issues, to continue supporting the work that has already been ac-
complished here in Washington on behalf of State and local school reform. Now is
not the time to back away from what is truly a bi-partisan commitment to our Na-
tion's children, a commitment that The Business Roundtable continues to firmly
stand behind.

We must all recognize that the changes we are attempting to make will take time.
We must resist the temptation to pull-back in favor of politically-appealing quick
fixes. Such retreats will do little more than redirect our attention and keep moving
us and our children further behind.

Senator Jeffords. Mr. Wurtzel?

Mr. WuRTZEL. Chairman Jeffords and distinguished Senators,
thank you for the opportunity to testify on the link between edu-
cation and economic competitiveness. As Senator Jeffords indi-
cated, I am Alan Wurtzel, and I am currently vice chairman of Cir-
cuit City Stores; from 1972 to 1986, I served as CEO. Circuit City
is today a company approaching $7 billion in sales.


Since stepping down as CEO of Circuit City, I have devoted ap-
proximately half my time to improving education of this country.
I have served on two national panels; I am very proud and honored
to do so. The first produced the landmark report "America's Choice:
High Skills or Low Wages?" and the other was a subcommittee of
the congressionally created Competitiveness Policy Council that Al-
bert Shanker chaired.

On a continuing basis, I serve as a member of the Virginia State
Board of Education, so I am involved in education policy on a day-
to-day basis with the State of Virginia. I am a trustee of Oberlin
College in Senator DeWine's home State and a member of the exec-
utive committee of the National Alliance of Business. The National
Alliance, or NAB, is an organization of 3,500 members from very
large — including companies like MCI, Bell South and Motorola—to
veiy small. Its historic focus is on work force education, training
and economic opportunity, and I am here today to testify on behalf
of NAB and myself.

Most businesses recognize that they can no longer compete in
this world based simply on the advantages of location, investment,
or natural resources. The age of information and rapid transpor-
tation has created a global economy that has changed the nature
of work and the workplace for good. These changes demand a new
kind of worker, a knowledge worker, with a new set of skills.

The skill deficits of our Nation's workers are all too apparent.
You and Mr. Grorman have provided quotes and statistics, and
there are other ways to measure it, which I will not take the time
to detail. I think the case is clearly and well-made that our Na-
tion's skill levels, particularly for the front-line workers, are well
behind those of our global competitors.

This shows up at Circuit City in ways that I would like to de-
scribe more specifically. At Circuit City, we screen 15 to 20 can-
didates for every job vacancy. Typically, applicants for entry-level
jobs lack minimal capability of reading, writing, computing and
communicating. They often lag basic generic work force skills such
as critical thinking, efficient resource allocation, and interpersonal

Like many employers, Circuit City has eliminated or sharply re-
duced most of its low skill jobs. That exacerbates the problem. Our
warehouses, for example, utilizing State of the art technology, have
two or three times their former throughput. We have put through
two or three many times as many goods in the same warehouse
with half as many employees through the use of State of the art

Our advertising department produces three times as many print
ads with the same work force by composing ads on a computer
rather than artists used to lay them out by hand.

Our stores no longer have cashiers. Sales counselors complete the
transaction by taking cash, checks, credit cards, or credit applica-
tions, so that there is a "one-stop" between the time the customer
enters the store and the time they leave, reducing or eliminating
the relatively low-skilled cashier jobs.

Those jobs that remain are focused on customer satisfaction, all
of which require good communications, critical thinking, and inter-
personal skills.


This type of reengineering is occurring throughout American
business. The low skill jobs are gone or are far fewer in number.
The jobs that remain require far higher levels of ability to read, to
write, to communicate, to master new knowledge, to learn new
skills, ask questions, and solve problems. Yet our schools for the
most part continue to operate based on old assumptions and out-
moded policies.

Workers on a 1920's production line or a family farmer did not
need many skills beyond basic 6th or 8th grade math and English.
Consequently, for the non college-bound kids, we have a dumbed
down system with low expectations and a culture of accepting little
effort or results to move students through the process.

For the academically talented or economically advantaged, our
high schools provide an enriched academic program geared to col-
lege admissions requirements. And for the first 70 years of this
century, this dual system I think worked reasonably well in this
country. Our production system at the early part of the century
was based on a relatively small number of well-educated managers,
engineers and scientists who directed a large number of relatively
unskilled workers, and we became the economic wonder of the
world using a large mass of relatively untrained people and a small
group of highly trained people in a Henry Ford or Tayloristic pro-
duction system.

But that model of competitiveness is, of course, no longer effec-
tive. American business, like Circuit City, is finding that these
older paradigms no longer work. To be efficient, we need more and
more workers who can think, learn, and solve problems on their
own, and fewer and fewer whose principal skill is to show up on
time and do what they are told, over and over and over again.

For almost a decade, the leaders of America's leading high tech
businesses such as IBM, Xerox, TRW, and others have led the fight
for standards-based education reform. The work of the BRT and
the nine principles has become the standard, I think, for education
reform in this country. And I am pleased to note that I think this
message has now moved down from the first-tier companies of this
Nation, such as those I have mentioned, to the broader business
community, and there is greater and greater consensus among me-
dium-size and small businesses that this kind of systemic edu-
cation reform is required.

I think the basic problem in the achievement of American kids,
that Mr. Gorman and others have quoted, is not that our kids are
anv less able, but that we have lower expectations, and we are not
able to enforce or create higher accomplishment, because if we
don't have a high standard against which to measure results, we
are unable to hold our kids and our teachers and our school sys-
tems to the outcomes or results that we want.

The Competitiveness Policy Council found that the average high
school student in 1987 did only 3V2 hours of homework each
week — 3V2 hours a week for high school kids. That is squeezed into
a busy schedule, they found of 25 hours of television watching and
10 hours of employment.

So we have got our priorities backwards, and I do not think it
is only the fault of the schools; it is the fault of our society. Until


we set high standards and insist that our kids and our schools get
there, we are not going to catch up with our global competitors.

Accountability for students today simply means staying in school
long enough to accumulate the credits required to graduate, regard-
less of what the student knows or is able to do. Accountability for
schools or school systems generally means comparing the results
with peers — ^Virginia and Vermont, for example, or Richmond and
Roanoke, within the State of Virginia. We compare ourselves to
each other on a norm-referenced rather than criteria-referenced
test. "Norm-referenced" means that this is the average, and are we
above or below the average. This is like Lake Woebegone, where
everybody is above average. But none of us are comparing our-
selves to an external standard and objective criteria of what kids
need to know and be able to do to be good workers and for our
country to compete in the global economy.

I believe there is a role for the Federal Government to encourage
States and localities to develop measures of accountability based on
objective criteria and not comparative expectations. Once they have
objective standards, then they can begin, the States and localities,
to create meaning^l incentives for teachers, students and school
systems to perform at or above expectations and also create nega-
tive consequences for those who do not. Without such incentives
and consequences, we cannot expect to catch up much less exceed
the performance of our global competitors.

This is one reason why so many of us in the business community
supported the Goals 2000: Educate America Act, passed in the last
session. I realize that in the course of its passage through Con-
gress, a number of changes were made to the Groals bill that de-
tracted from the original purpose. These problems can be remedied.
NAB believes it is essential. But NAB believes that we should not
throw the baby out with the bath water, that it is essential to re-
tain a national as distinct from a Federal entity, and a process —
a Federal entity and a Federal process to set education standards
that States can use as a benchmark, on a voluntary basis, not to
be imposed, but as a benchmark for States to copy to the extent
that they want to, to reconstruct their school systems and set high
standards for all kids.

I believe most Governors want this, most business leaders want
this, and the country needs this.

In my capacity as chair of the National Alliance of Business'
Council on Excellence in Education, I have been chairing a sub
task force on education standards. The task force, comprised of
over 34 companies, is designed to inform standard-setters at both
State and national levels about what business expects from newly
minted or newly graduated entry-level workers.

Last week, we released our initial recommendations to the Na-
tional Education Goals Panel. I have copies here, and I believe cop-
ies are available for your staff and for the committee to review.

Mr. WURTZEL. There were nine basic principles to guide the de-
velopment of standards. Business is clearly interested in high aca-
demic standards, and I think in that respect there is little or no
difference between our goals and those, let us say, of the college or
university community. And we certainly share the basic nine prin-
ciples of the BRT.


But in addition to that, we believe first of all that there must be
one set of standards for all kids; that the standards must include
a common core of skills such as the SCANS skills, which I am sure
you are familiar with; skills about being able to do critical think-
ing, to allocate resources, whether it is time or money, efficiently;
interpersonal skills, teamwork, things of that nature which are
more important in the workplace than they are for college or uni-
versity work as such.

These standards must reflect real world requirements, they must
be voluntary, they must be dynamic and change as the world is
changing. Our standards need to change.

There is no reason to believe that American students cannot
master the same difficult material in core academic subjects that
is routinely expected of students in our competitor countries. On
the contrary, Americans have always risen to the challenge once
they understand it clearly.

The question before us needs to be: Where on the face of the
globe are educators and students together doing the best job of pre-
paring a future work force for the 21st century? American firms
must meet world class competition to survive and prosper, and the
business community believes that no less should be expected of
American teachers, parents, and students.

Thank you.

[The prepared statement of Mr. Wurtzel follows:]

Prepared Statement of Alan L. Wurtzel

Thank you for the opportunity to testify on Education's Impact on Economic Com-
petitiveness. My name is Alan Wurtzel. I am currently Vice Chairman of Circuit
City Stores, Inc. From 1972 to 1986 I served as CEO of Circuit City. During those
years Circuit City grew from $55 million in sales to $1 billion. This year, sales will
exceed $7 billion.

Since stepping down as CEO of Circuit City, I have devoted approximately half
my time to improving education in this country. I have served as a member of two
national commissions on education. The first is the bipartisan commission that pro-
duced the landmark report: America' s Choice: high skills or low wages!

I also served as a member of the Education Sulx;ouncil of the congressionally cre-
ated Competitiveness Policy Council chaired by Albert Shanker.

On a continuing basis I serve as a member of the Virginia Board of Education,
as a Trustee of Oberlin College, and a member of the Executive Committee of the
National Alliance of Business. NAB is an organization of 3,500 members, from very
large (MCI, Bell South, Motorola) to very small. Its historic focus is on work force
education, training and economic opportunity.

I am testifying today on behalf oi NAB and myself. Most businesses recognize that

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Online LibraryArts United States. Congress. Senate. Committee on LaboEducation's impact on economic competitiveness : hearing before the Subcommittee on Education, Arts, and Humanities of the Committee on Labor and Human Resources, United States Senate, One Hundred Fourth Congress, first session ... February 2, 1995 → online text (page 2 of 15)