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College: The Key to Prosperity - or Is It?

The fact that Americans want their children to go to college is not just a matter of status. Even with the crippling debt carried by the average four-year college student, the investment is more than worth it in terms of added lifetime income.  

College pays off because employers need more highly skilled employees than the market is supplying, driving up the wages of the college-educated.  The gap in wages between those who have high skills and those who have low skills is widening because there are more people with low skill than there are jobs for such people.  That's because more and more low-skill, routine work is being done offshore or by machines.  Little surprise, then, that public policy is designed to get more and more young people into college.  Who can doubt that that is the right policy?

I can.  Let's look at the Swiss.  They are among the richest people on earth.  Their economy is rated among the most competitive.  Their unemployment rates are a small fraction of ours.  Their people are among the world's healthiest.  The country is rated among the most desirable places to live.  And guess what?  Seventy percent of their high school students are in their vocational education system.  Only twenty percent are headed to university.  Employers, instead of demanding more college graduates, are big supporters of the vocational education system and lobby to keep the proportion going to universities that are not part of the vocational education system low.  Leaders of big firms are proud to have been apprentices once themselves and are perfectly happy to have their own children follow in their footsteps.

If graduation from a four-year college is the key to success, why is Switzerland beating the pants off us on virtually every measure of national success with an economy staffed mainly by graduates of their vocational education system?

On a recent trip to Switzerland, we asked top executives of some of Switzerland's biggest global firms to join us for a roundtable discussion.  Asked to account for Switzerland's remarkable economic success, they explained that, about a hundred and fifty years ago, the Swiss, having no physical assets, concluded that their only important asset was the skills of their people.  If they were going to have broadly shared prosperity, they would be paying very high wages.  They would have to compete on quality, not price.  That required them to have one of the world's highest quality workforces.  Their determination to have a top quality workforce has not wavered since then, irrespective of political party.

The Swiss education and training system is relentlessly meritocratic.  The standards at every level of the system are very high.  That includes the standards for both vocational education and their universities. The Swiss have built many pathways through their system, and provide a very high level of personalized assistance to students as they go through their system.  The message to Swiss students is that we will do everything we possibly can to help you, but getting ahead in our system requires you to meet world-class standards, and that will not change.  

Year after year, the Swiss compulsory education system is rated among the world's most equitable and best performing.  Students going into the vocational education system come from every ability level, so they are not viewed as losers.  To the contrary, they are on a path that can lead to top positions in global firms.  Whatever they go on to do, they wind up with qualifications that mark them as having met very high standards for the work they have chosen to do, qualifications in which they can and do take considerable pride.

The most valuable feature of the Swiss vocational education system is the fact that one cannot get into it without obtaining a contract with an employer willing to offer a multi-year apprenticeship at their work site.  This is not a work experience program.  Employers offering apprenticeships must provide substantial instruction and mentoring to students of a kind that is spelled out in detail in regulations that are designed by industry associations.  Students alternate between time spent in vocational schools, paid for by government, and time spent in individual firms and in programs offered by industry associations, paid for by the firms.  Employers do not do this out of the goodness of their hearts.  Economists studying the system have found that, on average, the firms come out ahead on their investment, after they have paid what the law requires to their apprentices (substantially less than the minimum wage).

What impressed us most were the apprentices we talked with, young people who were entrusted with substantial responsibility by their employers, very proud of the remarkable level of skills they were achieving and of the contribution they were able to make to the firm for which they were working, and justifiably confident of their future.  Many could see a clear path to college if they wanted it, but most were content to start out on the career for which they were training and eager to see where it would lead.  Nothing about them suggested that they felt that they had been shunted into a dead end.

On every important point, the American system is the opposite of the Swiss.  There is no consensus in the U.S. that we need to compete on quality, not price, which means there is no agreement that the American future depends on high skills at every level of the workforce.  Whereas the Swiss insist on setting very high standards for their compulsory, vocational and higher education systems, the standards for our elementary and secondary schools have been in the middle of the pack, not the top; we do not have a national system of occupational standards to drive our vocational system, let alone one set to high standards, and there is accumulating evidence that the standards for our colleges and universities have been slipping for years.  Our vocational education system, to the extent that we have one, rarely includes serious employer-provided on-site education and training.  But, in our misguided drive to send everyone to four-year colleges, we have turned our back on the pride of the Swiss system, the vocational education and training system that they view as the backbone of their economy.  Do you suppose that it might be time to rethink our system?

Follow NCEE @CtrEdEcon.

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