The education-jobs link

Students in the Bentonville, Fayetteville and Greenwood School districts, in four consecutive annual reports (2005-08) produced by our economic think tank earned 'A' grades for their performance on standardized national tests.

How significant was this achievement? Only five Arkansas public school districts earned this honor.

Three state reports, by contrast, conclude nearly every Arkansas public school meets or exceeds standards. These reports (2009-10 to 2011-12), obtained by our organization in August from the state Department of Education found 98% of Arkansas public schools met or exceeded standards.

The revelation, on the surface, sounded too good to be true. Indeed, on Nov. 5, the department characterized 793 schools as "Needs Improvement" for failing to meet performance targets on graduation and test rates. Department officials insisted the schools are not failing.

These dueling episodes illustrate department officials appear unaware of the link between high education standards and strong labor markets.

First, a skilled work force is a factor of economic development. Businesses and entrepreneurs rely on this force, shaped by a state's system of public education.

Second, markets abhor uncertainty. Conflicting reports about the true state of Arkansas public education creates uncertainty. Arkansas public education either has a problem or it doesn't.

Third, employment data (U.S. Bureau of Labor Statistics) clearly shows there is a problem in terms of jobs creation. Arkansas payroll employment, the broadest state-level economic indicator has grown at only half the U.S. average (2.1% to 4.2%) in the  current expansion, which started in 2009.

Five of six adjacent states also have higher job creation rates.

When was the last time you heard education department officials say the lack of new jobs was a more important problem than increased funding for schools? Education officials' failure to set high standards has not fooled decision makers operating in labor markets. A recurring theme, expressed privately by entrepreneurs is that a shortage of skilled labor exists in Arkansas.

Arkansas policymakers have enacted some reforms in the last two decades. Charter schools came to Arkansas in 1999 after a long battle. Today, nearly 10,000 students from Helena to Little Rock to Northwest Arkansas attend charters.

A school choice debate has started. Twenty-three states and the District of Columbia have school choice programs, notes the Indianapolis-based Friedman Foundation. These include seven of 12 states in the Southeast region, excluding Arkansas.

But education department officials need to send a clear message to labor markets: Arkansas education needs high standards, unconventional reforms to address failing schools, and higher job creation rates.

Market judgments may seem unkind. But they point the way forward, with Benton, Sebastian and Washington counties as examples. Students, parents, teachers, administrators and taxpayers with high standards have produced above-average local schools. These have contributed to above-average job creation rates in Northwest Arkansas.

Arkansas will improve economically if the state Department of Education follows this example.