Commentary: What do New Mexico and DC have in common? Not much you might think. Cowboys vs. lobbyists; arroyos vs. back alleys; deserts vs. urban canyons. But one thing they have in common is being dead last in high school graduation rates at 69%.
That the next generation will be more prosperous than the previous is the essence of the “American Dream.” Graduation from high school has been and remains an essential element in achieving this dream. New Mexico is failing its children. Out low high school graduation rate more than anything else explains why New Mexico is falling behind.
Growing wage differentials between high school graduates and drop outs have made a high school degree even more important. The real wage of high school dropouts have declined since 1970 while those of skilled workers have increased. Currently, the rate of return on a high school degree compared to dropping out is approximately 50%.
The dropout rate is contributing to economic inequality. There is an increase gap in the wages earned by high school graduates compared to dropouts and an increase gap between high school and college graduates. Dropouts earn less; college grads earn more. Education contributes to inequality.
One issue that isn’t often fully appreciated is that the official high school graduation rate includes those who complete a GED. There is more and more evidence suggesting that the GED provides no economic value. That is, a GED is not a substitute for a high school degree in terms of earning power.
Nationally, about 8% of new “high school” graduates are recipients of a GED. We don’t have a comparable figure for New Mexico, but we do know that a higher percentage of the New Mexico population takes the GED.
Targeted high quality early childhood programs can go a long way to help solve New Mexico’s education problems. Carefully done studies of these programs find a return on investment from birth-to-five programs if 17%.
One of the main reasons for this high rate of return is improved high school graduation rates. These programs are effective because they supplement the environment of children from economically disadvantaged homes.
Birth-to-five programs are expensive, but focusing on cost only misses the point. The benefits more than recoup the price. Society benefits from increased productivity. The individual children benefit from a better life and entry into the middle class.
New Mexico has the resources to fund early childhood programs, which are the permanent funds. The reluctance of the state to make these funds available escapes me. We are number last in graduation rates. We know a policy that works.
Birth-to-five programs can equalize the disadvantage imposed on children by poverty. In this way they exemplify the American Dream, opening up to all.
Christopher A. Erickson, Ph.D., is a professor of economics at NMSU. He is currently serving as interim department head of Economics/Applied Statistics/International Business. The opinions expressed may not be shared by the regents and administration of NMSU. Chris can be reached at chrerick@nmsu.edu.