The key to growth

Glenn McNatt

May 07, 1991|By Glenn McNatt

THE REPORT "Baltimore and Beyond," which was published in The Sun last Sunday, is but the latest warning of the bleak future which awaits this city unless radical reforms are made in how it manages what the report's authors call a "disastrously flawed" school system.

Most of the report's findings were not new. A similar picture of the city's prospects emerged in the "Baltimore 2000" report sponsored by the Goldseker Foundation in 1987, and in a follow-up study a year later by the NAACP.

The common theme running through all these attempts to outline the major problems confronting Baltimore in coming years is that middle-class flight and a declining revenue base are sapping the city's ability to invest in its most important asset for future economic growth: its children.

Yet in the post-industrial era, economic growth will hinge principally on the presence of highly skilled work forces that can compete successfully in a global marketplace. The wealth of nations increasingly will derive from educated workers.

This notion is hard for many otherwise thoughtful people to accept because it flies in the face of the conventional wisdom of the Reagan era, which saw a massive disinvestment in social welfare programs generally and in federal support for education in particular.

Reagan enthusiastically embraced the radical conservative critique of the welfare state, which viewed federal support for social programs as wasteful and unproductive. In its place, he sought to construct a new social compact patterned on the purely economic laws of the marketplace.

The problem was that Reagan's understanding of how the market actually works is seriously flawed.

Thus the principal economic development strategy of the past decade, which emphasized attracting new business by offering low taxes and cheap labor, is already obsolete. With three-quarters of the world's population in the developing world, there will always be countries that can offer lower taxes and cheaper labor than the U.S.

In fact, the countries that prosper will be those that harness highly educated work forces in enterprises that design and manage the goods and services which will make up the 21st century economy.

Increasingly, business decisions on where to locate will be based on the availability of such workers. Regions that can offer highly educated, productive workers in plentiful numbers will thrive even if taxes and labor costs are high.

German and Japanese workers, for example, are among the highest-paid, highest-taxed workers in the world, yet their economies thrive because the products they produce are also among the world's best.

It cannot be stated to strongly that good schools are the most powerful economic development investment Baltimore can make. An economy optimistically on tourism ultimately will reduce the region to the status of an impoverished Carribean nation whose sole economic asset is a glittering waterfront.

That is pretty much what the once vigorous city of Detroit, Mich., has become. Other aging Rustbelt cities that lack a waterfront have fared even worse -- witness Newark, N.J., or Hartford, Conn.

Baltimore need not follow blindly such examples. But avoiding their fate will require a clear-eyed, long-term commitment to revitalizing our schools into top-flight educational institutions able to produce graduates who possess the academic and social skills needed to seize opportunities created by economic development. Otherwise, the development itself quite simply will never come.

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