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The economic benefit of reducing the dropout rate

The economic benefit of reducing the dropout rate

Credit: ASSOCIATED PRESS

by CYNTHIA WISE, Sr. Assignments Editor, KING 5 News

KING5.com

Posted on November 26, 2009 at 12:51 PM

When I started this blog, people asked me why I am so passionate about the dropout crisis. As someone concerned about education and children, I wonder what will become of the roughly 15,000 kids who don't finish school each year in the Puget Sound Region. Without a diploma, what will their future hold? How will they make ends meet? What legacy will they pass on to their children? And, as a taxpayer, I wonder how much we are going to have to pay to support a population that cannot support itself.

A report was issued this week from the Alliance for Education,  "The Economic Benefit of Reducing High School Dropout Rates in America's Fifty Largest Cities."   In a conference call with reporters Alliance President Bob Wise (no relation) pointed out that dropouts do so "at a great cost to themselves, but also to their communities, including the businesses they would have used and the state and local governments to which they would have paid taxes." Nationally, just under 600,000 students who should have graduated in 2008  - roughly the same number of people who live in the city of Seattle - dropped out of school. If even half of them had finished school, the report suggests, together they would have earned over $4.1 billion in additional wages over a year compared to their earnings without a diploma. Dropouts earn only about 60 cents for every dollar a high school graduate makes.

The report from the Washington-based organization suggests if half of the nearly 15,000 who dropped out in 2008 in our area had graduated, tax revenues would have creased by nearly $9 million each year as a result of increased spending and higher salaries.

The Alliance study falls short in that it does not factor in the cost of law enforcement, jail/prison expenses or welfare. Statistics in our state indicate three-quarters of all inmates in Washington's prisons are high school dropouts, with each inmate costing taxpayers just over $30,000 per year. That's nearly three times what it costs to educate a student each year in Seattle Schools.  A study by Northeastern University determined each dropout costs taxpayers over $292,000 over their lifetimes in terms of lost earnings and the social costs of incarceration, welfare and healthcare. That's more than $4.3 billion in the Puget Sound Region for just those who dropped out of the class of 2008.

In January the Alliance intends to release expanded numbers to include the economic benefit projections of spending and investment, job and economy growth as well as home and auto sales.

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