Historically, the main equalizing force — both between and within countries — has been the diffusion of knowledge and skills. However, this virtuous process cannot work properly without inclusive educational institutions and continuous investment in skills. This is a major challenge for all countries in the century underway.3 — Thomas Piketty
In the fall of 2013, the Organisation for Economic Co-operation and Development (OECD) published a report entitled OECD Skills Outlook 2013: First Results from the Survey of Adult Skills. 4 The report documented the relative performance of U.S. adults (age 16–65) on a comprehensive survey of skills known as the Programme for the International Assessment of Adult Competencies (PIAAC). PIAAC measures adult skills across three domains: literacy, numeracy, and problem solving in a technology-rich environment (PS-TRE). The report revealed that the skill levels of U.S. adults compared to those of 21 other participating OECD countries were dismal across the board. 5 The authors of a subsequent OECD report on the U.S. results, Time for the U.S. to Reskill, leveled a blunt evaluation of the U.S. performance, describing it as “weak on literacy, very poor on numeracy,” and slightly worse than average on PS-TRE. “Broadly speaking,” the report concluded, “the weakness affects the entire skills distribution, so that the U.S. has proportionately more people with weak skills than some other countries and fewer people with strong skills.” 6
Among the 22 participating PIAAC countries, there are 12 where adults age 16–65 scored higher in literacy and 17 where they scored higher in numeracy than their peers in the United States. Among the 19 countries that participated in an assessment of the PS-TRE domain, there are 14 where adults scored higher than those in the United States (figure 1 and table C-1). Given the strong association that research has shown exists between the reading literacy and numeracy skills of a country’s population and the well-being and economic competitiveness of its people, such results are alarming. This is especially true when one considers the most vulnerable members of our society: those without post-secondary education or a high school credential, certain racial/ethnic subgroups, and those less advantaged socioeconomically. 7
Some trust that our best performers still compare favorably with the best educated and skilled in other countries. Others contend that the number of top performing students in the U.S. may be sufficient to fill the need for high-skilled talent in the coming years. Still others believe that, because U.S. millennials (those born after 1980) are the most educated generation we have ever produced, they are poised to set us on the right trajectory and help brighten our future. The U.S. PIAAC results put these convictions to the test, and also help us identify more clearly the challenges we face.
Although evident in the 1990s, shifts in the nature of work and demands for skilled vs. unskilled labor have made it even more apparent today that individuals’ economic security and prosperity rest in large measure on the acquisition of specific skills as well as the ability to augment skill proficiency throughout one’s lifetime. Competency in domains such as reading literacy, numeracy, and problem solving are critical for success in the increasingly complex economies and societies of the 21st century. 8
Given fundamental shifts in the economy over the last four decades, a picture of our society is emerging where fewer individuals are winners—those at the very top. Those individuals without skills, or the opportunity to build skills, have the odds stacked against them. Our goal is to consider these issues in light of the skills performance of U.S. millennials.
The trend data on adult skills in the United States also provide evidence of an (albeit relatively recent) decline in adult skill levels. 9 That is, in both comparative and absolute terms, there is clear cause for concern. The average score for U.S. adults in literacy has declined since 1994 (figure 2). In numeracy, average scores for adults have declined since 2003 (figure 3). Although the gap between our higher (those at the 90th percentile) and lower (those at the 10th percentile) performers has narrowed slightly in literacy since 1994, this is largely the result of marginal gains made by our very lowest performers (those at the 10th percentile) and declines for almost everyone else (except those performing at the 25th percentile). In numeracy, the story is even more distressing. Here, the overall average score declined by 9 points. This decline was evident at every percentile of performance except the 90th, where the changes since 2003 were not statistically significant. If we continue on this path, there could be serious consequences for America’s economy and the future prosperity of our workforce.
The individual and societal costs of having a large proportion of the population with low skills (both compared to previous years and to the percentages in other countries for the PIAAC assessment) should not be underestimated. In addition to economic costs in terms of the competitiveness of the labor force in a global economy, there are also more subtle, no-less-important consequences of having a population with deeply divided skill levels. Such societies risk becoming increasingly polarized, fragmented, and divided. Social cohesion suffers, and civic engagement becomes more sporadic and tenuous. 10 Cross-country comparisons of the PIAAC results by OECD reveal some important and clear patterns and correlations: Adults with higher skills are more likely to report better health, have more trust in political institutions, and demonstrate increased rates of volunteerism. Lower skilled adults, on the other hand, represent the most vulnerable members of society—those at risk of having restricted access to basic services and less than full participation in democratic practices and educational opportunities. Skills are also strongly associated with access to labor participation and training opportunities. Other research suggests that the distribution of skills of a country’s population is inextricably—albeit complicatedly—linked to the distribution of its income and wealth. 11
Having large segments of the population without adequate skills poses a challenge beyond the immediate need to help improve the lives of those who struggle to find adequate and sustainable employment. The ripple effects can also be felt in terms of increased income and wealth inequality. In fact, the entire society is affected by a cycle that perpetuates and exacerbates inequalities and brings into question whether we are offering individuals an equal opportunity to succeed. As the economist Joseph Stiglitz has pointedly acknowledged, an economic and political system that is perceived to favor some citizens over others is not sustainable in the long run. “Eventually,” Stiglitz warns, “faith in democracy and the market economy will erode, and the legitimacy of existing institutions and arrangements will be called into question.” 12 Although the nature of the relationship among the distribution of skills, economic inequality, and challenges to sustaining a coherent participatory democracy is part of a complex story with many narrative threads, it is an important one to explore and understand.
One might reasonably ask whether the aggregate PIAAC results mask important differences across key segments of our population. Can we presume that the skills of our younger population provide some optimism for the future? Perhaps our more educated, younger adults (millennials)—especially those with post-secondary education—possess the skills or human capital that will help us “grow” our way out of the problem.
With these questions in mind, this report disaggregates the skills data for U.S. millennials (those under 35) with respect to key demographic and other factors (i.e., educational attainment, parental educational attainment levels, nativity, and race/ethnicity), and where possible, compares the results of U.S. millennials to their peers in the other OECD countries and to previous assessments of adult skills. The results of these analyses are then discussed within the context of the growing inequality of opportunity in the U.S. and the impact this has on skills acquisition and outcomes for both current and future generations. Our aim is to address the current skill level of our young adults, but also to suggest essential ways in which skills interact with broader social and economic forces. In so doing, the primary concern here is not to bemoan the nation’s declining status. Instead, our central point is this: The PIAAC results highlight deeper social issues concerning not only how we compete in a global economy, but also what kind of future we can construct when a sizable adult population—especially the millennials—lacks the skills necessary for higher-level employment and meaningful participation in our democratic institutions.
3 Eduardo Porter, “Q&A: Thomas Piketty on the Wealth Divide,” The New York Times, March 11, 2014, http://economix.blogs.nytimes.com/2014/03/11/qa-thomas-piketty-on-the-wealth-divide/.
4 Organisation for Economic Co-operation and Development, OECD Skills Outlook 2013: First Results from the Survey of Adult Skills (Paris: OECD Publishing, 2013), http://dx.doi.org/10.1787/9789264204256-en.
5 See appendix A for more information about the PIAAC assessment and a list of participating countries. Nineteen of the 22 countries participated in the PS-TRE assessment.
6 OECD, Time for the U.S. to Reskill?: What the Survey of Adult Skills Says (Paris: OECD Skills Studies, OECD Publishing 2013), http://dx.doi.org/10.1787/9789264204904-en.
7 Noah Berger and Peter Fisher, “A Well-Educated Workforce Is Key to State Prosperity,” EARN (2014).
8 Andrew Sum, Ishwar Khatiwada, Walter McHugh, and Sheila Palma, The Widening Socioeconomic Divergence in the U.S. Labor Market (Prepared for Educational Testing Service, Opportunity in America, forthcoming); Claudia Goldin and Lawrence F. Katz, The Race Between Education and Technology, (Cambridge, MA: Harvard University Press, 2008); David Autor, The Polarization of Job Opportunities in the U.S. Labor Market (Center for American Progress and The Hamilton Project, 2010).
9 PIAAC data was analyzed so that trends could be compared to previous adult literacy assessments. In literacy, comparisons are made between PIAAC (2012) and both the Adult Literacy and Life Skills (ALL) survey (2003–2008) and the International Adult Literacy Survey (1994–1998). In numeracy, trend comparisons are made between PIAAC (2012) and ALL (2003–2008). In both the literacy and numeracy domains, approximately 60 percent of the items are common between PIAAC and previous international surveys to ensure the comparability of these domains.
10 Thomas Piketty, Capital in the 21st Century (Cambridge, MA: Harvard University Press, 2014); Joseph E. Stiglitz, The Price of Inequality (Bristol, England: Allen Lane, 2012); Richard G. Wilkinson and Kate Pickett, The Spirit Level: Why Greater Equality Makes Societies Stronger (New York: Bloomsbury Press, 2010).
11 OECD, OECD Skills Outlook 2013.
12 Joseph Stiglitz, “Climate Change and Poverty Have Not Gone Away,” The Guardian, January 7, 2013, http://www.theguardian.com/business/2013/jan/07/climate-change-poverty-inequality.