Earn What You Spend

It’s hard to process all the disconcerting news we’ve had in the past few months, but this headline in particular caught my eye: the United States economy lost 159,000 jobs in the month of September alone, which was quickly identified as the worst number of this sort in over five years.

Unemployment Rate, September 2008

Source: Bureau of Labor Statistics

What does this mean?

The higher the level of education, the lower the unemployment rate.  Put another way, recessions affect those with less education the most.

We’ve been focusing on the spending side of the earn / spend equation because we can most readily pull this lever in the short term.  Changing your earnings is more difficult and a longer-term proposition, but equally (if not more) important.

Perhaps it is obvious to say one of the keys to greater earnings is education, but it bears repeating, especially in the face of this evidence.  Among the many challenges facing our nation right now, education is certainly one of the most important and far-reaching.  We’re in the midst of an epidemic:

Only about half of all students served by the main school systems in the nation’s 50 largest cities graduate from high school … “When more than one million students a year drop out of high school, it’s more than a problem, it’s a catastrophe. Our economic and national security are at risk when we fail to educate the leaders and the workforce of the future,” said General Powell. “It’s time for a national ‘call to arms,’ because we cannot afford to let nearly one-third of our kids fail.”

(A full copy of the report can be found here.)

An educated populace is vitally important for many reasons, though perhaps it is most immediately evident as a critical component of our economy’s ability to adapt to an ever-changing landscape.  With days like we’re having today, we simply cannot afford to let this nation’s education system fail.