By Michael Hicks
Guest Columnist

Michael Hicks, Bureau of Business Research

Indiana is in the process of revamping its high school curricula. This could be a superb opportunity to rethink some fundamentals about schooling, its role in society and the needs of the future economy. It is also a good time to re-center the long-term wellbeing of students into the discussion.

However, the last time Indiana made significant changes to school curriculum, we failed badly. That cannot happen again.

In December 2013, then-Gov. Mike Pence announced an ambitious plan to offer more career-focused education to Hoosier high school kids who weren’t going to college. It was a smart, thoughtful and much-needed addition to our educational landscape. I was an enthusiastic supporter and wrote in support of it.

Almost from the beginning, the execution of that plan was botched. It is worth recounting how a very good idea became very bad public policy, and how the accumulated mistakes of a decade continue to haunt Indiana’s economic performance even now and into the distant future.

The Daniels-era education reforms were successful on almost every important measure. The push for higher standards revealed itself in test scores, graduation rates and college attendance and success. They strengthened good local public schools and forced bad ones to change. But not everyone wishes to go to college and, for three generations, we’d cut programs for those students.

Pence’s plan was met with strong support by business, which offered free curriculum in S.T.E.M., and support for students wishing a career route. My school corporation, led by Jennifer McCormick, developed an award-winning program with a local manufacturing firm. Things started off well. Then the Department of Workforce Development began to push the state’s board of education.

The DWD had an occupational forecast claiming that, between 2014 and 2024, there’d be a huge demand for high school-only graduates — that is, students who graduated high school and did not go to college. The DWD forecast claimed the state would need 400,000 more high school-only graduates by 2024.

I did everything I knew how to do in order to explain why this was mistaken. I used labor demand forecasts from a half dozen economists that said we’d need fewer high school graduates by 2024. I showed them the studies from the 1970s through the 2000s explaining how these forecasts were too flawed to be used as a labor market policy tool.

Nothing I said or wrote had any effect. The DWD had already run off their economists for saying roughly the same thing. They weren’t at all interested in hearing analysis from anyone who actually knew anything about labor markets. The newer versions of that forecast are still guiding both labor market and education policy in Indiana.

All of this presents the question: How wrong were they? A lot.

In 2015, the forecast overstated the demand for high school only graduates in 2014 — that is, the previous year — by 190,000 workers. Yes, you read that correctly. They actually got history wrong. I’ve never seen a forecast that wrong, that quickly. Still, that did not deter their enthusiasm for the forecast.

As of last fall, Indiana has 20,000 more high school graduates working than in 2014. So that forecast of demand for 400,000 more high school graduates is going to be wrong by about 2,000%.

I write this because it is my biggest professional failure. Had I been more persuasive, I should’ve been able to avoid the train wreck that ensued. I was not, and the state has been trapped by bad human capital policy ever since. It has significantly weakened Indiana’s long-term economic prospects.

The recovery from the Great Recession was the worst economic expansion in state history. We slipped on every important measure of economic success, with some of the worst performances coming in the last five years of the expansion.

The COVID and post-pandemic economy should’ve been very kind to Indiana. Because of our manufacturing intensity, our growth should’ve outpaced the nation. It did not. The reason for 15 years of relative decline is that we have a poorly educated workforce that is getting worse.

That bad labor forecast from 2014 was very influential in the legislature. And how could it not be? It was a false promise of economic growth without actually investing more in education. It didn’t matter that the nation had gone more than two decades without creating a single net new job for someone who hadn’t been to college. The bad forecast drove policy.

Funding for K-12 stalled on a per-student basis and dropped as a share of GDP. Pence’s vision morphed into an anti-college agenda. The state’s workforce development director and the president of our community college system downplayed the benefits of post-secondary education.

By 2017, Indiana introduced career indoctrination down to sixth grade. Among the largest of these were manufacturing occupations and truck drivers. The demand for both is lower today than in 2014.

Pence’s program to offer career-focused opportunities to older students became a platform for pushing students away from post-secondary education. To their credit, in 2020, the legislature increased the age that career pathways would start. So, today, we wait until children are 13 to provide them bad labor market advice.

The most damaging effect was on college attendance. Indiana peaked in 2015, sending 65% of our high school graduates to college, at a time when the national average was 72% of students. In the race for a talented workforce, Indiana was well behind and running slower than the pack. Over the past two years, fewer than 53% of our high school graduates have gone to college. Until this changes, we will not be contenders in a 21st century economy.

We are now near the very bottom in human capital development, making it an opportune time to compare what Indiana does and aspires to do with that of the nation as a whole. Over the past three decades, more than 100% of new jobs in the U.S. have gone to people who attended college, with 8 in 10 going to four-year degree holders.

Over the same time, the college wage premium has grown. We are now 50 years into an economy that places a premium on human capital. That won’t change, no matter how badly some states prepare.

Indiana is moving in the wrong direction at record speed. The period since 2015 is the start of the first decline in educational attainment in Indiana history. The educational reforms we now consider must reverse this decline. We must consider what students need to know for the next 50 years of work — not what low-wage employers say they need after graduation. We simply cannot fail at this again.