More than two centuries ago, Adam Smith pointed to the improvement in the skills of workers as a critical source of economic progress and a means of raising living standards. During these early years America's economic success was credited to the fact that we could boast a literacy level of 95%.(Nussbaum 1988) Wrote Smith in the Wealth of Nations: "A man educated at the expense of much labor and time to any one of those employments which require extraordinary dexterity and skill may be compared to those expensive machines."(Nussbaum 1988) .
As America approaches the year 2000 things have changed drastically. A nation that once was the leader in industry and education is losing its grip on both. Today America can boast to the fact that 27 million Americans are functionally illiterate. Lester Thurow estimates that as much as 20 percent of the entire American workforce may be functionally illiterate, that is, unable to read at a fifth grade level.(Views of Sloan School of Management's L. Thurow) The drop rate in today's schools is one million each year and that rate could be as high as 50 percent in some inner cities.(Ehrlich 1988) Of the 2.4 million that do graduate as many as 25 percent can't read or write at the eighth grade level.(Ehrlich 1988) The U.S. Department of Labor says that most 17 year olds can't summarize a newspaper article, write or prepare a good letter requesting a job, solve real life math problems or even follow a bus schedule.(Hudson institute 1988) If we are to believe what Adam Smith wrote more than 200 years ago, that economic growth, competitiveness, and living standards depend heavily on making investments in human capital then Corporate America must attend to the state of America's schools. Mr. William Damon writes: "The quality of life within any society relies on the educational levels of its members. But a republic is especially sensitive in this regard, because the very instrument of democratic governance derives directly from the citizenry's informed participation.