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Econ Update, Spring 1999
A Publication of the Wisconsin Council on Economic
Education, for Educators, Contributors, & Friends of Economic Education.
Table of Contents
The Campaign for Economic Literacy
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Challenge
The need for economic literacy has grown
exponentially throughout the world, and especially in America, in the past
decade. It has intensified as a
result of the rapid advancement of technology, which links the entire world.
Communication is instantaneous. Technology
has created highly efficient ways of doing business and generating economic
interaction, thereby radically changing how we work and what people work on.
Yet during this same time, economic education in
this country has not advanced nearly as quickly to keep pace with the need to
prepare young people effectively to enter the changing workplace.
Recent polls of economic literacy show a nation
poorly adapted to the present and poorly prepared for its future.
Only twenty-three percent of the high school students surveyed know what
a federal deficit is; sixty percent do not understand the purpose of profits;
seventy percent cannot identify the most widely used measure of inflation; sixty
percent think wages are set by government action.
Our nation has simultaneously come face-to-face
with a crisis regarding the quality of education. There is recognized need for systemic change, even a sense of
urgency. Policy makers have tried
to respond, and the need is so all- encompassing that overwhelmed educators have had
to move on several fronts at once. The
pressure for prioritization has focused on the three R’s, plus science.
Other needed subjects of enormous value, such as economics, have not had
requisite “air time.” While
there is on-going effort for reform – and for viewing reading literacy and
economic literacy together as essential skills – such direction has neither
been fully articulated nor taken hold.
There is growing concern about how to increase
understanding of basic economics throughout K-12 schooling.
The business community, those who are closest to and feel most strongly
about the cost of economic illiteracy, perceive that there is a serious and
pervasive lack of economic and financial competence and has recently begun to
support economic education efforts more vigorously than ever, especially in
terms of issues of workplace readiness and standards.
Even though an organization like our Council,
founded 36 years ago, has devoted all of its
attention to addressing this issue, it is still only reaching one out of seven
children through network and programs. This
is not good enough!
The need for economic literacy in
this nation is broad and complex and ranges from encouraging students
approaching high school graduation to take greater interest in economic ways of
thinking and problem-solving for their futures, to teaching young inner-city
elementary students the critical importance of work, saving, and the basics on
how to survive in today’s complex society.
The challenge is this: the future American
standard of living depends on our finding a way to reach all young people, leaving them with an understanding of the market
process and the skills of freedom – that is, to be economically literate.
Response
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The Wisconsin Council on Economic Education
proposes to address this critical need with a major, five-year Campaign for
Economic Literacy. The Campaign
will put into fast-forward the process of achieving economic literacy across the
state, and as a result, will create a critical mass of young people who have the
knowledge, understanding and skills to make informed economic choices.
Our Council is the natural and obvious institution
to serve as the leader in a Campaign for Economic Literacy.
Our mission is to help all students develop economic ways of thinking and
problem-solving that they can use in their lives as consumers, savers and
investors, members of the
workforce, responsible citizens, and effective participants in the national and
global economy. This mission is
founded upon the belief that it is essential to the health and strength of our
nation that people have the ability and confidence to make rational and
productive economic choices. During
the past 36 years, the Council has trained nearly 50,000 teachers across
Wisconsin, who in turn have taught economic concepts to over 3.15 million
students, kindergarten through 12th grade.
Council Elects New Board Member
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At the regular quarterly meeting of the Board of
Directors held April 14, 1999, one new Director was elected to the class of
2001. Ms. Deanna Tillisch, Senior
Public Relations Consultant of Northwestern Mutual Life Insurance Company joined
the Board.
Known as the Quiet Company, Northwestern Mutual
ranks 106th on the Fortune 500 list and is among the top 50 largest companies in
assets.
In her position, Ms. Tillisch oversees all public
relations programs for field use to increase awareness of Northwestern Mutual
Life and its agencies, agents and products.
She is no stranger to the Council.
She currently serves on the Advisory Committee to the UW-Milwaukee Center
for Economic Education. She has
also worked with the National Council on Economic Education on the grant from
Northwestern Mutual Life that funded the development of “The Mint” website.
The site features saving and investing, spending, making a budget,
learning and earning, and the role a person plays in the free market economy.
Robert Wynn Joins Federal Reserve Bank's Advisory Council
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The Federal Reserve Bank has named Robert L. Wynn
II, a Director of the Wisconsin Council on Economic Education and an Official of
the Department of Financial Institutions, to a three-year term on the Fed’s
Consumer Advisory Council.
Mr. Wynn will be one of 30 Council members
advising the Fed on matters concerning consumer financial services and the
Federal Credit Protection Act.
In his position at the Department of Financial
Institutions, he has the unique responsibility of developing and implementing a
financial
education
program which will enhance Wisconsin citizens’ ability to access and
utilize the services and resources of Wisconsin’s financial services industry.
At
the Wisconsin Council, Bob worked with Dr. Mark Schug, Director of the
UW-Milwaukee Center for Economic Education, and the Helen Bader Foundation to
implement a program on economic education for the Milwaukee Public Schools.
James A. Taylor Scholarship for
Excellence
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At the regularly scheduled Board of Directors
meeting held on January 14, 1999, Board
Chairman James R. Nelsen announced the adoption of the James A. Taylor
Scholarship for Excellence. The
$2,000 scholarship will be granted annually to a college sophomore or junior who
is deemed most worthy and has selected teaching economics, grades K-12, in
Wisconsin schools. To be eligible,
the student must be attending a Wisconsin college or university that is the site
of a Center for Economic Education.
Council President William Isbister, profiled the
many contributions of Mr. Taylor to our Council. He explained that Jim is the only Director serving on the
Board who was a founding Director of the Council in 1963. He further explained that Jim Taylor is the only Director
that has been awarded the designation of Director Emeritus and that he has been
awarded the Baker Medal from the National Council on Economic Education as the
outstanding volunteer in economic education in the nation.
Dr. James Grunloh, State Program Director for the
Council said, “Professional development of teachers is our primary focus. This
is truly an appropriate recognition of Mr. Taylor’s long standing commitment
to the work of the Council.”
MPS Boost SMG Winner
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The Milwaukee School of Entrepreneurship won the
state competition of the Fall 1998 session of the Stock Market Game.
Five students, Robin Brewer, Audrey DeWeert, Charles Gray, George Hays
and Natalie Olscheske advised by Mr. Scott Rome, traded in eight different
stocks and ended up owning five stocks. Their
portfolio grew from the initial $100,000 to $830,475 by the end of the 10 week
session.
The team was recognized at a banquet held on
January 14, 1999. More than 80
guests, consisting of family, friends, educators and community business leaders
showed up to applaud their accomplishments and to possibly get some tips on what
stocks to buy.
Mr. Robert Wynn, Manager of the Milwaukee Office of the Wisconsin Department of
Financial Institutions commented, “this is an outstanding example of the good
things that are happening in Milwaukee Public Schools”.
The Milwaukee School of Entrepreneurship is a specialty school whose
enrollment is limited to 150 students on a first-come, first-served basis.
Nine faculty members team-teach the 11th and 12th graders who have
expressed an interest in business and economics and want to learn more about it
before they leave high school.
What We Don't Know About Money Will
Hurt Us Back
Louis Harris
& Associates, Inc., conducted The
Standards in Economics Survey on behalf of the National Council on Economic
Education. This survey is based on
interviews with a national cross-section of 1,010 adults aged 18 and over and a
representative sample of 1,085 students in grades 9 through 12.
The survey was
designed to evaluate adult and student understanding of the Voluntary
National Content Standards in Economics, developed and published by the
National Council on Economic Education. More
specifically, the purpose of the survey was to examine adult and student
familiarity with basic economic principles, knowledge about the U.S. economy,
and understanding of some key economic terms.
In addition, the survey assessed interest in economics and perceived
importance of understanding basic concepts in economics.
How Do You Score? Test Your Economic Knowledge (Answers)
Nine
out of ten adults and eight out of ten high school students got this one right:
1.
For most people, the largest portion of their personal income comes from:
(Standard 13)
(a) Wages and salaries from their jobs
(b) Interest from stocks and bonds they own
(c) Rent paid to them from property they own
(d) Don’t know.
Two out of three adults and just over
half of all high school students knew the correct response to this one:
2.
When a person rents an apartment, who benefits from the transaction?
(Standard 5)
(a) Only the person renting the apartment
(b) Only the landlord
(c) Both the person renting the apartment and the landlord
(d) Don’t know.
When deciding which of two items to
purchase , 86% of adults and 74% of high school students knew to:
3.
When deciding which of two items to purchase, one should always:
(Standard 2)
(a) Choose the item that costs less
(b) Choose the item with the greatest benefits
(c) Choose an item after comparing the costs and benefits of both items
(d) Don’t know.
Three in five adults and half of all
students understood the answer to this one:
4.
In the United States, who determines what goods and services should be
produced? (Standard 3)
(a) Producers and government
(b) Consumers and government
(c) Producers, consumers and government
(d) Don’t know.
The students beat the adults, (80% vs.
58%) on the following question:
5.
If the price of beef doubled and the price of poultry stayed the same,
people would most likely buy: (Standard 4)
(a) More poultry and less beef
(b) Less poultry and more beef
(c) The same amount of poultry and beef
(d) Don’t know.
Ready for more, see if you can do
better than the 37% of adults and 41% of students who answered the following
question correctly:
6.
The resources used in the production of goods and services are limited,
so society must: (Standard 1)
(a) Make choices about how to use resources
(b) Try to obtain additional resources
(c) Reduce their use of resources
(d) Don’t know.
The score on the following was adults
59% and students 43%:
7.
An increase from 5% to 8% in the interest rates charged by banks would
most likely encourage: (Standard 12)
(a) Businesses to invest
(b) People to purchase housing
(c) People to save money
(d) Don’t know.
The students make a comeback on this
one leading 78% to 70%:
8.
Mexico grows fruits and vegetables and Argentina produces beef.
If Mexico voluntarily trades fruits and vegetables in exchange for
Argentinean beef: (Standard 6)
(a) Both Mexico and Argentina benefit from the trade
(b) Both Mexico and Argentina lose from the trade
(c) Mexico benefits and Argentina loses from the trade
(d) Don’t know.
Then they both fall down on the
following with adults at 52% and students at 38%:
9.
The stock market is an example of an institution within our economy that
exists to help people achieve their economic goals.
The existence of this institution: (Standard 10)
(a) Results in an increase in the price of stocks
(b) Brings people who want to buy stocks together with those who want to sell
stocks
(c) Helps predict stock earnings
(d) Don’t know.
And they don’t recover much, adults
34% and students 38% on this one:
10.
A large increase in the number of fast-food restaurants in a community is
most likely to result in: (Standard 9)
(a) Lower prices and higher quality
(b) Lower prices and lower quality
(c) Higher prices and higher quality
(d) Don’t know.
11.
Which one of the following statements about the function of money is
wrong? (Standard 11)
(a) Money makes it easier to save
(b) Money makes trading goods and services easier
(c) Money holds its value well in times of inflation
(d) Don’t know.
They bounce back to the crest of a
wave (76% and 58%) on this one:
12.
A person who starts a business to produce a new product in the
marketplace is known as: (Standard 14)
(a) A manager
(b) A bureaucrat
(c) An entrepreneur
(d) Don’t know.
And stay higher (72% and 52%) on this
issue:
13.
The manufacturers of XYZ winter sportswear have their manufacturing
plants running night and day, but they are unable to produce enough sportswear
to satisfy demand. If XYZ
manufacturers cannot increase production and demand continues to increase, the
price of XYZ winter sportswear will: (Standard 7)
(a) Increase
(b) Decrease
(c) Stay the same
(d) Don’t know.
Before
crashing on the rocks (36% and 19%) on:
14.
Which of the following are most likely to be helped by inflation?
(Standard 19)
(a) People living on fixed incomes
(b) People who borrowed money at a fixed rate of interest
(c) Banks that loaned money at a fixed rate of interest
(d) Don’t know.
Forty-five
percent of adults and forty-one percent of students understood the following:
15.
If your city government sets a maximum amount landlords can charge in
rent, what is the most likely result? (Standard 8)
(a) There will be more apartments available than people want to
rent
(b) There will be fewer apartments available than people want to rent
(c) The number of apartments available will be equal to the number of people
that want to rent
(d) Don’t know.
Adults
outscored students 71% to 41% on this one:
16.
Which of the following would be most likely to accelerate innovation in
the computer industry? (Standard 15)
(a) Placing a tax on all new inventions in the computer industry
(b) Increasing government regulation of the computer industry
(c) Investing in more research and development in the computer industry
(d) Don’t know.
While
36% of adults and 33% of students understood that:
17.
When governments supply products and services, these products and
services usually benefit: (Standard 16)
(a) More than one person at
a time whether they have paid for them or not
(b) Only the people who pay for these products and services
(c) Business at the expense of consumers
(d) Don’t know.
Four
out of five adults and three out of five students correctly answered:
18.
If the United States stopped importing automobiles from Country X, who
would be most likely to benefit? (Standard 17)
(a) Automobile manufacturers
in Country X
(b) Consumers in the United States
(c) Automobile manufacturers in the United States
(d) Don’t know.
However,
only 29% of adults and 21% of students know:
19.
If the gross domestic product of the United States has increased, but the
production of goods has remained the same, then the production of services has:
(Standard 18)
(a) Increased
(b) Decreased
(c) Remained the same
(d) Don’t know.
Finally,
just over half (54%) of the adult population and one quarter (23%) of the
students knew:
20.
When the federal government’s expenditures for a year are greater than
its revenue for that year, the difference is known as: (Standard 20)
(a) The national debt
(b) A budget deficit
(c) A budget surplus
(d) Don’t know.
So
how did you score? (See the answers here.) On average, adults get a grade of 57% for their overall
knowledge of basic economics.
High school students across America receive an average grade of 48% for
their understanding of the basic concepts embodied in the Standards established
by the National Council.
While there is a long way to go to achieving a desirable level of
economic literacy in America, there is more reason for hope than despair.
Americans are receptive to economic education .
Further, economic education appears to make a real difference in
peoples’ understanding of basic economics.
The challenge ahead, therefore, lies in educating more of America’s
students about economics so that they will be equipped with a set of skills
essential for life in the 21st century.
Call for
Entries National Teaching Awards
Back
The Nasdaq Educational Foundation National
Teaching Awards, a program of the National Council on Economic Education, was
designed to foster economic awareness in America by recognizing teachers that
are helping students to think, make good decisions and function well in the
economy.
Regional and national awards will be presented to
high school teachers for their most creative, original, and effectual efforts to
further economic awareness. Each
year you will have the opportunity to be recognized regionally and nationally,
and to take home the following cash awards:
| Grand National Winner |
$25,000
(which includes his/her
$10,000 Regional Award)
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| Five Regional Winners |
$10,000 each |
| Twenty Regional
Semi-Finalists |
$ 1,000
each |
The deadline for this year’s entries is July 31,
1999. Applications are available
from the Council office. Call (414)
221-9400.
James
Flora Completes Ukrainian Study Tour
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New Holstein economics teacher, James Flora,
recently returned from Ukraine where he participated in a ten day economic
education study tour arranged by the National Council on Economic Education.
While in Ukraine, Mr. Flora visited ten schools in the cities of Kyiv,
Kharkiv and Dniepropetrovsk. He observed market-based economics classes being
taught to students ranging in age from seven to sixteen.
Mr. Flora also had the opportunity to teach a lesson on productivity to
an 11th grade class at a public school in Dniepropetrovsk.
When asked about his impressions of Ukraine and of
that country's education system, Mr. Flora stated, “I was amazed at the
enthusiasm for market economics shown both by the teachers and students.”
He also expressed surprise at the high proportion of Ukrainian students
who are fluent in the English language. At open question and answer sessions,
the Ukrainian students asked numerous questions about student life in American
schools and about economics classes taught in the U.S.
Mr. Flora brought back letters from more than fifty Ukrainian high school
students who would like to correspond with an American student.
Mr. Flora also indicated that he had the
opportunity to visit with several new Ukrainian entrepreneurs as well as
representatives of Ukrainian banks. All of these people expressed great optimism
about the possible economic future of Ukraine if people stay the course in their
difficult transition to a market system. Economic education of the population is
an important ingredient in this transition. According to Mr. Flora, people need
to learn about the importance of private property, the role of entrepreneurs,
the operation of markets, and the way in which incentives influence the
decisions of people if the transition to market is going to work in Ukraine.
The study tour was organized by the National
Council on Economic Education as part of the International Education Exchange
Program of the U.S. Department of Education.
Twelve U.S. economics teachers and professors participated in the trip,
which was hosted by the newly formed Ukrainian Council on Economic Education.
In addition to teaching at New Holstein High School, Mr. Flora also
serves as a Director of the Wisconsin Council on Economic Education.
EconomicsWisconsin
Wisconsin Council on Economic Education
7635 Bluemound Road, Suite 106
Milwaukee, WI 53203
(414) 221-9400
Fax (414) 221-9790
econed@economicswisconsin.org
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