Jump$tart

One of my clients is a now-retired High School math teacher. He bemoans the fact that when the students got to him in 11th grade, they simply were not prepared mathematically for the real world. They were barely able to balance a checkbook, a process using addition and subtraction skills that they should have mastered in about the 4th grade.

The news from the folks at the Jump$tart Coalition for Personal Financial Literacy is even worse. This is an organization dedicated to improving the financial literacy of our students. Quoting from their website at www.jumpstart.org , “…most simply have no insight into the basic survival principles involved with earning, spending, saving and investing.”

How do they know this? At a press conference at the Federal Reserve Board they announced the results of the 2005 Survey of over 5,000 High School Seniors. The results we abysmal with an average score of 52.4%, a huge increase from 52.3% in 2004. Having recently read Thomas Friedman’s The World is Flat , it is even scarier. Indian and Chinese schools are turning out engineers at an amazing clip and don’t have jobs for them. They can all do calculus, and our kids are having trouble with basic arithmetic! Which group is going to get the jobs this century?

This takes me back to the days when I used to manage a corrugated box factory and we had to teach new workers, many of whom were immigrants from Latin America, how to use a tape measure. They had to learn what each of the 16 lines in an inch meant on a tape measure. After all, if you are going to make boxes the right size, you have to be able to measure and understand fractions. If one side of the box is supposed to be 18 3/8ths inches long, you have to be able to measure this.

I was certainly willing to cut these people a little slack. After all, English was a second language to many of them and they certainly didn’t have the same kind of educational opportunities that our citizens had. And at that point in time – the 1960’s – American employees didn’t have that trouble.

This worries me for a few reasons. First, I cannot believe that the financial arena is the only area in which they are deficient. They probably are just as bad a writing a paper or understanding history. I recall that one study showed that only about 30% of students could correctly identify the century in which the Civil War was fought. I think I got a good education when I went to school but these kind of statistics makes you wonder what those schools ARE teaching to these kids over the 13 years that they have them.

Second, I shudder to think how these people can find decent jobs. We can use only so many people in so-called “unskilled” jobs and there seem to be a huge number of immigrants willing to work harder than our children at those jobs and are happy with the lower income they get.

Third, I worry about how they will make financial choices when it is their turn to make decisions about saving versus consuming, choosing investment, saving for and buying a home, and doing retirement planning. A common theme of my articles is that people are not able to make rational financial decisions for themselves, in part because they don’t understand the concepts and because they are often unable to make the calculations necessary to get the right answers. Based upon these tests, the future is indeed bleak

I know that my readers are financially more sophisticated than High School Seniors, but I would be interested in knowing how all of you do on the test. It takes about 15 minutes to complete. You can find the test at The answer sheet is linked at that page so you can check your score.

Send your score to me in an e-mail to w6sj@hotmail.com and I’ll let you know the overall results in a follow-up article.