Printer Friendly

Economic literacy: a goal not yet accomplished.


One of the most important questions facing the future of the business community in South Dakota is whether or not today's students are being prepared to be tomorrow's leaders. The increased complexity and globalization of the U. S. economy is placing increasing demands on teachers as they strive to prepare students to become qualified employees, knowledgeable consumers and informed voters.

Familiarity with only selected aspects of the local community is not sufficient to cope with the complex problems encountered in today's society nor is it enough to maintain a participatory government in an ever-changing world. Students need a reasoned approach to life in order to distinguish "fact" from "trivia", to establish goals and priorities and to practically solve the mysteries of the marketplace. An effective economic education program uses economic data and observations to provide a framework for examining how individuals behave in the marketplace. This approach teaches students to apply economic principles to real life situations and, in fact, teaches them to THINK in an effective manner about events that impact their lives now and in the future.

The process of economic reasoning is founded on basic economic principles and concepts such as scarcity, supply, demand, profit and cost, and is used to understand the whys" and "hows" of the marketplace. Wentworth and Leonard (1986) describe the reasoning process as using important economic assumptions in a logical sequence to deduce and forecast human behavior. It also provides students with the tools for making knowledgeable decisions, thus improving their analytical abilities and levels of satisfaction. Furthermore, economic reasoning encourages students to focus on both the short-term and the long-term consequences of all feasible alternatives derived through the decision-making process.

In addition, Morton and Reinke (1990) suggest that students armed with an economic reasoning perspective can improve their ability to: * show curiosity about and understanding of economic issues and events: * evaluate the present and future costs and benefits of alternative courses of action; * approach complex issues with confidence and careful analysis; * accept individual responsibility; * predict economic changes and adjust to them; and * understand that everyone has choices and those choices have powerful influences on our lives.

Research indicates that a need for more economic literacy exists among high school students. A recent study found juniors and seniors in high school to be lacking in their understanding of basic concepts in both micro and macroeconomics (Walstad and Soper, 1988). In fact, students showed little knowledge of the fundamentals of economics such as scarcity, opportunity costs, trade-offs and productivity. These concepts and principles are the basis of sound decision-making in any aspect of life, whether personal or business-related. Since economic reasoning uses the premise that all persons must make choices and all choices involve costs, students without an understanding of these fundamental economic principles are not prepared to make

the necessary decisions required to function in the complexities of today's marketplace.

On a more positive side, students did indicate some understanding of economic systems. economic incentives and institutions, and money and exchange. Walstad and Soper conclude these topics were probably covered in earlier grades and through experience, which indicates the value of prior instruction and parental involvement in the educational process.

In the area of microeconomics, the researchers found that students demonstrated some knowledge of supply, demand and market structure while lacking an understanding of market failures and the economic role of government. Discernment on topics such as these are important in maintaining a free enterprise system because of their direct correlation to economic and societal problems. The ability to understand and articulate the relationship of these concepts to issues such as welfare programs, farm policies and environmental problems will expose students to the irresponsibilities as citizens in a democracy. Incorporating economic reasoning into these discussions helps unlock the mysteries of a complex society and simply improve our quality of life.

Walstad and Soper also found that students do not have sufficient economic knowledge to understand current events, which are predominately macroeconomic issues. The only macro items which students understood relatively well were gross national product and unemployment. Topics such as inflation, monetary policy and fiscal policy had the lowest level of understanding. If young people lack the ability to comprehend the impact of these concepts, it will significantly impair their critical thinking skills on public policy issues. This conclusion suggests that within a participatory democracy, our voters and representatives are less than qualified to seek possible solutions to perplexing problems.

Students tested also faired poorly on all issues related to international economics. The study found that student understanding of comparative advantage, balance of trade, exchange rates and economic were low. With the increasing importance of international trade, especially in farm commodities, this area of economics should be a critical component of South Dakota's high school curriculum. How can we expect to compete in a global economy if we have no basis for understanding it?

By using economic reasoning, students can develop a rational process to see the interdependence and the logical consequences of participating in an international market rather than attempting to grasp intangible concepts. Unless teachers can assist students in understanding the relationship between the international market and their Midwestern lifestyles, the idea of a global economy will remain elusive and vague. Once again, the instruction of international topics, as well as other areas of economics, can be enhanced and improved by using the economic reasoning paradigm.

Walstad and Soper (1989) speculate that many international topics, including the reasoning perspective, are not taught or are poorly taught in the nation's classrooms because teachers lack both the confidence and a sufficient understanding of these issues and procedures. The same may be true of other gaps in economic understanding.

South Dakota has recognized the need for an economically literate citizenry. It currently has a mandate for economic literacy through education, which reads, All public and non-public schools shall provide instruction on the essentials and benefits of the free enterprise system." However, a study by the LJSD School of Education in cooperation with the South Dakota Council on Economic Education (SDCEE) found that time allocated to general social studies - the standard location for economic education - is declining in South Dakota schools and is less than time allocated to social studies in other states. The study also indicated that social studies was not a priority subject in elementary schools, with principals ranking it low among their schools' priorities.

Furthermore, the study found that economics as a social studies receives little or no attention at any of the elementary grade levels. The underlying assumption for this finding was that elementary educators believed students were unable to understand the subject. Schug and Armento (1985), however, report that elementary students are capable of economic reasoning and are developing basic economic understanding. Numerous studies in elementary education have supported young children's ability to learn and use economic concepts and principles in a logical, practical manner.

With South Dakota lagging behind other states in the social studies and economic education of its young children, the prospects for enhancing our level of literacy in these areas, building an aggressive economic development infrastructure through education and preparing future leaders seems dismal. Who will assume the responsibility of producing a quality workforce and informed citizens? Who will lead our state in the next century? Who will understand the opportunities and responsibilities inherent within a market economy structure?

Attempts are now being made to integrate economics and economic reasoning into the social studies curriculum, often referred to as the "infusion" approach. While these efforts have some degree of success, research has found that students do not learn as much economics through this approach as those students taking a separate economics course (Walstad and Soper, 1988). The researchers found that about one-third of the social studies teachers who are teaching courses in government or U. S. history are not taking advantage of the economic education potential their respective disciplines provide. The other two-thirds of the teachers are providing some economics instruction, but only on selected concepts. Opportunities such as this need to be highlighted and teachers infusing more economics into their subject areas need to be recognized.

SDCEE maintains the philosophy that the infusion approach is essential within the elementary and middle school curriculum, with a separate capstone course in the high schools. This combination approach culminates the students K-12 exposure to economic education activities and allows teachers to build upon the basic principles as the students' learning abilities become more sophisticated.

Since some students may receive little or no instruction in economic concepts if they happen to take a social studies class, the researchers conclude that the only reliable way of ensuring that all students learn economic concepts and practice economic reasoning is by taking an economics course. This option, of course, is not without problems as well. School districts and classroom teachers are bombarded with courses and content that must be fit into an already crammed schedule. Additionally, unless teachers themselves have a sufficient background in economics and economic reasoning, they may eliminate some topics or not cover others adequately.

As with any instructional effort, the most significant variable in students' ability to learn economics and practice economic reasoning is the classroom teacher. Students with teachers who are familiar with economics and have had formal training in methods of economic education tend to have a better economic understanding than those with teachers who have little or no formal training in economics (Walstad and Soper, 1989).

These findings may account for the lack of economic understanding gained in the "infusion" approach. It does suggest, however, the increased need for improving teacher knowledge and confidence in teaching economics, both within the integrated framework and the separate high school course. If teachers are to be successful in preparing future citizens. they also need to be "armed" with useable materials and trained in the dissemination of the information.

SDCEE's mission is to meet this enormous need by working with teachers throughout the state to improve their level of economic literacy, to help them practice economic reasoning and to provide them with resources for effectively teaching economic concepts. Teacher training programs range from awareness workshops to graduate-level instruction. In addition, the Council's network of lending libraries contains more than 500 resources for South Dakota educators. Materials in the libraries range from films and videos to simulations and games to printed materials. Teachers and other community members also enjoy and learn from economic issues forums and the biannual newsletter, sponsored by the Council.

Currently, the Council is organized with two fully active centers (USD in Vermillion and Augustana College in Sioux Falls), two resource centers (Rapid City and Brookings) and five working regional hubs" across the state. The Council's goal is to expand those hubs to a total of twelve, thereby increasing the opportunities for teachers to participate in Council activities. This "hub and spoke" structure provides the Council with the efficient delivery system and easy teacher access. As the delivery system expands, every South Dakota student will be empowered with the ability to think economically.

SDCEE is a non-profit organization housed in the USD School of Business and relies on private donations to support its programs. Persons interested in learning more about SDCEE may contact Drs. Jerry Johnson, Dean, USD School of Business; Robert Reinke, Associate Dean, USD School of Business or Sue Lynn Sasser, Director of the Henry T. Quinn Center for Economic Education, USD School of Business.

Economic education can improve the quality of life in South Dakota by providing our future citizenry with the tools necessary to take full advantage of the opportunities of the marketplace and understanding the economic behavior of those in the world around them. SDCEE will continue to promote economic literacy through the teaching and fostering of economic reasoning. These efforts will continue to expand our investment in our human capital, thus promoting the growth and economic development of our state. REFERENCES Morton, John and Reinke, Robert W. "Why Teach About the American Economy?", Social

Education, February 1990. Schug. Mark C. and Armento, Beverly J. "Teaching Economics to Children" in

in the School Curriculum, pp 33-43. New York: Joint Council on Economic Education

and National Education Association, 1995. Walstad, William B. and Soper, John C. "What is High School Economic,? TEL Revision

and Pretest Findings,"

Journal of Economic Education, Winter 1988

"What is High School Economics? Posttest Knowledge. Attitudes. and Course

Content," Journal of Economic Education, Winter, 1988.

"What is High School Economics? Factors Contributing to Student Achievement and

Attitudes," Journal of Economic Education, Winter 1989. Wentworth. Donald R. and Leonard. Kenneth E. 4Economic Reasoning: A Framework for

Teaching," Curriculum Review, November-December 1986. World, Robert W. et al. "Status of Social Studies Education in South Dakota Elementary

School,." unpublished. July 1989. About the Authors: Robert W. Reinke, Ph.D. is the associate dean of the University of South Dakota School of Business and Executive Director of the South Dakota Council on Economic Education. Sue Lynn Sasser, Ph.D. is assistant professor of Economics and Director of the Center for Economic Education at the University of South Dakota School of Business.
COPYRIGHT 1991 The Business Research Bureau
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Reinke, Robert; Sasser, Sue Lunn
Publication:South Dakota Business Review
Date:Mar 1, 1991
Previous Article:South Dakota state aid to education.
Next Article:School finance policy: a legal perspective.

Related Articles
Law and literacy: plain language partners.
Literacy and Empowerment: An Indian Scenario.
Joining faith and finance.
Valuable lessons: teaching kids about money and credit.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters