The Long-Term Economic Value Of Elementary School Reading Programs

A Statistical Analysis Of Average Salary Levels And The Average Reading Levels For The 1,000 Most Common Occupations

(The More You Can Learn...The More You Can Earn)

As the nation struggles to recover from the long-term economic effects caused by the Covid-19 pandemic, many leaders are looking for solutions that will provide long-term economic benefits for our national economy.

Consumer spending is currently the foundation of our economy. Consumer spending accounts for 70% of our economy. Therefore, long-term economic growth requires that large numbers of workers have salary levels that will allow them to continue to purchase goods and services. In addition, government programs can only function when there is sufficient tax revenue or borrowing. The current level of government spending is only sustainable if workers have sufficient salary levels to pay the taxes necessary to support the current government programs.

We analyzed the factors that impact salary levels for the 1,000 most common occupations in the United States. We found a strong correlation between the average salary that employers are currently paying their employees for each occupation and the average reading level expected for that occupation.

Since we also wanted to analyze the wage gap between workers having the lowest reading levels (bottom 10%) compared to workers with the highest reading levels (top 10%), the occupations were arranged into 10 groups (deciles) based on the reading levels employers expected for workers hired for each position.

The average salary level and average reading level were also graphed for each of those 10 groups.

The chart clearly shows a strong positive relationship between average reading levels and average salary levels. The actual relationship is even stronger at the upper end (10th decile) than shown in the chart because highly compensated employees have access to other financial payments beyond their salary. For example, Jeff Bezos has a salary level of $81,840, but has a multi-billion dollar compensation package including company stock and other non-salary compensation.

At the lower end (1st decile), the average salary level is much higher than expected, based on the average reading levels. A large number of occupations in this group have salary levels that are negotiated by minimum wage regulations or collective bargaining agreements, rather than by the employers. Unfortunately, a large number of these jobs will be eliminated as a result of the Covid-19 pandemic. Employers are now purchasing robots to automate those tasks. As workers are replaced by technology, the gap between salary levels and reading levels for the lower end of the chart (1st decile) will soon close.

So what is the value of a teacher, reading specialist, or volunteer reading tutor/mentor helping a student improve their reading level by one standard deviation?

The linear regression calculation shows a positive economic value of $23,169 in additional yearly salary for each student. When we calculate the long-term value of these reading gains over a 45 year career the cumulative value is approximately one million dollars. The actual value is much higher, especially when inflation and annual salary increases for the employees are included. The long-term effects of compound interest creates an exponential financial growth between $5,324,000 and $11,290,000 using historical rates of return, inflation levels, and historical savings rates for higher salary levels. Higher salary employees also have higher savings rates, so they receive the most benefits from financial compounding effects.

Several negative factors must also be included for a more accurate estimate. That calculation will be included in another paper.

Since employees that have higher salary levels also have more disposable income to spend on products and services, the long-term health of our national economy is now in the hands of our teachers, reading specialists, and volunteer reading tutors/mentors.

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