A national policy and advocacy organization has revealed one of the hidden costs of our city’s high drop-out rate.
Their findings form a pyramid of failure and missed economic opportunity. At the top, are the nearly 10,000 students who did not graduate with their class. The middle tier is made up of the hundreds of thousands of dollars dropouts lose in decreased wages. At the bottom are the millions in lost tax revenue.
The Alliance for Excellent Education (AEE) reports that 9,685 Baltimore area students from the Class of 2008 dropped out of school. These students did so at a great cost not only to themselves but also to their communities. The organization asserts that reducing the number of dropouts by 50 percent for just this single high school class would result in tremendous economic benefits to the Baltimore region.
The following are three examples of the economic impact that these new graduates would have on Baltimore and its surrounding area:
1. Increased Wages. By earning their diplomas—and in many cases, continuing their education—these new high school graduates would together earn over $77 million in additional wages over the course of an average year compared to their likely earnings without a diploma.
2. Increased Human Capital. After earning their high school diplomas, many new graduates would not stop there. An estimated 68 percent of these students are projected to continue their education after high school, some earning as high as a PhD or other professional degree.
3. Additional Tax Revenue. As these new graduates’ incomes grow, local tax revenues will also increase. Annual state and local property, income, and sales tax revenue would grow by nearly $12 million during the average year as the result of increased spending and higher salaries.
Baltimore’s high drop-out rate contributes to a nationwide problem that adds a fourth dimension to that pyramid of lost economic opportunity. This bottom level can be measured in the billions of dollars: nearly 600,000 students dropped out of the high school class of 2008 in the nation's fifty largest cities and the surrounding areas.
The Alliance's research shows that, if half of those students had graduated, on average, they would have earned more than $4.1 billion in additional income every year. "In these lean economic times, local businesses and governments are looking for any way they can to improve their financial situation," said Alliance for Excellent Education President Bob Wise.
"These numbers demonstrate clearly that every consumer, business, and taxpayer benefits dramatically when we do what it takes to increase the number of students who graduate from high school with the skills they need to succeed in life. Indeed, the best economic stimulus is a high school diploma."
Based in Washington, D.C., the Alliance for Excellent Education works to make every child a high school graduate - to prepare them for college, work, and to be contributing members of society. Their mission is “to promote high school transformation to make it possible for every child to graduate prepared for post-secondary learning and success in life.”
Founded in 2001, the Alliance focuses on America's six million most at-risk secondary school students - those in the lowest achievement quartile - who are most likely to leave school without a diploma or to graduate unprepared for a productive future.
Jayne Matthews is a higher education development analyst and academic advocate. Education Matters because “only the educated are free”. Your thoughts and comments are welcomed at
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Their findings form a pyramid of failure and missed economic opportunity. At the top, are the nearly 10,000 students who did not graduate with their class. The middle tier is made up of the hundreds of thousands of dollars dropouts lose in decreased wages. At the bottom are the millions in lost tax revenue. 
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