Literacy is essential to many daily activities, and its importance to individual well-being can hardly be overstated. In an era of workforce shortages, it is rapidly becoming an economic imperative.
The Program for the International Assessment of Adult Competencies (PIAAC) defines five levels of proficiency. Adults who are “Below Level 1” can, at best, read brief texts on familiar topics and locate a piece of specific information, with only basic vocabulary knowledge required. Levels 3 and above allow greater comprehension and application and are generally consistent with being able to perform some type of technical or professional labor.
Currently, 28% of Texans have very limited skills (at or below Level 1) compared to 22% for the United States. Rates are substantially higher in parts of the state, with some counties having as much as 70% of the adult population at or below Level 1. For these individuals, it can be difficult to navigate daily life, much less obtain a well-paying job.
The proportion with literacy skills at or above Level 3 is 40% in Texas, significantly below the national rate of 48%. Such skill sets are virtually nonexistent in some counties, while others have over 60% of residents with Level 3 or higher literacy. Simply stated, 60% of Texas adults lack the basic capacity to be part of the state’s skilled workforce. Literacy rates in Texas are also well below those in many of the most competitive states for quality corporate locations and expansions. With the increasing need for skilled workers, this deficit will become increasingly detrimental in the years to come.
Insufficient workers with Level 3 literacy can slow economic growth; overall earnings and related business activity are also reduced. We estimate that, when multiplier effects are considered, the total economic cost to Texas of the shortfall in adults with Level 3 literacy in 2020 includes -$16.4 billion in annual gross product and -186,000 jobs. Without intervention, these losses are projected to rise to -$67.5 billion in annual gross product and -766,000 jobs by 2050.
If Texas achieved a Level 3 concentration equivalent to that of the nation as a whole by 2040, the economic benefits would include $15.3 billion in annual gross product and 174,000 jobs. If outcomes on par with those of the five best-performing states were attained, gains rise to $41.1 billion in yearly output and 465,800 jobs. These enhancements escalate over time.
Improving literacy would enhance the quality of life and opportunities for those directly affected while simultaneously increasing productivity and economic activity. Many jobs require proficiency, strong demand is expected in the future, and improving skills in this area will better position Texas to meet expanding workforce needs. Let’s do it! Stay safe!
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 2,500 clients over the past four decades.