what can be done to improve struggling high schools? ” journal of economic perspectives, spring 2013, vol. 27, no. 2, pp. 133 – 152. for example, see caroline m. hoxby and sarah turner, “ informing students about their college options : a proposal for broadening the expanding college opportunities project, ” hamilton project discussion paper, june 2013 ; and scott e. carrell and bruce sacerdote, “ late interventions matter too : the case of college coaching new hampshire, ” national bureau of economic research working paper no. 19031, may 2013. james heckman, “ schools, skills, and synapses, ” economic inquiry, july 2008, vol. 46, no. 3, pp. 289 – 324. bis central bankers ’ speeches furniture and textile manufacturing to provide well - paying jobs, but advances in global transportation and shipping facilitated the movement of much of that activity overseas. and while there has been a resurgence in manufacturing in the state, the new advanced manufacturing techniques require far fewer workers. today, there are only about half as many people employed in manufacturing in north carolina as there were in 1990, even though the value of the goods produced has increased – a story that is true nationwide as well. more broadly, while technological innovation may increase the demand for some types of workers, it often reduces the demand for others – even, sometimes, for skilled workers, as occurred during the 1800s when new production techniques displaced glassblowers, shoemakers, bakers and other artisans. 13 more recently, computers have not been a boon for everyone. many lower - skilled workers have been replaced by machines, and an increasing number of middle - skill workers, such as tax preparers and paralegals, also are vulnerable to automation. but the technological displacement of workers has been part and parcel of rising living standards for centuries. in 1900, more than 40 percent of the u. s. workforce worked in agriculture ; today, that number is less than 2 percent. just as technology reduced the need for farm labor, it also allowed the creation of new jobs in new sectors, and i don ’ t think any of us would argue that we would be better off if nearly half our population was employed to supply our caloric needs, rather than being free to work as engineers or truck drivers or nurses. we must understand the needs of the workers who are displaced and recognize that adjusting to evolving circumstances takes time, but history provides good reason to be optimistic that the

. preparing a skilled workforce you don ’ t need to be an economist to be concerned that we are not adequately preparing the next generation of workers. nationwide, about 20 percent of high school students fail to graduate within four years, and there are significant disparities in graduation rates between white students and black or hispanic students, and between students from high - income and low - income families. in some large urban school districts, as many as 40 percent of students do not graduate in four years. a growing share of those who do complete high school now go on to college. but far too many of these students fail to earn a degree : nationally, the college dropout rate is around 40 percent. 6 the benefits of attending college for a few semesters without graduating are relatively small. the unemployment rate for workers with some college education but no degree is comparable to the rate for workers with only a high school degree. and while students who have attended some college do earn on average about 15 percent more than high school graduates, this pales in comparison with the average earnings of those who have completed bachelor ’ s degrees. there is also substantial anecdotal evidence that employers are having difficulty finding workers with the right skills. this is a common refrain on our visits to communities throughout the region, and it ’ s supported by employer surveys. for example, 75 percent of manufacturers reported a moderate to severe shortage of skilled workers, such as welders, who must have strong math skills and be able to read blueprints. 7 there is an ongoing debate among researchers about the actual amount of “ skill mismatch ” in the labor market, 8 but many employers certainly seem to perceive that such mismatch is real. the key question is what can we do to increase the supply of skilled workers? the large increase in the college premium has led many policymakers and educators to advocate college for all. but as the high college dropout rate indicates, there is a big difference between enrolling in college and graduating. during focus group meetings held recently in virginia by the richmond fed, representatives from four - year colleges and community colleges shared that many students are surprised to discover they lack the basic math skills necessary for college - level work. if students overestimate their readiness for college, they may be more likely to enroll in college but then drop out after they get there. that can be a costly lesson to learn ; the average debt burden among college dropouts who took out loans is more than $ 14