Only 9.4 percent of U.S. students performed at the “highest level,” which is similar to the average of 9.7 percent across OECD countries. “These top performers can look ahead to solve financial problems or make the kinds of financial decisions that will be only relevant to them in the future,” explained the OECD. “They can take into account features of financial documents that are significant but unstated or not immediately evident, such as transaction costs, and can describe the potential outcomes of financial decisions.”
But why is nine percent financial literacy troubling? Shannon Schuyler, Partner and U.S. Leader for Corporate Responsibility, PwC, has some thoughts.
Schuyler, who led PwC’s launch of Earn Your Future (EYF) in 2012, a commitment to invest $160 million in cash donations and volunteer hours to youth education through 2.5 million students and educators over five years, says the worry starts with the aging population.
“It’s interesting to see, in these megatrends, what demographics are showing us: By 2050….22% of the world’s population will be age 60 or older. (Source: UN Department of Economic and Social Affairs, Population Division, Population Ageing and Development 2012, 2012), leaving a large gap in skilled jobs—a gap that many companies are nervous about filling due to concerns about student skills,” she explained.
Schuyler noted that knowing financial skills isn’t just about balancing a checkbook, it’s about using critical thinking skills to analyze and solve a problem.
“What the lack of financial literacy shows us is that students don’t just lack personal finance skills, it’s also lack of mathematics, critical thinking and reading comprehension,” she emphasized. “There’s a large correlation to math and reading in the U.S., more so than in other countries, which means that not only should students have better math and reading skills, financial literacy can be a major way to teach those math and reading comprehension skills.”
Outside of business concerns and the lack of skilled workers, another major concern is that financial literacy isn’t required in schools and colleges as part of the curriculum, which, explained Schuyler, is due in part because no one talks about personal finances.
“While the vision is to have a great curriculum that can be taught and assessed in schools, a general curriculum has yet to be designed, and most teachers don’t have the skills necessary to teach financial literacy,” she said. “This is partly because it’s considered taboo in our society to talk about personal finances, so kids aren’t talking about it with their parents, and teachers aren’t talking about it in their training. Businesses and teacher colleges can step up to help educate teachers.”
(Next page: Why this affects higher ed)
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