The Hawaii Council on Economic Education (the Council) is an independent, nonpartisan, nonprofit, 501(c)3 educational organization whose mission is to promote and improve the teaching of economics in Hawaii's public and private schools and increase the economic and financial literacy of Hawaii's students and residents. The Council is a statewide partnership of business, labor and education (See Appendix A).

The Council wishes to express its concerns over the proposed changes to the high school graduation requirements reducing social studies credits from four to three. This reduction will greatly affect the future of economic education in our schools - an important but often overlooked discipline that is essential for a knowledgeable high school graduate.

The Hawaii Council on Economic Education supports the continued graduation requirement of four social studies credits. When economics is offered in schools, it is an elective to fulfill the current social studies credit. Eliminating the fourth social studies credit will not only reduce the incentive for schools to offer economics, it will also reduce the opportunity for students to take a stand-alone economics course.

Economics is vital to the well-balanced education that all Hawaii students deserve. James Tobin, 1981 Nobel Laureate, said, "High school graduates will be making economic choices all their lives, as breadwinners and consumers, as citizens and voters. A wide range of people will bombard them with economic information and misinformation for their entire lives. They will need some capacity for critical judgment."

Economics is the science of decision-making. It is a study of alternatives and priorities, of choosing how to allocate limited resources among unlimited wants. An understanding of economics gives graduating seniors the critical thinking skills necessary to function as informed consumers, producers and citizens.

Knowledge of economics fosters civic engagement that impacts the choices residents make. With ongoing lament about the apathy in our voting population, restoring broad-based civic engagement is critical to the health of our community. Alice M. Rivlin, former Vice Chair, Board of Governors of the Federal Reserve System emphasized this need. "Without a basic understanding of how the economy works, what the essential terms and concepts are, the average citizen is likely to feel completely left out of any conversation, whether in the media or around the water cooler, about what is happening in the economy and what to do about it."

Enrollment in economics classes is already declining. In 2001-2002, twenty-seven percent (27%) of Hawaii's public high school seniors enrolled in an economics course. This is down from 49% in the 1998-1999 school year. Too many of Hawaii's seniors are graduating with little or no understanding of the forces that affect them daily, and diminish their ability to identify and evaluate the consequences of private decisions and public policies.

This is a frightening thought. According to the State of Hawaii Department of Business, Economic Development and Tourism, bankruptcy filings in Hawaii grew from fewer than 400 in the first quarter of 1994 to over 1,000 in the second quarter of 2003. It is essential, now more than ever, that a Hawaii public school student graduate with a firm grasp of economic and financial concepts enabling them to make better career and business choices.

Hawaii is not prepared to integrate economics into the proposed social studies curriculum. Hawaii's secondary social studies teachers are only required to take six credits of economics - far less education than is required to understand how to effectively weave economics into the current social studies curriculum. Teachers need to have a solid understanding of economics and know how to access resources if they are to successfully and effectively teach economic principles in their classrooms. Teachers without a complete understanding of economic concepts will view the teaching of economics as a burden.

The likelihood of economics being tested in the near future is slim. Hawaii, along with 48 other states, includes economics in its content standards; however, while it is required that the standards be implemented, Hawaii does not require that economics courses be offered to students (much less that such courses be mandatory).

If teachers are not preparing their students for testing and they are uncomfortable with the content, the likelihood that economics will be taught effectively within the social studies curriculum will be reduced despite the few content standards outlined by the state.

The National Assessment of Educational Progress in economics is scheduled for 2006. Since 1969, the National Assessment of Educational Progress (NAEP) has provided information on the achievement of students at the elementary, junior high, and high school levels in the United States in selected subject areas. Commonly known as "The Nation's Report Card," the NAEP assessments on student achievement have been used to inform policymakers about the academic performance of American students and, in turn, improve students' educational experiences.

In 1997, the National Assessment Governing Board (NAGB) adopted a 10-year schedule for NAEP assessments that included a national-level economics assessment for twelfth grade students -- representing an important step in recognizing economics as a core subject for American students.

We all want our students to have a well-rounded, empowering education. The proposed modifications outlined by the Graduation Requirements Task Force threaten the existence of economics, a course that develops critical thinking and decision-making skills - disciplines that are imperative to the balanced education that all Hawaii students deserve.