Goldin and Katz describe a race between technology and education. The pace of technological change has been surprisingly steady. In periods when educational progress outpaces this change, inequality narrows. The market is flooded with skilled workers, so their wages rise modestly. In periods, like the current one, when educational progress lags behind technological change, inequality widens. The relatively few skilled workers command higher prices, while the many unskilled ones have little bargaining power.

The meticulous research of Goldin and Katz is complemented by a report from James Heckman of the University of Chicago. Using his own research, Heckman also concludes that high school graduation rates peaked in the U.S. in the late 1960s, at about 80 percent. Since then they have declined.

In "Schools, Skills and Synapses," Heckman probes the sources of that decline. It's not falling school quality, he argues. Nor is it primarily a shortage of funding or rising college tuition costs. Instead, Heckman directs attention at family environments, which have deteriorated over the past 40 years.

Heckman points out that big gaps in educational attainment are present at age 5. Some children are bathed in an atmosphere that promotes human capital development and, increasingly, more are not. By 5, it is possible to predict, with depressing accuracy, who will complete high school and college and who won't.

It's not globalization or immigration or computers per se that widen inequality. It's the skills gap. Boosting educational attainment at the bottom is more promising than trying to reorganize the global economy.

America rose because it got more out of its own people than other nations. That stopped in 1970.

Texas is changing. It is growing older and browner, with the elderly and Hispanic populations growing at an unprecedented rate. And as the populations increase, so will the challenges.

If current trends continue, Texas' work force will be less educated and less skilled. State services, already burdened, may be strained to a point never experienced before. The numbers provided by Murdock support the dire warnings:

Hispanics may represent 53 percent of the population by 2030, compared to 30.3 percent for Anglos and 9.2 percent for blacks.

More than half of Hispanics 25 and older had failed to finish high school in 2000; fewer than 20 percent had completed some college, and only about 10 percent had a college degree.

Hispanics could occupy 38 percent to 52 percent of the Texas work force by 2030.

By 2030, 16 percent to 20 percent of the population will be 65 or older, an increase of about 10 percent over 2000. Most will be Anglos. Of Texans older than 65 in 2000, 72.6 percent were Anglo, 16.7 percent Hispanic.

The aging population - coupled with a segment that is less educated and, thus, earning less money - will strain social services, including those for the elderly.

"An educated work force raises income levels, which generates businesses activity and increases the market for goods and services," Murdock said. "It also increases investments for new businesses, which in turn increases tax revenues. Higher education equals higher incomes."

Sen. Pete Gallego, D-Alpine, said education is perhaps the most important issue facing the state.

"This is really a wake-up call," he said. "The conclusion is that by the year 2025, if we keep doing what we're doing now, Texas will have the economy of a Third Word country. I have a son who will be 21 in 2025, and that's just not the kind of Texas I want to turn over to him."

Germany is something of an oddity in this. In most countries with low fertility, young women have their first child late, and stop at one. In Germany, women with children often have two or three. But many have none at all.