“Dire” is one adjective that Linda Katz, founder and executive director of Children’s Literacy Initiative (CLI), uses to describe the U.S. education system, which is leaving an increasingly high number of children without adequate reading and writing skills. For more than 20 years, CLI has been working with school systems across the country to overhaul how teachers are trained, hired and mentored. In an interview with Knowledge at Wharton, Katz discusses not only why classroom teaching is broken and what can be done about it, but also the secret to helping kids learn to love reading. As she puts it: “I’m not trying to change the parenting of America. But I can change the teaching practices of kindergarten, first- and second-grade teachers.”

An edited transcript of the conversation follows.

Knowledge at Wharton: CLI works closely with children, and your goal is to close the gap in literacy between disadvantaged children and their more affluent peers, as your website says. Could you explain the nature of the problem?

Linda Katz: We work with teachers, and that is the nature of the problem. We have under-invested in training teachers. We have under-invested in figuring out how to hire good teachers. We have not looked at the kind of workplace they are in. And we keep coming up with the wrong solutions to fixing the huge problems in a broken human capital chain. We work with providing professional development for practicing teachers. We are working on what are called “pipeline issues” of how you get trained to be a teacher. We try to speak up as much as we can about certification, tenure and other issues that affect this whole broken chain. We try, above all, to make the point that the problems we are facing in this country are fairly dire.

And it’s not just me saying they are fairly dire. It is the United States Army. They have just issued a report saying that education in this country has become an imminent and menacing threat to national security. Why do they say that? Because in the 17-to-24 age group, 21% of our youth cannot pass the reading test to get into the Army. I’m not talking about the Air Force or the Seals. The Army. Another 21% have to be waived in — their credentials and ability to pass reading tests are not so hot.

Knowledge at Wharton: Why is the system broken?

Katz: The system is broken because we have been blaming teachers and not teaching. Other countries, like Finland and Japan, have looked very closely at teaching. In this country, there is the belief that you come in as magical Mary Poppins from nowhere and it’s all good, or not. Either way, there is nothing that can be done. We haven’t recognized that there are standards of practice for instruction — not instructors. This country just went through 15 to 20 years of war between people who advocated phonics only and people who advocated comprehension only. Can you imagine? What was that all about? Obviously you need both. But we were so far apart because we have not developed a good idea of effective practices.

Knowledge at Wharton: What would you say is the cost to the U.S. economy of having an education system that is so riddled with problems?

Katz: McKinsey, I think, did a study and said it was billions of dollars. In Philadelphia alone, we have hundreds of millions of dollars of lost wages. Before the recession started, we had what you might call structural unemployment closing in on 40% — 40% of adults in Philadelphia were not looking for work and were not working. I’m talking about people who weren’t home with children or in prison or in the Army overseas. Then the recession happened. Can you imagine what this is costing this region?

Knowledge at Wharton: Over the years, there have been numerous efforts at school reform. How effective have these been?

Katz: The tide goes in and the tide goes out. I’ve been in this business 22 years. Our statistics are really good. We work with teachers and they do better…. We work with pre-kindergarten through third-grade teachers. If you work intensely with teachers, coach them and teach them very high standards of practice, the kids will more or less learn how to read. The reforms always miss the central question of how do we improve human capital.

If you look at any school’s budget, it is all salaries. That is what you can fix. Right? We know no reform can get into a classroom that bypasses teachers and the way they teach. But we have looked for [these reforms] everywhere….

We have looked at money. It’s as if teachers who are in the classroom day after day won’t teach everything they know how to teach until you give them more money. Give me another $1,000 and I’ll really teach kids how to read? We have looked at longer days, a longer week and a longer year to keep the kids in school. All we found is that we end up taking away the social skills children need to get along in this world and we burn out teachers. Teaching is a very demanding and difficult profession. To do it five or six days a week, 11 months a year is not a tenable career choice.

We keep looking at what we think the business solutions are. But businesses figured this out a long time ago. I have an MBA from Wharton. I know that businesses look at human capital. They look at who works in their firms. In education, we are rewarding A when we want B. We reward [teachers who] get Master’s degrees when we know there is not a shred of evidence that it changes the results of kids in the classroom. We could be saying to teachers, “Eat yogurt for a year and I’ll give you a raise.” It’s that trivial and yet we keep rewarding that. You get a higher salary by getting your Master’s. We want A and we reward B, and that’s something that we know about in business not to do.

Knowledge at Wharton: What is the gorilla in the room that everyone is ignoring?

Katz: We set the bar too low and we train too little. We are actually making a negative investment in teacher training. That happens because tuition more than covers all the costs of training a teacher. [Training] a teacher has become the “cash cow” of a university. The most important semester of training — which, by the way, should be two semesters — is the time you spend as a student teacher. You pay full tuition for that semester and you work full-time. But it costs the university under $500 for the faculty they send to supervise you. What that comes down to is a deal [in which the teacher trainee says,] “You give me a good grade and I won’t complain to the university bitterly that I have paid to have a little bit more than $500 worth of expert supervision.”

We place [undergraduate] students in classrooms with no metrics to decide what kind of classrooms they should be placed in. The classroom has what is called a cooperating teacher. So I am teaching first grade and I have been called a cooperating teacher. That means the university will send me student teachers. How did they decide I was a cooperating teacher? They didn’t. I was just there. They spend very little time investigating [the decision] and they use no metrics. They did not look at my instruction or my outcomes, but they sent me a student teacher. Then they didn’t train me. Again, what did you get for your tuition? You got at best a good placement, but nobody really knows for sure. At worst, you got to spend time watching a truly horrible teacher and keeping a notebook — one of our coaches told me she kept a notebook of what not to do.

If the universities make a lot of money in that semester and on teaching generally — a lot of the faculty are adjuncts so are low cost — the incentive is what? You don’t have to have an MBA to know that the incentive is to let everybody who wants to major in education major in education. We have set the bar at zero. That is not a good place to be if we think teaching is going to help us.

Knowledge at Wharton: In recent years, there have been various non-profit organizations [launched] like CLI or Teach for America. To what extent has this made a difference to the situation?

Katz: We are all entrepreneurs. We have all looked at different parts of that human capital chain. Children’s Literacy Initiative chooses to work within the structure of the school district because that’s where 97% of the students are. We have chosen to work with the people who want to be teachers, who have decided that’s their career….

I think 25% of the graduating class at Harvard tried to get into Teach for America — we think a lot of those people are not going to stay [in teaching] and are always going to have higher-paying options. I don’t know if we can sincerely say we are ever going to be willing to pay our teachers that [same amount of] money.

We should be willing to invest in [future teachers’] education. We should be willing to invest in their student teacher placement. We should be willing to change the hiring and supervision process. Some non-profits are looking at that. But a lot of non-profits think, “Let’s just hire people who don’t have any degree at all in education.” That’s just wrong.

We reformed the medical profession in the 1900s. The Flexner Report [in 1910] closed most of the medical schools. They required internships. You had to have a certified teaching hospital. All the things that we need to do [for the teaching profession]. But they didn’t say, “You don’t need to go to medical school.”

Now we are saying, “Let’s look outside.”… It isn’t really so much that we want to go outside the profession. We want the schools to stop taking everybody and diluting the quality of the faculty, and start making it a money loser. We want them to change the student teaching experience. Then we want the schools to be honest about how they hire and grant tenure.

By the way, I’m not opposed to tenure. Teachers are too much at the whim of angry parents, vocal parents or politicians, who could use the position for their brother-in-law’s sister-in-law’s niece. Tenure is good. It’s just the way we [grant] it has to be changed.

There just was an article in The Los Angeles Times that said only 2% of first-year teachers did not get tenure. Remember that when you get tenure, you are essentially hired for life. If you were a corporation and you knew you were hiring somebody for life, your interview process would really perk up and you would have some real metrics [to determine] who got tenure. You might review the metrics every five or ten years. They would be specific and fair metrics for the people who were being evaluated. We won’t do it. We just can’t. It’s easier to blame teachers who somehow are gaming the system constantly. Some of them are. But we haven’t really created a system so it’s [not] easy to do that.

You had no barrier to entry to be a major in education. Nobody looked at you in student teaching and said, “You are not going to make it.” Then you got hired and you got tenure. But in the process of hiring, nobody looked at you for more than an hour or something. They didn’t evaluate your instruction. I can’t imagine what GE would do if it thought it was hiring anybody for life. You probably would have to go live with somebody and they probably would have to observe how your brush your teeth. It would be astounding how much we would care. Then teachers are there for life and the only ones that leave [do so] because the working conditions are so horrible. The working conditions have gone from bad to horrible.

Knowledge at Wharton: How so?

Katz: First, there is the physical [part] in the cities — the over-heated rooms and the old buildings, not enough books and right materials, and too many kids per class — the kids have too many problems for the ratio. In the suburbs, where it’s not so horrible, [the teachers] are starting to feel the pressure of the testing culture due to the No Child Left Behind Act [of 2001], so their intellectual work is not valued and teachers have very little say. They are almost like Charlie Chaplin and the machine in the movie, Modern Times. They don’t have much say about what gets taught and when it gets taught. Their expertise is not valued. The curriculum always comes down from on high and it is very prescribed and more so every day because of the testing mania. If somebody were doing a good job on instruction, the kids would do pretty well on the tests, but not when the pressure is on and you are just a cog in the wheel. You don’t get to work with your colleagues very much, and people from the outside — the opinion leaders and policy makers who have absolutely no understanding [of teaching] and who have never been in a classroom — don’t know what you are talking about. Then there are the college graduates working in buildings that aren’t air-conditioned and have to bring their own pencils [to school]. And the pay is not great.

Knowledge at Wharton: Could you talk about how CLI has been trying to address these issues?

Katz: We’ve created what we call model classrooms. We go into a school and see a teacher who has good classroom management, is kind to the children and has a good work ethic. [These are people who] want to be the teacher they thought they were going to be even though nobody has provided them with professional development, the colleges haven’t provided very good coursework and they didn’t get very good mentoring. But they have a vision of the teacher they want to be. We work with those teachers to bring them to a high proficiency in how to instruct in reading, how to instruct in writing, how to organize their time, how to organize their space and generally how to create rigor in their lessons….

We try to get the model classroom teacher to become what is called a “grade level leader” and bring together colleagues, who look at what they are doing to get better together, and we help that process along.

Right now, one of the metrics that was developed by the University of Pennsylvania’s Center for High Impact Philanthropy [found that the cost of] a child reading at grade level and not using our intervention with the teacher was basically $600 a child. If it were your child, would you pay $600 to have them read on grade level?

The Center for High Impact Philanthropy was there to encourage people to give us millions of dollars [of donations]. We used the money to create model classrooms and learning communities so there is none of the blind leading the blind, but having an expert instructor at the helm, who is in the school every day and setting the bar, saying “This is what my kids can do; your kids can do it, too.” It’s not the threat of the state testing. We equip teachers with a lot of books, we help them set up their classrooms and provide one-on-one coaching.

Now we are starting a new project to use model classroom teachers in what we call a pipeline for student teaching. We have 60 model classrooms in Philadelphia. We are going to place eight student teachers with eight of our model classroom teachers. But unlike the universities, we are paying somebody to coach them 30 or so hours. We’re also training the cooperating teacher so that when the student teacher comes in, the designated teacher doesn’t see somebody who is going to take care of lunch or take the kids to the bathroom. They see somebody who they will plan lessons with, are going to observe and are going to critique. But they need training to be able to do that.

Every time we’ve done this with model classrooms, the teachers are so excited. They want to do this work. We don’t have to get Harvard MBAs to come to the rescue. The people there are wonderful. They are public servants and want to do the work. We just have to make sure that they can.

Knowledge at Wharton: How many teachers a year do you train?

Katz: If you take the model classrooms and the colleagues, it could be anywhere from 500 to 1,000 teachers who we work with. We are in several big cities — Philadelphia, Newark, Boston, a little bit in D.C., Chicago, Atlanta. So we’ve done work in a lot of school systems.

Knowledge at Wharton: You said earlier that you had started this 22 years ago. What inspired you?

Katz: My mother read to me and I love reading. I was the first generation [in my family] to go to college. Everybody knows [the story about] the father who dropped out of high school and the mother who had a high school diploma but stayed at home. That I went to University of Pennsylvania was an astonishment. I went to a very blue-collar, working-class high school — Medford High School in Massachusetts. I always thought that it was because my mother read to me when I was little that I wanted that to happen for all kids. So I started Children’s Literacy Initiative and our initial thing was, “Let’s get some good books to parents.” Then we said, “Let’s get these good books to teachers and show them what to do with them.” You have much more control that way. I’m not trying to change the parenting of America. But I can change the teaching practices of kindergarten, first- and second-grade teachers.

As I started, I got into the research about why I felt the way I do about reading and found that all the science for the past 100 years is behind [the importance of reading to children]. This is why I got to Penn. There is no question about it. What you give your kids when you read to them is a higher order of vocabulary because written vocabulary is a vastly higher level than spoken vocabulary. If you read to your children — particularly [from] the good books that you can get from public libraries — you are giving your child the gift of vocabulary, which is the same as IQ. That’s what will help them do well in school.

Knowledge at Wharton: Do you feel that technology and peer pressure militates against reading as an activity for the young?

Katz: That’s part of this crisis that the Army was talking about. Young people don’t read for pleasure. We are trying to figure out what that’s going to do to the next generation. If taught poorly, reading becomes very difficult.

If I gave you a book and you didn’t know five words out of every hundred, that’s considered your instructional level in school — I would teach you with a book that you couldn’t understand five words out of every hundred. But as an adult, if I gave it to you, you would just put that book down — probably down in the trash can. As a leisure activity, we will not read books if we don’t know five words out of a hundred.

Our kids do not read because of the instruction. They get very little guidance in how to find a book that they will know, say, 98 words out of a hundred words so that it becomes a pleasurable experience, to then build up by reading, reading, reading. Teachers need to learn how to match children to their reading level. Right now, we give everybody the same textbook in high school and it will only be the reading level of a few of the children in the classroom. What is the point? You’ve done nothing.

Knowledge at Wharton: Do you focus on children up to a certain age or do you feel that intervening even later can be effective?

Katz: On the walk coming here, [there’s the quote from] Benjamin Franklin: An ounce of prevention is worth a pound of cure. We stop at third grade because a child who is a confident reader, reading on grade level at third grade, is far more likely to make it through. If a child doesn’t learn how to read on grade level by the end of first grade, there is only a 10% chance that child will ever read on grade level. I’m not just talking about urban children or suburbia. It’s every kid in America.

Once you fall off the reading wagon, putting you back on takes a lot more skill and time than the average teacher has. I’m not saying it can’t be done, but it’s a huge investment of time. Forty percent of kids will learn how to read fairly easily. Another 40% need expert instruction and then the last 20% are varying degrees of struggling readers. Somehow we’ve managed to turn about 60% of our kids into struggling readers. So it’s not a big surprise that they’d rather watch television because you don’t do something that you struggle with and doesn’t seem like it is going to yield improvement.

Knowledge at Wharton: Apart from literacy, do you feel that numeracy and skills like music are important?

Katz: Absolutely. Do you know El Sistema in Venezuela, in which all children get an instrument or they are in a course in the poorest neighborhoods? The crowning achievement is Gustavo Dudamel, who is from El Sistema and is now the 28-year-old head of the Los Angeles Symphony. Music is important and we know it raises the I.Q. Some children could be the [next] Gustavo Dudamel and if we don’t give them music lessons, how will we ever know?

Numeracy, of course, is important. Math is different than reading, and is almost all instruction. I just said that if you read a lot to your kids, they will have the right building blocks. In fact, that accounts for most of the suburban kids — the kids from the upper middle class. It isn’t because they are getting fantastically better instruction. It’s that they have got all the pieces in place from their family. That’s not to say that people with lower incomes can’t put all those pieces into place, but it’s harder. There’s not a bookstore in sight and you don’t have role models.

It’s just a different problem with numeracy. But numeracy yields to really good instruction maybe just as much if not more than reading….

Knowledge at Wharton: What would you like to achieve with CLI?

Katz: I would like CLI to be out of business. I want kids to learn how to read and feel good about it and achieve everything they can in school. I want teachers to have great careers, where they are teaching us, not us teaching them, about what is good instruction. Believe it or not, we could get there in a generation. Although one of our problems is that we want to get there in a year. So we have all the wrong solutions coming down because they give a quick bump [in performance] and, of course, they go away.

But we reformed the medical profession, and it was a similar situation. The president of Harvard in the late 1800s [Charles Eliot] said he shuddered to think of anybody going to a doctor trained at Harvard. Those were his words. But then we had Johns Hopkins, which showed a new way to train doctors, and this wonderful Carnegie study that said not only is this the new way to train doctors, but it will be the only way we train doctors. And lo and behold, we have a fairly well-respected medical profession — not just in this country, but internationally. It took some investment [in terms of] … raising the bar of who could become a doctor. But we got there.