For almost 50 years, the United States and a number of other countries have periodically participated in international math and science assessments. Until quite recently, little attention has been given to the fact that U.S. students have never performed very well on these tests. With, however, attention from Secretary Duncan and others, awareness has been elevated, leading to broader discussions not only of how to interpret the apparently mediocre scores of U.S. students but also of what to do about them. Martin Carnoy and Richard Rothstein, in a recent report for the Economic Policy Institute, now tell us that performance is not as bad as you think and that Secretary Duncan should stop making “exaggerated and misleading statements” about the performance of U.S. students. To arrive at this conclusion and the accompanying one-liner for media consumption, Carnoy and Rothstein begin with the fact that U.S. students are disproportionately disadvantaged when compared to students in a sample of high performing countries (Canada, Finland, and Korea) and in a sample of post-industrial countries (France, Germany, and the United Kingdom). They then re-weight average PISA test scores in the U.S. and these six countries by the distribution of socio-economic status (measured in their analysis by numbers of books in the home) in an attempt to equalize statistically the distribution of family backgrounds across countries. Adjusted for books in the home, U.S. students in math still lag behind Canadian, Finnish, Korean, and German students but pull even with those in the U.K. and come close to those in France. They then repeatedly work to convince us that everything is not as bad as thought and may even be pretty good. But what is the question that these calculations answer? The reason that Secretary Duncan and others, including me, are concerned about the performance of U.S. students is that the international achievement scores in math say a great deal about the skills that our students will take to the labor force. These human capital differences, according to historical data, bear a direct relationship to growth of the national economy. And the economic implications of mediocre performance are enormous. The Carnoy and Rothstein calculations simply do not deal with the relevant differences in skills across countries. We have the population that we have – not the population of Finland. So their adjustments cannot address the question of how well prepared our future labor force might be. How well prepared we are depends on the skills of all of our population, not just those that statistically look like Finns. In fact, as prior analysis by Paul Peterson, Ludger Woessmann, and me shows, looking at just our most advantaged socio-economic subgroup (children of college educated parents) does little to erase the deficits with other countries in advanced math and science performance, which is the preparation for science and engineering careers. There is a hint – although largely unstated in the report’s 100 pages – that these calculations can be used to answer the question ‘how well are our schools doing?’ Specifically, they might absolve our schools of guilt, because it is the parents of these disadvantaged children that lead to much of the difference in scores, perhaps even all of the difference between scores with the U.K. students. Even if their adjustment removed all of the measured international skill gap, why should we chide Secretary Duncan for pointing out that our students are less prepared than those of the other six sampled countries? It might mean that our schools face more difficult educational challenges than found in the other countries, but surely this does not imply that we should “rest on our laurels” (such as they are). First, most of the international gaps remain after standardization. Even after adjustment, the U.S. remains at best in a three-way tie for fifth out of seven. Second, we are past saying that there is nothing we can do to educate our racial and ethnic minorities and our economically disadvantaged; hundreds of schools have proven this wrong. Third, this is the population that we have. The U.S. does look somewhat better in comparison if we use international reading assessments. I personally am skeptical about our ability to obtain valid and reliable reading comparisons across different languages. It also appears that math and science assessments say more about skills valued in the labor market than reading assessments. Yet, again, even after adjustment, we know from the international reading assessments that we have a long way to go to compete with the top countries. Historically, when it comes to economic performance, the U.S. has remained the strongest economy in the world. A variety of advantages have allowed us to overcome the shortcomings of skills that are exposed by these tests. This historic economic strength reflects our earlier historical commitment to universal secondary school attainment; our strong and well-developed economic system; our secure property rights and free movement of labor and capital; our world’s best universities that can overcome some of the low entering skills; and our use of skilled immigrants to bolster our innovative capacity. Unfortunately, all of these advantages over our economic competitors are going away as many have made great strides in emulating and even surpassing these strengths of the U.S. In the future, we will simply have to rely just on our skills if we are to sustain our current economic standing – and skills are what are measured by the international assessments. In sum, we cannot paper over the fact that a large number of other countries have shown that it is possible to develop considerably higher skills in their youth than we are doing. Our future depends on the skills of our population, and it is time to recognize that we are lagging. Secretary Duncan is neither exaggerating nor misleading about this. Eric Hanushek is a senior fellow at the Hoover Institution of Stanford University and a member of its Koret Task Force on K-12 Education.