Arkansas has a small, rural, undereducated population; few people move either in or out. Youth poverty is a major state problem, affecting the white and black and the rural and urban residents alike. The state's economy needs more diversification as there is little activity in the well-paying end of the service sector at the present; however, while most other states have been losing manufacturing jobs, Arkansas has held onto--and even added to--the jobs in this sector. This base can provide some stability as the state diversifies its work force by moving into other areas of business. Education does not make jobs, but a lack of education can certainly make jobs disappear. While raising educational standards is reasonably cheap, getting a larger percentage of youth to achieve these higher standards is quite costly but well worth it. Additional efforts must be made to fund educational programs, including those for the vital preschool years. Arkansas' higher education is in comparatively better shape than the public schools, and would benefit greatly if more talented and well-prepared graduates from the state's high schools could attend its colleges and universities. (23 references) (KM)