The problem is making someone repeat a grade destroys their social life leading to even worse grades later on when they give up on school. You get kids failing multiple times until they complete the mandatory education and then get kicked out without graduating, can't find a job and become criminals. It also takes away from the economy because you start working a year later.

I think there are two solutions. You can make students repeat only the failed class and take it with their normal classes next year like in college. Or a requirement based system where you can only graduate after passing every class on the plan but you can attempt them as many times as you want (even after you're out of school and working full time).

One of the two main reasonz that diplomas (or grades) are economically valuable in the first place is that they perform a signaling function. They signal, however imperfectly, some measure of competency, discipline, and intelligence. (Some diplomas also signal membership in a certain social class.) Employers utilize those signals to make hiring decisions, which makes them valuable.

When those signals become sufficiently polluted, employers will invariably turn to some other signal.

Lowering the standards is a move politicians often make because it "solves" the problem you outline in the short term, even though it's ultimately self-defeating because it directly undermines the virtue signaling function of academic credentials. It's a "solution" which requires no funding, no changes to teaching practices, and no changes to the ways schools are organized. So it's attractive and politically feasible even though it's harmful and profoundly stupid.

The solutions you've proposed are the right kind of solution because they preserve the signaling function of credentials. But so far they're approaches that public schools and the governments that run them seem politically incapable of taking.

There's also something else to confront here in that even when the competency signaling functions are intact, academic and professional credentials are also to some extent scarcity goods, valuable precisely because not everyone has them. So if you solve all of these problems and you still allow grades to at least attempt to fulfill their purpose, a functional and coherent grades system will, to some extent, always perform differentiation of the labor market or be obviated by its failure to differentiate. The inequality that you see manifest as students who fail to graduate falling behind in life is actually downstream of the schools, and it has to do with how many seats are available for what kinds of jobs in the economy. If you address the former without addressing the latter, the real social justice impact is going to be limited.

And you ultimately can't educate your way out of having a working class; at some point you have to look elsewhere for assuring the dignity, security, and comfort of people who academically underperform relative to others.

A graduate who can't read or do basic math isn't contributing much to society, and their social life likely isn't great anyway. It's likely better all around that they get forced into learning the basics than pushed along into things they have no chance of understanding.

So we’re more worried about a kid’s social line than education and future employability. Got it.

Thinking back, different era and country, but fear of failing was much much bigger than not getting an A.

Currently there are no short term consequences to failing. Won’t this provide a motivation to a set of students to do better. The ones who’re going to fail are the ones suited to trade or other jobs, and other avenues later in like to get high school diploma. Maybe this is not the right time in their life and they need different help than being mindlessly promoted in school.

your adult life and career will be ruined even worse if you cant grasp basic math.

The school is supposed to be a safe learning environment, not a simple daycare.

learning means giving a feedback to improve. If you destroy the feedback mechanism that gives negative news, then people stop learning altogether.

Imagine trying to train a neural network, but you dont have backpropagation, because negative feedback is bad. So you stick to throwing noodles at the wall and hope something will stick