Can schools fix our economy?

Education is certainly important, but it must go hand-in-hand with the creation of good jobs

Published August 5, 2012 12:00PM (EDT)


This originally appeared on Next New Deal.

We all know that the key to our economic future is a more educated workforce, right? Here, for example, are the “Guiding Principles” of President Obama’s education policies: “Providing a high-quality education for all children is critical to America’s economic future. Our nation’s economic competitiveness and the path to the American Dream depend on providing every child with an education that will enable them to succeed in a global economy that is predicated on knowledge and innovation.”

Next New Deal

Now it’s certainly true that a good education is still the best ticket – other than inheriting wealth – to entering the middle class. In the simplest terms, Americans with a Bachelor’s degree or more earn more than the average wage and those with an Associate’s degree earn less. So it makes sense for us to encourage our children to get a good education. But is the president’s assertion that the path to the American Dream in the new global economy depends on providing every child with a good education true?

As an important new report underscores, if that is the only path we rely on, our economy will come up way short and so will the great majority of Americans who are striving to live the American Dream – with and without a good education.

In Where Have All the Good Jobs Gone?, Center for Economic and Policy Research economists John Schmitt and Janelle Jones make a simple and powerful point: over the past three decades, the workforce in the United States has gotten a lot more educated and productive, but fewer of us have a good job. The standard that Schmitt and Jones set for a good job is pretty basic: earning the median wage for men of $37,000 a year and having some sort of health insurance and retirement fund at work. Of course, that isn’t a lot of money, and with most workers forced to pick up a bigger share of shrinking health benefits and pensions giving way to 401Ks, not a lofty benefit plan. Which is what makes the results of the study so striking. Even though the typical American worker is twice as likely to have a college degree than 30 years ago, the share of the workforce that has a good job declined, from 27.4 percent to 24.6 percent. The kicker here is that the decline occurred at every education level, although it was worse for those with a scanty education. But even workers with a four-year college degree or better were less likely to have a minimally decent job.

The CEPR researchers take the data a bit further to make two compelling points. If we had not increased our educational level, it would have been a lot worse: only 17 percent of workers would have good jobs. The second point is that if job quality had kept up with increases in education, then 34 percent of workers would have a good job.

I want to throw one more scary statistic into this brew before drawing the implications for building an economy that will work for everyone: most of the jobs that will be created in the next decade don’t require much of an education. Of the 10 occupations expected to create the most jobs, eight of them require a high school degree or less. There will be almost four million job openings for retail clerks, home health aides, and the like compared with one million for nurses and college professors, the only two jobs in the 10 that require more than a high school degree.

These numbers foretell an economy where even workers with a good education are barely making it and most Americans don’t have a prayer of living the American Dream.

The guiding principle for a different economic path is making the middle class the engine of the economy. Our economic policy must be driven by a commitment to make every job a middle-class job, regardless of the educational level of the worker. That means sharing our economic progress broadly, not concentrating it among a shrinking sliver of the rich.

As the authors of Where Have All the Good Jobs Gone? point out in the first paragraph of their report, we have gotten a lot richer as a nation – 60 percent richer – over the 30 years in which good jobs dissolved. A more educated workforce, and an increase of about 50 percent in physical capital growth, led to a big jump in productivity. If that growth in productivity had been shared fairly, that $37,000 median wage would be a lot higher: $68,000 by one calculation. Even by a more modest measure, if inequality had not increased, median family income would be $9,000 more. By either calculation, if that extra income were in the pockets of Americans – instead of sitting in the investment portfolios of the super-rich and big corporations – the economy would be booming.

There are a host of policy solutions to build an economy in which our growth is broadly shared. A huge step would be to increase unionization. The manufacturing and construction workers of the mid-20th century didn’t have a high school education – they had a union. We should boost pay for low-income workers by increasing the minimum wage and enforcing wage laws so that employers pay workers for overtime and meal breaks and don’t steal their wages or pretend they are independent contractors. We need to use public dollars to invest in job creation, from construction workers to school teachers, all with good wages and benefits. And yes, we should make it possible for many more of our young people to get a good and affordable education. But whether they get that education or not, all workers should get enough to live a dignified, secure life so they can take that path to the American Dream.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

By Richard Kirsch

MORE FROM Richard Kirsch

Related Topics ------------------------------------------

Education Jobs Next New Deal Schools Teachers Unemployment U.s. Economy