September 2012, Week 3


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Sat, 15 Sep 2012 14:07:46 -0400
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Is Education a Silver Bullet for Fixing the Economy?

By Richard Kirsch
Next New Deal
August 3, 2012


Education is certainly important, but if it doesn't go
hand-in-hand with the creation of good jobs, we'll
have an economy built on quicksand.

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

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

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

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.


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