Is Education a Silver Bullet for Fixing the Economy?

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.”

 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?

 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.  

 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.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author ofFighting 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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