Thursday, January 13, 2011

The Limits of Education

The Economic Policy Institute has an important paper posted: "Education is Not the Cure for High Unemployment or for Income Inequality" by Lawrence Mishel

The abstract is at the bottom of this post.

It is interesting that I found this post today. Earlier today I had a conversation about this very topic. I addressed it in my book, Governing Childhood: Biopolitical....

The problem for many Americans is NOT lack of education or lack of a relevant education. The problem is that the top 10% of the population is soaking up all the wealth. This problem has been well documented.

When top executives and shareholders soak up all the wealth there is less for engineers, manufacturing workers, salespeople etc.

We saw this problem in the Phoenix housing bubble. The two sales people sitting inside the model homes would make 300,000 to 500,000 a year while the carpenters, electricians, and plumbers who built the houses made $7-15 dollars an hour with NO BENEFITS.

The workers were all employed by sub-contractors who the builders contracted with. The sub-contractors would often make the workers be independent sub-contractors so that no social security wages would have to be payed. Even electricians and plumbers made terrible wages unless they had people under them working for less.

It was a terrible, exploitative pyramid that leveraged illegal labor and marginalized skilled blue-collar workers. Illegal immigrants were disposable if they were injured or made any demands.

The amount of money made at the top was simply sick. I know because many of our acquaintances were in the industry.

Jacob Hacker's excellent new book , Winner Take All Politics provides the evidence for why this type of scenario is occurring (and has been) across the US in many industries:

I am all for education but lack of education is not the problem for most American workers.

here is the abstract from Mishel's paper at the Economic Policy Institute

With signs pointing to persistent high unemployment and a recovery even weaker than those of the early 1990s and 2000s, it is becoming common to hear in the media and among some policy makers the claim that lingering unemployment is not cyclical but “structural.” In this story, the jobs problem is not a lack of demand for workers but rather a mismatch between workers’ skills and employers’ needs. Another version of the skills mismatch is also being told about the future: we face an impending skills shortage, particularly a shortfall of college graduates, after the economy returns to full employment.

The common aspect of each of these claims about structural problems is that education is the solution, the only solution. In other words, delivering the appropriate education and training to workers becomes the primary if not sole policy challenge if we hope to restore full employment in the short and medium term and if we expect to prevent a (further) loss of competitiveness and a further rise in wage and income inequality in the longer term.

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