Education Will Not Rescue the Collapsing Middle Class
By Anthony Cody
About a month ago, the New York Times carried a story with a familiar refrain. The headline read: “Closing Education Gap Will Lift Economy, a Study Finds.” In the article, journalist Patricia Cohen tells us, “When it comes to math and science scores, the United States lags most of the other 33 advanced industrialized countries that make up the Organization for Economic Cooperation and Development, ranking 24th, far behind Korea, Poland and Slovenia.” “Moving up just a few notches to 19th — so that the average American score matched the O.E.C.D. average — would add 1.7 percent to the nation’s gross domestic product over the next 35 years, according to estimates by the Washington Center, a nonpartisan, liberal-leaning research group focused on narrowing inequality.
That could lead to roughly $900 billion in higher government revenue, more than making up for the cost of such an effort.” “If Americans were able to match the scores reached in Canada, which ranks seventh on the O.E.C.D. scale, the United States’ gross domestic product would rise by an additional 6.7 percent, a cumulative increase of $10 trillion (after taking inflation into account) by the year 2050, the report estimated.”
This sort of lofty speculation has driven education reform for the past decade. Back in 2010, Bill Gates speculated on Oprah that if we were able to rid ourselves of “bad teachers,” “our schools would shoot from the bottom of these (international) rankings to the top,” and this would give our economy a huge boost. Fortunately for us, the New York Times also features Nobel Prize winning economist Paul Krugman, who offered a perspective debunking this line of thought.
Krugman goes to the heart of the argument. Those who believe that education will yield great economic growth are essentially arguing that a lack of education is holding wages down and the economy back. This is sometimes described as a “skills gap,” meaning that there are skilled jobs left unfilled because of a lack of people with the necessary education to fill them. Not so, says Krugman. “… there’s no evidence that a skills gap is holding back employment. After all, if businesses were desperate for workers with certain skills, they would presumably be offering premium wages to attract such workers. So where are these fortunate professions? You can find some examples here and there.
Interestingly, some of the biggest recent wage gains are for skilled manual labor — sewing machine operators, boilermakers — as some manufacturing production moves back to America. But the notion that highly skilled workers are generally in demand is just false.” Furthermore, he points out, “…the inflation-adjusted earnings of highly educated Americans have gone nowhere since the late 1990s.” In fact, according to this article from the Economic Policy Institute, even the most educated workers have seen their wages decline in recent years.
Krugman has a theory as to what is happening: “…what is really going on? Corporate profits have soared as a share of national income, but there is no sign of a rise in the rate of return on investment. How is that possible? Well, it’s what you would expect if rising profits reflect monopoly power rather than returns to capital.”
I came across a new website hosted by Pearson, which offers all sorts of education related data. I took a look at the page focused on the United States, and found this information especially interesting: US per capita Gross Domestic Product (GDP) is $54,550. That means there is enough wealth for every single person in the US to have that income. The GDP per actual worker is $101,430.
Pearson does not report the following, but according to the US Census Bureau, the median income for men with jobs is $50,116, and for women it is only $38,340. If each worker is generating more than $100,000 in income, where is all that income going? The college graduation rate in the US is now an all time high — 38.75%. If sending more people to college would restore the middle class, shouldn’t we have seen evidence of that by now? Krugman explains: “As for wages and salaries, never mind college degrees — all the big gains are going to a tiny group of individuals holding strategic positions in corporate suites or astride the crossroads of finance. Rising inequality isn’t about who has the knowledge; it’s about who has the power.” This means that the entire economic premise of the education reform enterprise is bankrupt.
There is no “skills gap,” no “STEM crisis” preventing our economy from advancing. There are no riches to be gained by investing in education. If there were, the powerful might actually favor spending more money on schools, rather than cutting budgets to the bone. There is plenty of wealth in our economy to invest in high quality education for every child in this nation. And it is tempting to grasp onto the idea that doing so will yield economic benefits, and use this as a rationale to advocate for such investment. But when we do so, we inadvertently concede that our economic problems are due to inadequate education.
This is fundamentally untrue, and it bears several costs that are harmful to our schools and children. First, this places the needs of employers as the central driver for education. The demand that our schools “prepare students for college and career,” as defined by the Common Core, has surpassed and subsumed all other goals for our schools. And we see this logic now extending to higher education, through “Outcome Based Funding.”
This is not serving children well. Our schools ought to serve the full development of children as human beings, in all dimensions, including those without direct economic return. Second, the premise that weak educational performance is the source of the decline of the middle class deflects attention from the real sources of economic deprivation. The fact is that as economic productivity has continued to rise, the benefits of that productivity are being hoarded by the very wealthy. Education is a convenient scapegoat, and this allows political leaders to pretend they are doing something for the poor when they condemn their schools as failures and turn them over to private and semi-private schools.
The greatest lesson we ought to be drawing from the past two decades of concerted concentration of wealth is that the needs of corporations are not the same as those of the poor. If education is redesigned for maximum benefit to corporations, and if reforms are designed to do this more efficiently, this is not likely to lead to any restoration of the middle class, or any increase in equity or opportunity for the poor. As Paul Krugman points out, this is about power. Raw power. It is time that power was reclaimed by ordinary people. Perhaps we need some education reform with that goal in mind.
The opinions expressed here are solely those of Anthony Cody.