Notes on inequality — solutions and responses

Education seems central to the response to both inequality and income stagnation. However, there is an emerging consensus that what we need now is not  just more education, but focused education that helps workers adapt to change and truly prepares kids to compete — the question is what that means and how to do it.

Clinton administration economist, Alan Blinder wrote:

Simply providing more education is probably a good thing on balance, especially if a more educated labor force is a more flexible labor force, one that can cope more readily with nonroutine tasks and occupational change. However, education is far from a panacea, and the examples given earlier show that the rich countries will retain many jobs that require little education. In the future, how children are educated may prove to be more important than how much. But educational specialists have not even begun to think about this problem. They should start right now.

Paul Krugman wrote this in 1996, assigned to write as if he were looking backwards from 2096:

In the 1990’s, everyone believed that education was the key to economic success. A college degree, even a postgraduate degree, was essential for anyone who wanted a good job as one of those ”symbolic analysts.”

But computers are proficient at analyzing symbols; it is the messiness of the real world that they have trouble with. Furthermore, symbols can be transmitted easily to Asmara or La Paz and analyzed there for a fraction of the cost in Boston. Therefore, many of the jobs that once required a college degree have been eliminated. The others can be done by any intelligent person, whether or not she has studied world literature.

Krugman referred back to those recently comments in a piece titled “Falling demand for brains.”

Harry Holzer, a former Chief Economist for the Department of Labor wrote in the Huffington Post:

Rather than focusing only on academic skills and higher education alone, we need education and workforce policies that more effectively are linked to sectors and employers where good jobs are being generated. Education institutions (like community colleges in the U.S.) and other training providers must work more directly with employers and industry associations, and must use data on employment growth and job vacancies to target high-demand and higher-wage sectors.

It is not enough just to send our students to college, where so many drift and ultimately drop out or get degrees in low-paying fields. They also need information and career counseling that helps them choose good-paying fields of study, and more courses offered in areas where demand is strong. They might also need real-world work experience to strengthen their skills and their connections to employers. And those who need remedial classes to improve their basic skills should find such help directly provided in their occupational training classes, and not in stand-alone classes that now generate very high dropout rates.

Harvard Business School Professor Clayton Christensen comments in the same vein:

Today, the educational skills necessary to start companies that focus on empowering innovations are scarce. Yet our leaders are wasting education by shoveling out billions in Pell Grants and subsidized loans to students who graduate with skills and majors that employers cannot use.

At the federal level, the conversation about inequality and middle-class income stagnation leads in some additional directions:

Apart from the last item, all of the above have some state level dimensions, especially health care cost control, which involves local industry restructuring. But education, perhaps the most positive element of the response, is primarily a state-local challenge.

In the end, I share the view that we are in a difficult period of change that can lead us to a better place.

Maybe the biggest reason for optimism is that there is still a strong argument that both globalization and automation help the economy in the long run. This argument remains popular with economists: Trade allows countries to specialize in what they do best, while technology creates opportunities to extend and improve life that never before existed.

Previous periods of rapid economic change also created problems that seemed to be permanent but were not. Neither the cotton gin nor the steam engine nor the automobile created mass unemployment.


Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

4 replies on “Notes on inequality — solutions and responses”

  1. I am very heartened by your apparent support for such sensible measures as raising the top marginal tax rates, improving the safety net, controlling health care costs, and keeping the recovery going by (I hope you mean) increasing federal spending and keeping interest rates low.

    I am much less clear on what you’re saying here about education, and I hope that the murkiness of your discussion indicates awareness that “education” is far from simple, that educational achievement is dependent mainly on non-school factors, and that educational achievement is dependent on non-school factors, and that schools need to focus more on fostering creativity and autonomy than on preparing students for high-stakes tests. As a public school teacher, I think education is essential to a good society, but I am very skeptical of education reformers who think that weakening teachers’ unions and increasing testing will somehow allow schools to singlehandedly defeat poverty. In fact, I think the opposite is true–we need a rigorous education that fosters creativity and autonomy in all of our students, and today’s drive toward ever more scripted lesson plans and year-round test prep is heading in the wrong direction.

    1. I’m not sure how keep the recovery going — that goes to macro-economics that is beyond my depth. From where I sit, it’s just a hope. I do think the evidence supports the proposition that a reasonable increase in top marginal rates would help the deficit without harming the economy, so it’s probably something we’ll have to do.

      Regarding education. Yes, it is complicated. My main thought about education is that we need to a better job accommodating and developing the diverse talents of our kids. There is a huge range of performance in every school and it’s hard for teachers to meet the needs of all kids. I think technology change is showing the way towards improvement, but that’s another conversation.

      1. Macro-economics is no more beyond your depth than the other questions you have addressed in these posts–no need for false modesty.

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