In recent weeks Fortune Magazine in Business Gets Schooled and the NY Times in The Counterfeit High School Diploma blamed public schools for turning out workers ill-equipped for today’s jobs. Both articles allege that public school failure is causing our nation’s economic problems and the loss of our edge in the global marketplace. This is, of course, an old story, but according to economists, this story line may not describe our economic reality at all.
Robert Kuttner explains in a detailed and very readable piece, “The New Inequality Debate,” in the Winter 2016 issue of The American Prospect, that although the consensus among economists used to be that economic inequality derives from a skills gap—between what employers need and job seekers present—the problem is instead about power on all kinds of levels—the power of employers over workers in these days of weakened unions—the power of wealth influencing the political system and so on.
Kuttner describes recent work by the British economist Anthony Atkinson and a new, more popular book by Robert Reich, who describes, “all the ways that political power by economic elites rigs the rules of how markets work—in favor not of efficiency, but of the rich and the powerful—increasing both inefficiency and inequality. With increased market power comes increased concentration of wealth, and still more concentration of both political and economic power.” Kuttner describes a growing consensus that includes not only Atkinson and Reich, but also prominent economists who have examined the waning power of unions—Larry Mishel at the Economic Policy Institute, Nobel Prize winner Joseph Stiglitz, Thomas Pikkety, and now even Robert Solow, Jason Furman, Peter Orzag, and others.
Michelle Chen of The Nation counters the NY Times editorial that deplores the quality of today’s high school diploma with a report on the work of the Economic Policy Institute (EPI), which has tracked trends in the labor market for years. Chen summarizes EPI’s conclusions: “(H)istorical trend lines suggest that skills required in high school curricula today might often exceed those the job market demands—linked in part to the so-called ‘deskilling’ of certain conventional trades, which some economists argue is pushing highly trained workers ‘down the occupational ladder’ (read: baristas with BA’s). If there is a gap in qualifications, it seems to center on overqualified workers who can’t find positions commensurate with their credentials. (By the way, the same research reveals steadily rising portions of high schoolers taking Algebra II, along with calculus, chemistry and physics—so maybe it’s not the school system lacking rigor, but the labor market).”
Chen explains that EPI “reverses the blame equation for young graduates by tracking barriers to secure employment that can’t be explained away by variations in academic rigor. “(L)ong-term unemployment has consistently afflicted workers at all education levels, undercutting the notion that some magical pool of jobs is waiting to be claimed by those with just the right skill sets… The perceived diploma crisis parallels the slippery rhetoric around the so-called ‘STEM crisis,’ which corporate giants have portrayed as a systemic lack of qualified graduates to fill scientific and technical positions. Yet empirical analyses of STEM field job markets reveal distinctly little evidence of a widespread, systemic lack of graduates across STEM fields. Perhaps an immediate ‘shortage’ of software engineers might appear alongside a glut of chemistry PhDs, and plenty of science majors work outside their field. That could reflect graduates taking divergent paths to seek coveted good-paying jobs. It certainly doesn’t mean science and tech are not important educational fields to develop. But these patterns do not point to a structural educational crisis.”
Here is what Larry Mishel and Richard Rothstein posted last spring on the website of EPI: “It is especially telling that wages of college graduates, not just those of non-college educated workers, have been flat for a decade, and that young college graduates have been faring poorly, even prior to the 2008 recession. According to a recent report of the New York Federal Reserve Board, the percentage of recent college graduates, ‘who are unemployed or under employed—working in a job that typically does not require a bachelor’s degree—has risen particularly since the 2001 recession. Moreover, the quality of the jobs held by the underemployed has declined, with today’s recent graduates increasingly accepting low-wage jobs or working part time.’ In other words, skills gaps are responsible for neither our unemployment problems nor our wage problems.”
Chen sums up the mistake in our indictment of the public schools: “So before we blame schools—again—for ‘dumbing down’ standards, consider other deficits that high school graduates face in today’s economy: massive income inequality and stagnant wages, chronic financial crisis amid unsustainable housing costs and suffocating debts. And youth are graduating to a bleak gap in the quality of work, with a rise since the recession in relatively low-paying jobs without benefits.”