Education Is Not Not Not the Cure for Inequality

Lawrence MishelThere was a time where it was plausible to argue that more education and innovation were the primary solutions to our economic problems. But that time has passed. You cannot tell that, however, to the Wall Street Democrats and their Hamilton Project at the Brookings Institution…

The new framing paper released by the Hamilton Project details how “advancing computer power and automation technology” creates a challenge for “how to educate more people for the jobs of the future, how to foster creation of high-paying jobs, and how to support those who struggle economically during the transition.” This is pretty much the same analysis we heard from the Clinton administration 20 years ago, when the discussion was of a “transition to the new information economy.” Let them eat education.

The education-only solution wasn’t appropriate when it was first put forward, and it is not even remotely plausible now given developments since the mid-1990s — and especially since 2000. Wages for the college-educated have been stagnant for the dozen years since 2000 (when the wage boom of the late 1990s receded). That stagnation has affected the bottom 70 percent of all college graduates both in the last recovery and throughout the Great Recession and the recovery from 2009 through 2014. Moreover, the college wage advantage has grown very little since the mid-1990s: This means that the continuously growing wage gap between high-wage and middle-wage workers since then has had very little to do with education wage gaps.

As documented by the New York Federal Reserve Board, we have seen accelerating underemployment of young college graduates. Recent cohorts of college graduates have been taking jobs at lower wages and with fewer benefits ever since 2000. Besides that, the observation that there are multitudes of college graduates working as free interns should tell us that there is no widespread shortage of college graduates. So the idea of education as cure-all is absurd…

[T]here is not much in this narrow agenda that provides any prospect that the vast majority will soon share in the economic growth they help to produce. Any real solution, after all, will need to challenge the current dominance of employers over wage growth.

—Lawrence Mishel
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