What knowledge economy?!

Posted: 24 March 2012 in Uncategorized
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The United States does not have now, nor will it have in the foreseeable future, a knowledge economy.

That’s Alexander Cockburn’s conclusion[ht: ja], based on an analysis of data from the Bureau of Labor Statistics (pdf) conducted by Jack Metzgar. (Here is another useful BLS projection [pdf], whence the chart above.)

Most people are surprised when I tell them that only about 30% of Americans over the age of 25 have bachelor’s degrees.  This is especially true of professional middle-class folks who went to high schools where almost everybody went to college immediately after graduation and whose friends now are almost all college graduates.  But it’s also true of people from working-class and poor backgrounds, who seem to think they are “abnormal” or “below average” because they haven’t graduated from college.  They’re not.  They are, in fact, the ones who are “typical.”

It’s even more surprising, however, when the Bureau of Labor Statistics (BLS) reports that in 2010 only 20% of jobs required a bachelor’s degree, whereas 26% of jobs did not even require a high school diploma, and another 43% required only a high school diploma or equivalent.  And according to the BLS, this isn’t going to change much by 2020, since the overwhelming majority of jobs by then will still require only a high school diploma or less.  What’s more, nearly 3/4ths of “job openings due to growth and replacement needs” over the next 10 years will pay a median wage of less than $35,000 a year, with nearly 30% paying a median of about $20,000 a year (in 2010 dollars).

Put these two sets of numbers together, and it is hard to avoid the conclusion that Americans are over educated for the jobs that we have and are going to have.  It’s hard to imagine why anybody would call us “a knowledge economy.”   It’s also hard to see how “in the 21st century, the best anti-poverty program around is a first-class education,” as President Obama famously said in his 2010 State of the Union Address.

At the top of the list are retail salespersons, who in May 2010 made on average $20,670 a year.

Why, then, all this focus on the growth of the knowledge economy? Metzgar suggests one reason: it’s politically convenient for mainstream politicians, including Obama, to respond to the problems of unemployment, poverty, and inequality by suggesting more educational opportunities rather than increases in wages let alone structural changes in how corporations are organized.

A second reason is the selling of the city and the current fad to promote the “creative class” as the solution to urban decay. Adam Davidson’s gloss on Richard Florida’s idea of small cities that feed the knowledge economy includes a case study of Omaha, Nebraska:

Together, the two fads—for national and urban development based on knowledge—presume and promote a conception of the economy according to which economic value and social health are created by the activities of a small highly educated elite and that the broad mass of people with high-school degrees (or less) deserve their low incomes and economic insecurity. The solution, therefore, is to reorient the world according to the needs of the small creative class and to either ignore the needs of everyone else or to encourage them to acquire the education necessary to join the creative class.

As Metzgar explains,

If we were serious about eliminating poverty or restoring the credibility of the American Dream or simply respecting lifetimes of hard work, we would be debating how to raise wages directly – how to make it easier for workers to organize themselves into unions, how to get the federal minimum wage higher and on a steady inflation-adjusted escalator, whether to require some kind of workers council for all employers, and then legally require that the benefits of productivity growth be shared with workers.  We’d also be discussing how to use a more steeply progressive system of taxation to build a social wage that makes the basics of life – food, housing, mass transit, child care, education, and health care – cheaper for everyone, but most crucially for lower wage workers.

  1. […] Richard Florida continues to peddle his story of knowledge workers, the creative class, and urban clustering (about which I have raised questions before, such as here and here). […]

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