Posts Tagged ‘education’

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Eduardo Porter is right: the “long, painful slog out of the Great Recession” hasn’t been accompanied by any kind of shared prosperity.

As the chart above reveals, the share of income going to the bottom 90 percent of U.S. households has actually fallen since 2007 (from 50.3 percent to 49.5 percent)—and, in recent years, remains far below what it was (67.4 percent) in 1970.

In other words, the so-called recovery looks a lot like the unequalizing dynamic of the U.S. economy in the years and decades leading up to the Great Recession. Those who work for a living have been getting less and less, while those at the top have managed to capture and keep the growing surplus.

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We’re not just talking about the white working-class. Wages “for all groups of workers (not just those without a bachelor’s degree), regardless of race, ethnicity, or gender”, have (since 1979) have lagged the growth in economy-wide productivity.

And that’s just in terms of income. As Porter explains,

by many other metrics, Americans’ well-being remains pretty low. Whether it is life expectancy or infant mortality, incarceration or educational attainment, countless statistics offer a fairly dark picture of the American experience. It is a picture of prosperity that consistently leaves large numbers of Americans behind.

The United States suffers the highest obesity rate among the 35 industrialized countries that make up the Organization for Economic Cooperation and Development. In terms of life expectancy at birth, it ranks 10th from the bottom. America’s infant mortality rate has dropped by half since 1980. Still, today Turkey and Mexico are the only countries in the O.E.C.D. to report a higher share of dead babies. Infant mortality fell faster in almost every other industrialized country.

Mainstream economists, politicians, and pundits may prefer to focus on the first part of Charles Dickens’s famous opening sentence. But that’s only true for the tiny group at the top. For everyone else, it really is—and has been for decades—”the worst of times.”

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We’ve just learned that the corporate payouts—dividends and stock buybacks—of large U.S. firms are expected to hit another record this year. At the same time, John Fernald writes for the Federal Reserve Bank of San Francisco that the “new normal” for U.S. GDP growth has dropped to between 1½ and 1¾ percent, noticeably slower than the typical postwar pace.

What’s the connection?

Fernald, as is typical of many others who have concluded the United States has entered a period of slow growth, blames the “new normal” on exogenous events like population dynamics and education.

The slowdown stems mainly from demographics and educational attainment. As baby boomers retire, employment growth shrinks. And educational attainment of the workforce has plateaued, reducing its contribution to productivity growth through labor quality. The GDP growth forecast assumes that, apart from these effects, the modest productivity growth is relatively “normal”—in line with its pace for most of the period since 1973.

What Fernald and the others never mention is that American companies’ embrace of dividends and buybacks comes at the expense of business investment, which is an important contributor to worker productivity and long-term economic growth.

In other words, what they overlook is the possibility that the current slowdown—which, “for workers, means slow growth in average wages and living standards”—may be less a product of exogenous events and more the way the U.S. economy is currently organized.

When workers produce but do not appropriate the surplus, they are victims of a social theft. And then, when a larger and larger portion of of the surplus is distributed to shareholders (both outside investors and corporate executives)—that is, the tiny group at the top who share in the booty—workers are, once again, made to pay the cost.

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We can thank Donald Trump for one thing: he’s put the white working-class on the political map.*

In recent months, we’ve seen a veritable flood of articles, polls, and surveys about the characteristics, conditions, and concerns of white working-class voters—all with the premise that the white working-class is fundamentally different from the rest of non-working-class, non-white Americans.

But why are the members of the white working-class attracting so much attention? My sense is, they both represent a threat—because many plan to vote for Trump and, more generally, reject much elite opinion (including, but not limited, to Trump)—and, at the same time, are assumed to be a dying breed—as the U.S. working-class becomes more female, more racially and ethnically diverse, and increasingly employed in non-manufacturing jobs. So, the argument goes, the white working-class, supposedly radically different from the rest of Americans, is motivated by fear and resentment occasioned by a loss of identity and standing.**

Hence the curiosity—best exemplified by a new CNN/Kaiser Family Foundation [ht: ja] poll, about what white working-class Americans think. The results of the poll are interesting, if only because on many issues (aside from support for or opposition to Trump and immigration) the white working-class holds views that are not all that different from other whites, blacks, and Hispanics.

The fundamental problem with CNN/Kaiser poll (as with so many others) is its basic definition of the working-class: “those who have attained less than a four-year college degree, excluding those between the ages of 18-24 who are currently enrolled in school.” As I have argued before (e.g., here and here), that’s not the working-class. It’s just people who never went to or didn’t finish college. What they’re using is a definition of the working-class that doesn’t include all those other people, many of whom have college degrees, who are forced to have the freedom to work for someone else in order to make enough money to support themselves and their families. Together, most Americans with and without college degrees work for the boards of directors of large corporations—and they don’t manage the production process or supervise other employees.

As Vivek Chibber explains,

Workers show up for work every day knowing that they have little job security; they are paid what employers feel is consistent with their main priority, which is making profits, not the well-being of employees; they work at a pace and duration that is set by their bosses; and they submit to these conditions, not because they want to, but because for most of them, the alternative to accepting these conditions is not having a job at all.

The working-class, as I am defining it then, turns out to comprise the vast majority (70-80 percent) of the U.S. population. And most of them, of course, are white.

So, what does the CNN/Kaiser pool reveal about the views of, to be clear, one portion of the white working-class? As I wrote above, on many issues, they’re not all that different from other whites or blacks and Hispanics without college degrees. In terms of their own lives, most of the so-called white working-class, as the other poll respondents, are not angry, worried, pessimistic, or unhappy. But they are dissatisfied with the country’s economic situation and with the influence on the political process of people like them. In recent years, they report it’s become harder for them to get ahead financially and to find good jobs. Finally, they blame the federal government much more than their employers or Wall Street for the economic problems facing the working-class and they believe the federal government helps wealthy people too much and members of the working-class too little.

That’s exactly the set of answers one would expect from the American working-class—white, black, and Hispanic, with and without college degrees—right now. They’re getting screwed and, while they may not be dissatisfied in their own lives, they certainly think both the economic and political systems are stacked against them. Perhaps the only surprising item in the survey is the extent to which they blame the government, and not their employers or Wall Street, for the economic problems facing the working-class.

The only major differences within the working-class have to do with Trump and the role of immigrants. While 56 percent of whites without a college degree would consider voting for Trump, most other respondents would definitely not vote for him. A similar difference emerges with respect to immigrants: a much smaller percentage of the so-called white working-class believe immigrants “strengthen our country” and a much higher percentage thinks “immigrants today are a burden on our country” than the other groups.***

In the end, those two differences—on Trump and immigration—are what make the so-called white working-class interesting to the media. It’s not their conditions or their grievances, much of which they share with other members of the working-class. It’s only the fact that they threaten to vote for the renegade presidential candidate and they’re wary about the role played by other, immigrant members of the working-class. And, of course, many of them are thrown into the “basket of deplorables” by the opposing campaign.

Both presidential candidates, then, are sowing and exploiting those differences to their own advantage, which is what U.S. politicians have always attempted to do when it comes to real or imagined divisions within the working-class. That’s how they campaign and that’s how they hope to get elected.

Trump and Hillary Clinton (and their echoes in the mainstream media) have created the “white working-class” and they hope to ride it—as a source of support or a specter—to victory in November. And then, whoever wins, they’ll abandon it—along with the rest of the working-class.

 

 

*Actually, Bernie Sanders also played an important role in focusing attention on the white working-class, especially with his stunning primary victories in Michigan and West Virginia. Since his loss to Hillary Clinton, however, the white working-class (along with the rest of the American working-class) has virtually disappeared from Democratic discourse.

**As Connor Kilpatrick has explained, the Democratic Party “has established a clear line on the white wage-earning class: they’re all either dying (demographically or literally), irrelevant in an increasingly nonwhite country, or so hopelessly racist they can go off themselves with a Miller High Life-prescription-painkiller cocktail for all they care.”

***There is one additional difference that requires mention: while a majority of whites—with (62 percent) and without (69 percent) college degrees—believe trade agreements cost the United States jobs, a much smaller percentage of blacks and Hispanics without college degrees (both 37 percent) think that’s the case.

“This is education,” U.S.-style [ht: sm]—privately run, publicly funded, and irregularly regulated. . .

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Is education the solution to the problem of growing inequality?

As I wrote in early 2015,

Americans like to think that education is the solution to all economic and social problems. Including, of course, growing inequality.

Why? Because focusing on education—encouraging people to get more higher education—involves no particular tradeoffs. More education for some doesn’t mean less education for others (at least in principle). And providing more education doesn’t involve any structural changes in society—just more funding. (Of course, suggesting more education under current conditions—when public financing of higher education continues to decline, and students and their families are forced to take on more and more debt—is itself disingenuous).

As a result, there’s a broad consensus in the middle—among conservatives and liberals alike—that encouraging more young people who have yet to enter the labor market and existing workers who want to get ahead to obtain a college education will solve the problem of inequality.

And I proceeded to show how, in terms of declining wages for workers at various levels of education and increasing inequality within the top 1 percent, more education does not actually solve the problem of inequality.

But education is still the preferred solution of mainstream Democrats, and inequality itself is receiving less attention. And Thomas Frank [ht: sm] (in an interview with Jennifer Berkshire aka EduShyster) explains why:

Tom Frank: The Democratic party really doesn’t care about inequality because they’re now a party of the professional class: affluent, white-collar professionals. They themselves say this all the time; they talk about the professional class as being their constituency. But we don’t often try to put the pieces together and try to figure out, well what does it mean to be a party of the professional class vs. the working class? One thing it means is that inequality is seen as the natural order of things. In fact, professionals believe in inequality. They think of inequality as totally fair and the way things should be, and they think that because they themselves are the winners in the great inequality sweepstakes.

EduShyster: There are many great lines in Listen, Liberal, but one of my faves is that whenever the kind of liberal you’re describing stumbles upon an economic problem—say, the collapse of the middle class—s/he sees an education problem.

Frank: That’s one of the lines in the book that I’m quite proud of. The liberals I’m describing are an affluent group, by and large, who’ve done very well, and they attribute their success to their education. The professional class is defined by educational achievement. That’s who they are. They’re defined by how and what they did in school. So they look out at the rest of the country that’s going in reverse, at the middle class dream that’s falling apart, and they say *you know, it’s really your own fault. You should have tried harder in school. You should have gone to the right school.* But defining every economic problem as an education problem is basically a way of blaming the victim.

EduShyster: Here, allow me to repeat that for emphasis, but with italics to emphasize the condescension: you know, it’s really your own fault. You should have tried harder in school. You should have gone to the right school.

Frank: There is nothing that gives the lie to the meritocratic view of the world than what’s happened to humanities PhDs. These are people with the highest degree there is. They spent the most time in school of anyone. This is where the idea that education solves economic problems totally breaks down. I spent 25 years in school and got a PhD in history at the University of Chicago, a degree that used to be valued in the marketplace. But the marketplace figured out a way to casualize university labor. The whole idea of the professional, meritocratic way of looking at the world is that if you study, you’ll win—good things will come to you. I studied hard, and I got good grades and I got a PhD and my dissertation was even published. None of it made any difference. What my generation learned, and what everybody is starting to understand now, is that it’s not about education—it’s about power. It’s about power in the workplace. And we didn’t have any.

Basically, mainstream liberals, like their conservative counterparts, believe in “just deserts,” the idea that everyone receives what they deserve in capitalist markets. That means, if there are fundamentally unequal outcomes (which barely anyone attempts to deny these days), it’s because that’s what people deserve.

But of course some within the mainstream do believe inequality is a problem, if only because it might incite a reaction that calls into question the existing order. And that’s where conservatives and liberal begin to differ: whereas conservatives tend to want to eliminate government intervention (e.g., because it creates a dependency on social welfare programs), liberals look to education as the solution (to the problem of inequality as well as to issues of declining productivity, slow growth, and much else).

What neither conservatives nor liberals want to see is unequal power in the workplace—and that’s a problem more education simply can’t solve.

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Joan Robinson famously quipped, “the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”

In the United States right now, workers with a college degree, with an unemployment rate of only 2.8 percent, are forced to endure the misery of being exploited by capitalists; while workers with a high-school diploma or less, with an unemployment rate between 5.4 and 8 percent, have it even worse: many of them confront the misery of not being exploited at all.

That’s because, as a new report from Georgetown University’s Center on Education and the Workforce [ht: ja] makes clear, of the 11.6 million jobs created in the United States after the Great Recession, 8.4 million (72 percent) went to those with at least a bachelor’s degree. Those with associate’s degrees or some college education got 3.1 million (27 percent) of the jobs. The remainder, 80,000 jobs (less than 1 percent), were left for workers with a high-school diploma or less.

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Now, it’s true, Americans with only high-school diplomas represent a shrinking share of the workforce. This year, for the first time, college grads made up a larger slice of the labor market than those without higher education, by 36 percent to 34 percent, respectively. Including workers with an Associate’s degree or some college, workers with postsecondary education now make up 65 percent of total employment.

But the divided nature of the current recovery for American workers among themselves is even more stark.

Workers with a graduate degree (Master’s degree or higher) experienced no decline in jobs in the recession and maintained a stable employment growth throughout the recovery. Workers with a Bachelor’s degree struggled until the second half of 2011, but have since seen fast job growth, and in fact have exceeded the gains of graduate degree holders. . .Workers with a graduate degree have gained 3.8 million jobs since January 2010. Over the same period, workers with a Bachelor’s degree have gained 4.6 million jobs.

Workers with some college or an Associate’s degree have experienced a lot of volatility since 2007. They rode the recession to its depths, losing 1.8 million jobs. Those workers have now ridden the recovery back up; the economy recovered all those jobs by mid-2012. Over the next three and a half years, this group of workers experienced decent job growth, with a net gain of 1.3 million jobs since the beginning of the recession. Overall, this group of workers has added 3.1 million jobs since January 2010.

The workers who have suffered the most are those with a high school diploma or less. They lost the most jobs in the recession and have seen almost no growth in the job market during the recovery. They remain 5.5 million jobs short of their pre-recession employment level. Further, the current economic trends fail to provide any sign that those lost jobs will be returning in the near future.

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The growing gap in the job situations of college haves and have-nots is certainly part of a long-term trend, based on structural changes in the U.S. economy beginning especially in the 1980s. But their diverging trajectories since the crash of 2007-08 have only exacerbated the previous trends. That’s due in part to the precipitous decline in the construction and manufacturing sectors of the economy (which have still not recovered) and the fact that workers with college degrees or at least some postsecondary education have taken most of the new jobs at all skill levels: high, middle, and low. For workers with a high school diploma or less, low-skill jobs have been just about the only jobs available—and, even in those occupations, they’ve been forced to compete with workers with higher levels of education.

Here’s the problem: while would-be workers may be able to exercise some choice in obtaining more education (and thus jump over the gap between college haves and have-nots), they still don’t have any say in determining either the quality or quantity of jobs. Those decisions are still in the hands of the small group of employers at the top.

That means all workers—with or without college degrees—are forced to endure a choice between the misery of being exploited by capitalists or the misery of not being exploited at all. And that’s no choice at all.

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Special mention

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