Election '08 Meets The Great Education Myth

Regular readers know my frustration with what I previously deemed The Great Education Myth in an op-ed for the San Francisco Chronicle. This myth, omnipotent in our media and political debate, states that America's problem with stagnating wages, job loss and benefits cuts is a problem of education. If only workers were better educated, the myth goes, their economic problems would be over.

This myth, which is a lobbyist creation designed to divert political pressure away from reforming labor, trade and economic policies, was most recently vomited up by a top editor and "expert" at one of the largest magazines in America - and then obliterated by government data and at least one leading presidential candidate.

That's right, the latest regurgitation of the myth comes from none other than U.S. News & World Report's chief financial reporter, James Pethokoukis. In the midst of an article asserting that "income inequality may actually be a good sign," this brave defender of royalism flippantly claimed "It really is all about education." He went on to state:

"Advanced economies, whether America's or Denmark's, are knowledge economies. And knowledge economies reward education. Get a degree, expand your skills, and you will do just fine."

Pethokoukis, in a non-sequitur, cites one macro unemployment stat, but offers up no actual data to support his central claim that if you just "get a degree and expand your skills you will do just fine." This is one of the top editors of one of the supposedly most Serious magazines in America regurgitating lobbyists' Great Education Myth without even bothering to check the most easy-to-find data - data reported in publications that are not exactly bastions of anti-capitalist sentiment.

Fortune magazine, for instance, recently reported that economic data proves that "the skill premium, the extra value of higher education, must have declined after three decades of growing." Specifically, "the real annual earnings of college graduates actually declined 5.2 percent, while those of high school graduates, strangely enough, rose 1.6 percent." Similarly, Businessweek has reported that "real wages for young Americans with a bachelor's degree have declined by almost 8% over the past three years" and "economists suspect that global competition has something to do with it."

That's an understatement, as shown in a stunning new report out today from the good folks at the Economic Policy Institute. Using government data, the think tank finds that "the educational group most vulnerable to offshoring are those with at least a four-year college degree." That vulnerability helps drive down wages for better-educated workers because they know that if they try to demand good pay, their employer could simply pick up and leave.

Obviously, this has everything to do with America's corrupt NAFTA-style trade policy - a policy that the U.S. House ratified last week in its vote for the Peru Free Trade Agreement, and that now awaits Senate ratification. This trade policy without enforceable labor, wage, environmental, human rights or product safety standards encourages large corporations to manufacture a race to the bottom in which workers have to keep accepting lower and lower wages (or other standards) in hopes of keeping their employer in their country.

This ain't rocket science to understand. Sure, we should all support improving our education system, because better education is just a good thing. However, it is not a cure-all to our economic challenges - not even close. No amount of education and retraining can overcome the effects of unfair trade agreements. And no amount of "customizing", to use Clinton administration jargon, by an American worker can beat an equally "customized" Chinese or Indian worker, particularly when such workers earn pennies, rather than dollars, per hour.

As I said to start, the Great Education Myth is a corporate creation. It exists to distract the public from demands to change our trade and economic policies so as to raise up all workers. If Big Business can get us all to be mad at the education system alone, then theoretically we won't demand serious populist reforms of an underlying economic system that is currently benefiting the Big Money players in Washington, while crushing the rest of us.

Now, the whole Great Education Myth is hitting the presidential campaign trail. Both Sen. Hillary Clinton and Sen. Barack Obama have announced their support for the NAFTA-expanding Peru trade deal all while - rather shockingly - engaging in a true Theater of the Absurd by continuing to tell union audiences that they oppose the NAFTA trade model. John Edwards, by contrast, has come out strongly against the Peru deal, and yesterday issued a statement tying the upcoming Senate vote on that trade deal to the Great Education Myth and the Economic Policy Institute's report. Here are some excerpts:

"Today, the Economic Policy Institute issued a report that should come as a clarion call to everyone concerned about the impact of unfair trade agreements and practices on America's working families. In their report, the EPI concludes that between 25 to 30 million American jobs -- about one in five American jobs -- in states all across the nation, are at risk for being offshored over the next decade. And it's not just manufacturing jobs - the report shows those jobs that require at least a four-year college degree are actually the most at risk. This report makes clear what the labor community has known for far too long: bad trade deals, cheap foreign labor, illegal foreign subsidies and foreign currency manipulation are having a devastating effect on American workers...Given this reality, I find it alarming that Senator Clinton and Senator Obama have chosen to support a flawed Peru Trade deal that will only further expand the NAFTA-model that has already cost us well over a million jobs."

How this plays out on the campaign trail is anyone's guess. As we see from Pethokoukis's piece and from many other political pundits like him, the Great Education Myth is such unquestioned orthodoxy among our elite media and politicians that it has become an assumption that is flippantly forwarded without even a flinch toward basic factual substantiation.

That means candidates like Edwards (or anyone other such populist) who dares to challenge the Great Education Myth and the Washington Consensus in support of NAFTA-style trade policies face not only hostility from other candidates chasing down Wall Street cash, but hostility from what is supposed to be an objective political press corps.

Cross-posted from the Campaign for America's Future

Comments

[Historybuff]

Sigh... Never thought I'd be defending the Clintons.

I am in my upper 50's, have a degree, been laid off, gone back to school, and am working again... it is tough and I can sympathize with anyone (especially over 50) that is trying to get ahead in our country. Trouble is this:

If Widget1 can be produced in Asia for $10.00, and same Widget1a is produced here in America for $12.00, it is a no-brainer where the most Widgets are going to be manufactured. NAFTA simply acknowledges that fact, and tries to retain control of Widget manufacturing with countries in the USA.

Again, life is tough - but I don't want to make it tougher by following some Socialistic scheme of artificial economics. A Recession is a lot better than a Depression.

[DrZinTO]

You may have heard the Disraelis quote "there are lies, damn lies, and statistics". Then again, maybe not. Your quote from Fortune..."the real annual earnings of college graduates actually declined 5.2 percent" is a statistic without meaning. More useful would be the percentage change as a function of major.

You, and perhaps Pethokoukis too, confuse getting a degree with getting an education...as in the ability to actually do something useful.

As a former manager of a High Tech consulting firm for over 20 years, I had difficulty finding qualified US employees...even with graduate degrees. Sure, employee cost is an issue that results in outsourcing. But the other side of that issue is the qualifications, capability, and attitude of many Americam workers.

Our education system sucks...at all levels. Why does it cost so much???

[grabowcp]

Sigh...

1. Opposing free trade is immoral. If I want to buy a product from overseas or employ a person in another country that should be no one else's business.

2. Why are progressives preaching economic nationalism? Shouldn't we look at people as people first regardless of their citizenship? If an American middle class person loses their job and someone living a dirt-poor existence in Vietnam gains it, why is that a bad thing? Is wrapping the progressive cause in the red, white and blue really a good tactic? Do progressives want to emulate Pat Buchanan?

3. Fact: Free trade has expanded greatly in the last 15 years. Fact, unemployment in the US is lower now than 15 years ago. If free trade produces unemployment then how is this explained?

4. If wages are being depressed then why did the median net worth of U.S. households jump from $70,800 to $93,100 from 1995 to 2004? (similar points in the business cycle BTW)

5. If we are engaged in a race to the bottom then how to explain the worldwide prosperity boom of the past 10 years? How to explain the number of people, especially in the developing world, that have been raised out of poverty? Isn't that cause for celebration?

6. Yesterday I walked 2 blocks through a major US city and passed at least 5 ATMs. In the CVS near my office there is a self-checkout machine. All of those machines represent potential jobs that were either lost or not created. Should we call for a halt to technological progress, which has eliminated huge numbers of working class jobs? Why is it OK to lose jobs to machines but not people in other countries?

7. Americans are experiencing wage pressures due to increased competition from illegal immigrants, who work for less. Are progressives to also wrap themselves in this cause and embrace the likes of Tom Tancredo? After all, it should make little difference if a foreign national takes a job either here in the U.S. or in their home country.

I eagerly await responses!

[RobertArend]

With apologies to Mr. Stern for the "Jerry" instead of "Andy" Stern in my last comment on this blog.

Sincerely,

BobertArend

__two hats

[RedRooster]

The Economic Policy Institute notes that, "...bad trade deals, cheap foreign labor, illegal foreign subsidies and foreign currency manipulation are having a devastating effect on American workers..."
_________

But the same bad trade deals, are having a terrific effect upon the investment portfolios of the financial plutocrats and the ruling aristocracy...and so we'll have more of these bad trade deals until we have a populist revolution demanding real change.

Wake Up America!

[IronDragon]

Right on again, Mr. Sirota. Along my worker trail my job was outsourced twice and my department was downsized once. Those were three good jobs lost (for myself and others) and a 4-year degree helped not one whit.

I fear, however, that while you say lower economic classes must have circumstances changed, you fail to name what it is that will replace what we are forced to bear at present. May I submit workers and capitalists alike will require a version of socialism in order for progress to continue?

Perhaps social capitalism?

If something is not done to alleviate suffering and abuse among human populations, you can bet there will be uprisings and revolutions in the decades to come. The policies of rapine capital and robber barons are doomed.

[unemployedprogressive]

Another great post David. Just as relevant is a similiar problem that nobody is discussing. I have committed the unforgivable sin of turning 50 and am apparently unemployable. I have 2 degrees and over 24 years technical job experience. No one will even interview me for a job let alone offer me one. I routinely apply for jobs that pay half what I was making in my previous position and after hundreds of resumes & applications I might get an interview once every 6 months. Since I've been unemployed for over 4 years, I am not even counted as being unemployed.

[RobertArend]

So, what is the deal with my own AFSCME union? Where is Gerald McEntee's solidarity with private-sector workers. Does AFSCME not recognize that the jobs of public employees across this nation are dependant on good-wage jobs with healthcare benefits for those not employed by government?

A private-sector employee earning $20 an hour pays the taxes that a minimum wage employee can never be expected to contribute.

As more and more family sustaining jobs leave this country, so, then, must government reduce their own workforce.

President Clinton gave us NAFTA. Now his wife hammers another nail into the coffin of the middleclass with her support for the Peru Fair Trade Agreement.

As much as I have been critical of Jerry Stern for dividing the AFL-CIO, he is at least allowing the members in the individual states SEIU represents to determine for themselves who to endorse. Perhaps that action clears away all the smoke over Stern's reasoning for fracturing the House of Labor. And maybe my criticism was missplaced.

I am not ready to surrender my conviction that Stern should have worked within the AFL-CIO for change, but I am so very close to an apology.

__two hats