THE BLOG
03/08/2016 11:13 am ET | Updated Mar 09, 2017

Trump, Sanders Supporters: Poor Education, Not Wall Street, is the Problem

Supporters of Donald Trump and Bernie Sanders have something in common: They are angry because they think their country has been hijacked and the American dream is in great danger. Sanders' many young supporters look to the future with fear -- burdened with college debt, doubtful that government benefits will be available when they need them, and convinced their fate is due to greedy Wall Streeters and corrupt politicians feeding at the corporate trough.

Trump's mostly older supporters also see an economy rigged by the super-rich, a deeply corrupt establishment, and government benefits they rely on slipping away. They are further angered because having been in the workforce longer, they have witnessed decent jobs drain away to low-wage countries, and are only qualified for jobs that pay well below a middle class wage and often are filled by immigrant workers.

Sanders and Trump propose vastly different prescriptions for fixing our economy and country, but the problems they identify, with the exception of immigration, are pretty much the same.

Yet these two standard-bearers and their followers misdiagnose the main cause of our nation's malaise. Even if all of our economic and political problems are solved, we will still be in this mess because we have failed to adapt our education system to the demands of a changing world.

The single most important reason the U.S. became the world's most successful economy in the 20th century was that it extended education to the masses faster than any other industrialized country. By the mid-1900s, our workforce enjoyed more education than anyone else. But now, according to an ETS analysis of OECD data, the millennials in our workforce are among the worst educated in the industrialized world. If it was education that put us on top, it is the lack of education that is bringing us down.

That is because most of our high school graduates have no more than an 8th grade level of literacy, while the OECD tells us that the average student in many top-performing countries is two to three years ahead of our students, and even some very poor nations are churning out high school graduates who are as literate as ours.

At the same time, over the last 50 years, cheap shipping and inexpensive and reliable communications have made it possible for all countries to buy goods and services from whomever can supply the quality of labor needed to produce them at the lowest cost. The bottom line is that we are asking more than global employers are willing to pay for workers who possess only basic literacy skills.

We're not the only ones in trouble. China dragged more people out of poverty faster than any country in history by offering dirt-cheap labor to this new global labor market. As China got richer, they paid their people more, which raised labor costs. As a result, other, poorer countries can now outbid them, while Chinese manufacturing workers are being put out of work by robots that can do the same work cheaper and more reliably. If it's cheaper to hire robots than people in coastal China, what will that mean for less educated American workers who charge about four times as much for their labor?

As Sanders proposes, we can raise the minimum wage to $15 an hour, but then our manufacturers will have a bigger incentive to automate those jobs. We can make college free, as he advocates, but who will pay the bill when manufacturing and highly paid services are being performed by ever-smarter machines and better educated and trained people elsewhere? Or, as Trump argues, we can pass giant tariffs to keep goods and services out, but the rest of the world will retaliate by raising equally forbidding tariffs against our products, and millions will be thrown out of work.

We have nothing to fear from outsourcing to countries that produce something we want if they can do it cheaper, as long as they are willing to pay us for things they cannot do for themselves. We have nothing to fear from automated machinery as long as we can do things people want done that machines cannot do. But we cannot meet the outsourcing or automation challenges unless we once again have one of the best-educated workforces on earth.

Beating up on Wall Street, building walls around our country, making college free, hiking tariffs, and raising the minimum wage may make us feel better. But it won't change the fact that we want the world to pay us more than our skills are worth on the global labor market. If we don't fix that fundamental flaw, our country's future will be very bleak.