Wednesday, August 31, 2005

Us dumb 'mercians

American Prospect: Skills Setback

The other common response, like the one from Treasury Secretary John Snow, is to blame the victims -- the “less-educated people,” in his words -- whose lack of skills and smarts have blocked them from cashing in on an otherwise broad-based recovery. Opportunity abounds, according to this argument, if you’ve got the gumption and education to grasp the brass ring. Snow’s undersecretary, Randal Quarles, amplified the point. "If the country as a whole is going to undergo economic growth,” he said, “then the population has to be able to take advantage of opportunities.”

Sounds reasonable, given the constant drone by economists, policy-makers, and central bankers (e.g., Alan Greenspan) about the skills deficits of the U.S. workforce. But there are two fundamental problems with this view.

First, it’s not true. If it bothered to look at the actual trends in employment rates -- the share of a given population at work, and a proxy for that group’s job opportunities -- the skills crowd would learn that since the last economic peak, March of 2001, they’re up for one educational group (high-school dropouts) and down for everybody else, including college graduates.

This doesn’t mean we should all become dropouts. Obviously the more education you have, the better off you’ll be. But even with its recent uptick, job creation has been persistently weak in industries that hire lots of college graduates, like information technology. The Congressional Budget Office also made this point in its recent analysis of the problem.

Moreover, college-educated workers have not escaped the broad deterioration over the last few years in real wages. According to Bureau of Labor Statistics figures, college graduates’ weekly earnings grew 0.9-percent less than inflation did in 2004.

Runaway globalization and destruction of Wages and Jobs have been possible politically because most voters thought they were profiting at someone else's expense. Once it becomes clear that most workers are getting screwed maybe that will change. "Ask not for whom the bell tolls, it tolls for thee"

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