The Real Economic Issue
As Obama turns to address economic issues this week, David Brooks has an interesting column that suggests that the most important factor in improving our economic future is education, which research shows has steadily declined since 1970:
In “Schools, Skills and Synapses,” Heckman probes the sources of that decline. It’s not falling school quality, he argues. Nor is it primarily a shortage of funding or rising college tuition costs. Instead, Heckman directs attention at family environments, which have deteriorated over the past 40 years.
Heckman points out that big gaps in educational attainment are present at age 5. Some children are bathed in an atmosphere that promotes human capital development and, increasingly, more are not. By 5, it is possible to predict, with depressing accuracy, who will complete high school and college and who won’t.
I.Q. matters, but Heckman points to equally important traits that start and then build from those early years: motivation levels, emotional stability, self-control and sociability. He uses common sense to intuit what these traits are, but on this subject economists have a lot to learn from developmental psychologists.
I point to these two research projects because the skills slowdown is the biggest issue facing the country. Rising gas prices are bound to dominate the election because voters are slapped in the face with them every time they visit the pump. But this slow-moving problem, more than any other, will shape the destiny of the nation.
Most of the economic discussion seems to focus on holding onto jobs in a globalizing economy and creating new jobs by developing new technologies, but no one seems to be willing to consider the possibility that Americans don’t have jobs because they don’t have any marketable skills. Why is education still so far down on the ’08 issues list?
Eric: This is a very important issue. Lots of thoughts, but my kids are killing each other with pillows downstairs and so I will get some brief responses down and continue after I cool the guys off at our local pool.
1) The foundational economic issue may indeed be education, but the foundational public policy issue is housing. The reason that we have such a divide between the educational haves and have nots is that we have succeeded in geographically isolating those with the most educational strikes against them. Mix housing so that kids with high levels of educational expectation and achievement are common in every school, and so that standard role models are not contrary to educational success, and educational conditions would improve dramatically.
2) Lefties are not in a good position to appreciate the importance of human capital in the form of ideas that must be learned and imagined for modern economics. They either think it is all about labor, or they think it is all about physical capital that must some day soon run out. Ideas on the other hand have driven our economy for at least the last 200 years, and it is the “spillover” character of ideas that have fueled economic growth. Ideas create wealth, and they often do it for free. A great book that explores the economic theory of Paul Romer and Robert Lucas, two economists who seem to be ahead of the curve on this, is Knowledge and the Wealth of Nations by a guy named Warsh (first name escapes me, Neal Donald, I think).
3) Recently, I was reading Globalization and Egalitarian Redistribution, edited by Pranab Bardham, Samuel Bowles, and Michael Wallerstein, and I came across an argument along the lines that Brooks is making, but with lots of research to support the claims. What was most interesting is that the authors see a strong case for social insurance policies that are promoted on the grounds that they increase economic efficiency and so improve our position in the global market. The importance here is that too often those who support social insurance policies and wealth redistribution to the poor do so through “inefficient” means like taxes, and they also combine their social efforts with opposition to economic globalization and appeals to efficiency. In doing so, it seems to me, they lose leverage on behalf of their cause.
4) Again, the issue is ideas and innovation. Paul Romer in particular is an advocate of significant government intervention in pure research because he thinks that the outcome of such research pays huge dividends in economic productivity.
5) If you are at the SCE in Chicago, I will be giving a paper on all of this.
Off to the pool!
In the 1950s, Jacques Barzun wrote a preface to a book about the dangers of the Publish or Perish syndrome, and the obvious biased promotion habits in American colleges. He opined that few, if any, of his academic colleagues would read the book, frozen as they were in their own prejudices. He was correct.
He castigated [though more gently] the habit of confusing colleges with research institutes. Research institutes were where the [federal] money is.
Later Thomas Sowell wrote INSIDE AMERICAN EDUCATION. He noted that the chief problem was the ineptitude of the teachers. They did not know enough math or have enough reading skills [which derive from the study of foreign languages] to be able to teach pupils. One has but to read the jargon loaded reports of the National Education Association to realize the truth of this assertion. I recollect that my daughter [though a female] was doing fine through the sixth grade with the new math. This was stopped because the teachers could not grasp it.
Makings its way around the Internet is an 8th grade test of 1895 from Salina KS.
[http://mwhodges.home.att.net/1895-test.htm]. You may embarrass yourself if you take it.
Brooks mentions that the Republicans are largely irrelevant on these issues. What about the Republican emphasis on doing away with affirmative action in higher education [see McCain favoring Az. proposition doing that] They worry that a minority might get an acceptance ‘aceing out’ their child or nephew. They ignore the 50% H.S.drop out rate for African American and Latinos That position makes the Repub. view not just irrelevant but dangerous.
Education strikes me as crucial, but in two ways:
-across this country, there seems to have been a loss of love of learning in many corners; it’s not “cool” to be a “geek” or “nerd.”
-for poor minoroities, poor schols hurt teribly -Stephen L. Carter had a neat op-ed a couple of Sundays ago on poverty being a major factor in black division and how poor blacks suffer from the get go.
I was strongly reminded of Jonathan Kozol’s excellent “Savage Inequalities” of a few years back.
So I guess I think we’ve not only value educational goals more to our youth bu talso provide the schols for everybody we can to make such learning posible.
I agree with those who have noted the crucial role of education, for the economy and for the public good, but I fear the educational problems Brooks and others have highlighted will persist until there is a paradigm shift in attitude. Educators must be recognized for the indispensable role they play in society, and education as a career must be held in the same esteem that many hold professions such as medicine and the law. Educators at all levels–primary, secondary, and tertiary–need to be paid better so that the financial realities of life don’t sap their enthusiasm for molding minds. If this means paying more taxes, then so be it. What could be more important to the general well-being of society than an educated populace?
And while the educational issues in inner cities and other economically-depressed areas might seem intractable, there are people thinking outside the box about how to address those problems. For example, the University of Notre Dame has a program called ACE (Alliance for Catholic Education) that offers a free masters degree in education to graduate students willing to teach for two academic years in under-resourced Catholic schools across the American South. The teachers are paid a stipend, and they attend ND during two summers to complete course work for their degrees. Someone needs to be complimented for coming up with such a win-win idea. Hopefully, the graduate students will be motivated to remain in the teaching profession, and we could all give them more reason to stay with education if we were to recognize and praise education as among society’s highest and most important callings.
Thank a teacher today. ;)
Hi, William, one of our good friends has a daughter who participated in the ACE program, I agree that it’s wonderful and deserving of all your kudos.
Regarding the link between education and jobs: I’m sorry to read from the free-enterprise crowd’s playbook here, but the key to creating new jobs is entrepreneurship. So long as entrepreneurs are willing to take on the risk of failure in order to pursue whatever reward they want – wealth, or family security, or making the world a better place, or interesting challenges, or whatever drives them – jobs will be created. I’d think that we’d want to teach our students the skills that allow them to function as entrepreneurs, and create a business/legal/financial environment that supports entrepreneurship.
The premise of Brooks’ article seems to be that our work force lacks the education or skills to compete. But the “offshoring” of jobs to India, Ireland, Kazakhstan, Mexico and so on is not driven primarily by a skills gap between what entrepreneurs demand and what the American labor force supplies. It’s driven by a wage gap, i.e. labor is cheaper outside our borders.
Bob, William, and Jim all make good points. But I want to emphasize the four points made by Brooks as lacking in varying degrees in students coming to school today. These being motivation, emotional and social skills, and self-control.
What is different today than in 1970? Prior to 1970, Nuclear and extended families imparted these skills to children by the time the kids were 6 years old. School enhanced and built on these skills but did not have to inculcate them into the students. Today, widened programs in Health, multicultural ed., bullying, internet responsibility, career building, etc. all subtract from the teacher’s time skill building in the classroom.
Why is society have a mortgage meltdown? Is it because we are not imparting rudimentary economics to our young. Have we gone our own merry ways only to let our children down? Barak Obama was on to something when he got after absentee Dads on father’s day. Engineers and other professions will continue to come from other countries until we can impart the news that education takes discipline and hard work. Technology is great, but it can’t replace the hard work of learning.
Hi, Denise, by way of agreement, I have yet to talk to a teacher who thinks that No Child Left Behind’s regime of mandated standards and testing is the solution to flat or falling student performance. And these aren’t education-union stalwarts repeating the party line – they’re good, experienced, dedicated teachers who know that a teacher can only accomplish so much in the classroom, and that factors in the home are at least as important.
It isn’t simply education, either. My father was a managerial type for old-line manufacturing companies. He talked about the sociological changes in the adult blue-collar work-force from the time he began his career in the ’50′s until he retired in the ’90′s. The traditional picture of the blue-collar worker whose cornerstones were hard work and devotion to family had changed dramatically in that time. Just an anecdotal observation, but I’ve seen it, too. The world changed somehow.
Jim:
Although few realized it at the time, the 1970s began a period in which ordinary workers shared to a lesser extent in the economic good fortune of their companies. The average wage adjusted for inflation rose less rapidly than it had in the immediate post World War II period. Companies began firing more workers during economic downturns, rather than laying them off but then recalling them when the economy improved. In the period, 1970-1990, good, unionized, manufacturing jobs declined (at least in relative terms).
So maybe there is a connection between the increasingly raw deal that blue-collar workers got from their employers and the decline in dedication to hard work that your father observed. Some people even think there is a connection between the loss of well-paying manufacturing jobs and “devotion to family.”
B.H.–However parents should encourage their children to go into fields that need workers—construction, health care, accounting, and anything related to technology, as well as nursing and teaching. In our nations zeal to open trade agreements with other nations, some of these pacts have been tied to employing foreign workers in our country. This year is our time to vote for the person we think is going to stand up to fairness in our trade agreements.