Thinking About Education, Skills, and Work: Part 1

November 7th, 2011 at 12:58 pm

Just prepping for a talk on education and wanted to share some thoughts.

Too often, economists and policymakers have one recommendation to fix everything: more education.  And truth be told, I’m pretty much on board, but there are important nuances that tend to be left out of the discussion.

–Particularly when it comes to K-12, public policy often seems to be asking school teachers to fix all of society’s ills, while beating up on them for a) not all being above average, b) being in unions, and c) resisting accountability.  The fact is, kids increasingly arrive at school beset by a wide range of social problems generated by poverty and inequality.  That’s never an excuse for not having the best public system we can have, but don’t expect it to solve problems beyond its scope–especially when instead of retaining and improving the quality of teachers’ jobs, we’re laying them off.

–Do unions protect lousy teachers?  I’m sure some do some of the time, and I’m sure you see that same dynamic in the private sector.  I can tell you for a fact that the leadership of today’s teachers’ unions stand firmly against tenure for undeserving teachers.  But I can also assure you that some (not all) of the union bashing isn’t about better education.  It’s about union bashing.

–Re higher education, the consensus among economists tends to be that there’s a large skills mismatch between employers’ demands and the skills of the workforce.*  I don’t buy it.  The data from the BLS on occupational skill demands now and in the future actually matches up pretty cleanly with the supply of skill, at least at the level of educational attainment.  Yes, employers constantly say they can’t find skilled workers, but that’s kind of the point…they constantly say it.  If it were true, you’d see it in a more quickly rising compensation premium to workers with higher levels of education.  And you don’t really see that type of acceleration.  (Note: the emphasis on “acceleration” is important here—the fact that college workers are paid more than high school workers isn’t the issue—unmet skill demands imply an increasingly rising premium, and the college premium has actually decelerated in recent years, as this slide from EPI reveals–it shows the regression-adjusted college premium as flat since the latter 90s for women and rising more slowly for men.)

–But here’s the thing: I still think we’d have a better economy/society with higher levels of educational attainment…I’m quite certain, in fact.  It’s wrong to think that the jobs of the future all will demand wicked high skill sets—we’re going to need lots of home health aides, cashiers, security guards, equipment technicians, child care workers, along with high-end engineers.   But to have smarter, better educated people in all of those jobs makes all the sense in the world.  We want our child care workers and home health aides to be highly trained—not as Ph.Ds in robotics, but in their fields.

–The way to understand the nexus of education and the economy/jobs is thus not in the traditional skills mismatch framework.  That’s way too vague and disconnected from what’s happening on the ground.  Instead, think of an old-fashioned production function where better inputs generate better outputs.  Human capital is one of those inputs.  The way forward is thus not to just willy-nilly advocate for greater college attainment.  It’s to take a clear-eyed look at education and job/career training needs across the life-cycle.  The future surely requires kids with STEM training; it also requires health technicians with AA’s who can keep that MRI percolating the way it’s supposed to.  And child care workers who thoroughly understand how kids learn, and home health aides who know a lot about gerontology.

Much more to say about this so more to come.  Next: college access isn’t the whole story—it’s also about completion.

*Update: An economist friend who knows of what she speaks tells me that she doesn’t think most economists agree that there’s a mismatch between the supply of and demand for skills in the workforce.  She may be right, but I think it’s pretty widely held.   And there’s no question that you hear it all the time from employers and policy makers.

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13 comments in reply to "Thinking About Education, Skills, and Work: Part 1"

  1. Will says:

    The trend I’ve seen in postings is employers searching for a highly skilled technical and creative person with a large number of years of niche experience (industry experience isn’t enough), MBA preferred, starting salary less than what I got straight out of undergrad–3 years ago.

    I agree, if firms were rational, we’d see a higher premium for educated workers–but they aren’t looking for educated workers, they’re looking for candidates that don’t exist, or at least don’t exist in this market, they’re worth way more than they’re willing to pay.

    Employers, in general, seem to be sitting tight. I don’t think they’re that serious about hiring the superstars that work for peanuts they claim to be–these are trial balloons to see if there are any suckers that desperately need a job.

    Of course, I’m only speaking from the engineering perspective, where the job market is still great for people with the right skills–as long as they work hard to find the right job. Most of what I see is crud like I described above. The only good jobs I’ve heard of are through word of mouth.


    • comma1 says:

      Agreed. In this market, employers don’t want “educated,” they want “trained.” Employers are looking for people that have the education bona fides, and the experience of having — all ready — done the job for 2-5 years. It doesn’t matter what the job is, no matter how singular. It could be a nonprofit trying to save left-handed, German baboons, and that nonprofit will be looking for someone with a graduate degree and 2-5 years of experience working with left-handed baboons, who are German. (Please don’t send in resume if your experience is only with left handed European baboons or German baboons who are right handed… people with a graduate degree and 2-5 years experience with German ambidextrous baboons may be considered).

      Business is no longer willing to train employees on anything, including there own operations. At such a point, education is pointless, because businesses are effectively saying there are no qualified applicants.

      Already it is to the point where to get a dead end job, one has to convince the hiring manager that you’ve spent your whole life pursuing that dead end job, that every choice you’ve ever made was with an eye to becoming that paper pusher cog in the bureaucracy. Oh yeah, and you need to know someone there too. Obnoxious.


      • NoPolitician says:

        Mr. Bernstein, please consider looking at the picture a bit differently. Although I also agree that education for everyone is a great thing, realize that there are people for whom education is just not going to happen. Not everyone can be trained to be a nurse, or a skilled machinist. Some segment of the population will have little to no skills.

        We need an employment structure that provides jobs for this segment too. They don’t need to be paid upper-middle-class wages, but they should be able to have solid employment at wages that allow them to live a respectable life.

        Transfer payments to this group is not a good idea because human beings need a purpose in life. Instead of welfare, let’s give them jobs.

        In our transition to a highly-skilled economy, we have eliminated many of these jobs via automation, outsourcing, the pursuit of efficiency, corporate consolidation, and union-busting. Emphasizing education as the ticket to the economy winds up slamming the door on those who cannot achieve such an education.


  2. perplexed says:

    “For if effective demand is deficient, not only is the public scandal of wasted resources intolerable, but the individual enterpriser who seeks to bring these resources into action is operating with the odds loaded against him. The game of hazard which he plays is furnished with many zeros, so that the players as a whole will lose if they have the energy and hope to deal all the cards. Hitherto the increment of the world’s wealth has fallen short of the aggregate of positive individual savings; and the difference has been made up by the losses of those whose courage and initiative have not been supplemented by exceptional skill or unusual good fortune. But if effective demand is adequate, average skill and average good fortune will be enough.” -J.M. Keynes

    The republicans are right, we do have a spending problem; they’re just wrong about the direction. We’re not spending nearly enough to get out of this hole they put us in. We can afford to have 23% of our national income going to our 1% lottery winners but can’t afford to spend on education? Then they tell us the differences in income concentration are due to education instead of their disastrous tax policies. Evidently even Mankiw’s own students are walking out when he spouts this agitprop: http://community.nytimes.com/comments/www.nytimes.com/2011/11/04/opinion/oligarchy-american-style.html?permid=3#comment3 Too bad we can’t effectively measure gullibility; we’d really be setting some records.


  3. Peter Belenky says:

    You say, “I still think we’d have a better economy/society with higher levels of educational attainment,” a position that commands broad agreement, but then you fudge the point by retreating to the entrenchment of productivity. It may be true that the society would be more productive, but a BETTER society is defined in more comprehensive terms. Highly educated people are a valuable social product in themselves. Reduction of every social goal to a monetary scale reflects capitalism’s exaltation of the market and also the modern liberal reluctance to claim universality for personal preferences (conservatives have no such reluctance). If you assume that readers are counting the coins in their pockets, you may win them by offering to increase the hoard. If you think they are awaiting an appealing vision, why hesitate to offer one?


  4. the buckaroo says:

    …JB, look at the bottom of your shoe, you stepped in something. Free market capitalism does not give a hoot about poverty & inequality. In fact, it encourages said conditions as examples of pulling one up by the bootstraps…a one in a thousand event. Hey, if Bob can do it, anybody willing to work hard…’twas ever thus.

    That’s the American dream…and the opiate of the masses. You can’t tinker at the edges of a bad system. How about one based on a social democracy instead of foreign intervention?

    The same people that question a few billion for alternative fuels investment have no qualms in spending said amount on a weeks worth of war. Seems one party has an agenda…the other stands clueless.

    They shout squirrel…the crowd responds.


  5. Nancy cadet says:

    Mr Bernstein , I really appreciate what you wrote. Why can’t we have a better match between jobs and training as in Germany, union representation on corporate management, better social benefits? I’m a prof at an urban community college (having graduated from urban public schools and earned a PhD at an Ivy League school). Schools cannot cure all social ills, as you wrote, nor should “everyone go to college.”

    This isn’t elitism, but practicality.


  6. Jim Z. says:

    Fully agree with the point that a more broadly educated population is valuable as an end in itself. No one knows what set of events he or she will encounter during a long life in a complex society. A broad (preferably liberal arts) education is a must no matter what profession, career or job direction one may take. I wish that all young people took financial planning courses (& not ones run by insurance salesmen). We learn how to make a living, but we are seldom taught how to avoid being scammed by the financial sharks out there. And bring back history and american government with an emphasis on our constitutional rights. The idea that the population sat by as the Bushites trashed the constitution is a serious threat to our future.


    • Procopius Furioso says:

      I’m a going little off-topic here. Jim Z. says, “The idea that the population sat by as the Bushites trashed the constitution is a serious threat to our future.” You know, some of us are appalled that so many of those who shouted about Bush’s destruction of the constitution are strangely silent as President Obama continuew and expands those abuses. I was stunned at the Bush/CheneyAddington administration’s apparently conscious assault on the rule of law. I have also been stunned at Obama’s hypocrisy in proclaiming the rule of law while following policies that reinforce the utter lack of law for the elite. For example, John Corzine is obviously guilty of multiple felonies in that Sarbanes-Oxley required him to certify that his company had strong and appropriate controls, yet $650 million of his customers’ money cannot be accounted for. Therefore he committed felonies by lying on his certifications. Does anybody think he will be prosecuted?


  7. Michael says:

    The economists’ religion against Keynesianism — and the (implicit) belief that we have to actually have a public sphere — requires one to believe incredibly stupid things.

    Anyways, teacher union-bashing is about union-bashing. There may have been more to it before, but right now, the American middle class is eating itself out of loathing for the idea of itself existing.


  8. Robert says:

    Bill Mitchell recently posted a blog on his site entitled “The Skill Shortage Ruse Is Re-appearing”. He references a book (2002) written by Gordon Lafer entitled “The Job Training Charade” which exposes myths about job training which is the panacea for replacing direct public sector job creation as the answer to unemployment. Evidently, Lafer attributed the shift from the full employability framework to “supply-side” measures in denial of deficient demand.to the Ronald Reagan era. During the 1982 recession, Reagan repeatedly insisted that jobs were plentiful, but the problem was a lack of required skills.

    http://bilbo.economicoutlook.net/blog/?p=16629

    According to Professor Mitchell, The Job Training Charade clearly demonstrates that the reason there is unemployment (and underemployment) in the US is because there are not enough jobs created rather than a deficiency of skills. The professor says “Lafer exposes the so-called link between human capital development (education) and wage outcomes saying that the “the relationship between education and wages is extremely weak”. Further the professor suggests that “the ‘skills gap’ narrative is a ‘political strategy’ rather than a ‘policy issue’ designed to garner public subsidies for business. That is, it is part of the overall strategy to glean as much public support for private profits as is possible while at the same time denying public support for job creation.”

    The following is a quote by Lafer in his overall conclusion:

    “Whatever the problem, it seems job training is the answer. The only trouble is, it doesn’t work, and the government knows it … Indeed, in studying more than 40 years of job training policy, I have not seen one program that, on average, enabled its participants to earn their way out of poverty.”

    Bill Mitchell puts the blame on a deliberate neo-liberal agenda “To deflect our attention from the fact that our governments were willingly overseeing a systematic shortage of good jobs and new agendas emerged to reinforce the ‘individual’ is to blame narrative. Much of the skills shortage narrative fits into that broader neo-liberal agenda.”


  9. Jeff Carter says:

    You write, “I still think we’d have a better economy/society with higher levels of educational attainment…I’m quite certain, in fact. It’s wrong to think that the jobs of the future all will demand wicked high skill sets—we’re going to need lots of home health aides, cashiers, security guards, equipment technicians, child care workers, along with high-end engineers. But to have smarter, better educated people in all of those jobs makes all the sense in the world.”

    I understand why employers have an incentive to perpetuate the idea that a skills deficit is a substantial reason for high unemployment, but job training and higher education advocates hold this position as well. I think there are two reasons for this:

    First, because those jobs that you mention (health aides, cashiers, security guards etc.) are low-wage jobs with minimal opportunities for advancement — in many areas they do not even pay a sufficient living wage. So I think skill-building/college-for-everyone proponents look a those low wages, and look at the average wages of those with higher levels of educational attainment, and figure we need to get more people into the jobs associated with higher levels of educational attainment so that more people can earn a living wage.

    Second, because at a micro level, I wonder if the skills deficit problem might be true, even if it’s not true for the economy overall. It’s not hard to imagine localities where there is a single industry or two where the existing jobs are demanding higher and higher skills due to technological changes, or where traditional manufacturing jobs have disappeared and been replaced by jobs that require college degrees.

    I think everyone should have equal access to a good education, including higher education, and that people should be encouraged and supported to go as far as they want to go with their education. That would lead to a country with “smarter, better educated people” that you describe, which would be better for not only our economy, but for our society overall. Wondering what job training/education policies you would suggest to move us in that direction. And, even if the skills deficit argument is wrong, broadly speaking, do you think it could make sense at the local level in some cases? If so, does that at least justify *targeted* efforts to move more people into adult education, postsecondary, and job training in certain locations?


  10. Kathleen Wright says:

    A couple of observations in response to your post on education…
    • College readiness is not just about higher education and career paths; it is about having the knowledge needed to understand one’s world well enough to negotiate one’s self interest successfully. Undereducated children are more prone to misread situations and act rationally using a primitive analytical model. Their decision trees are missing so many branches that they may be doomed to frustration and failure in many aspects of life as they miss opportunities or take poorly calculated risks. Failure to learn in school predisposes them to take the same approach as adults, seeing the world as chaotic and themselves subject to luck, popularity, or brute force. Instead of controlling their destinies in a world of possibilities, they tend to seek to control their inner circles in an ever-decreasing sphere of influence. Education is the key to breaking that failure cycle.
    • Union-busting and bad teachers are the sideshows of a larger leadership crisis in education. School leaders remain caught up in the teacher’s-pet/dunce-capping approach to human resource management. Teachers are natural leaders, but there is very little management development within the field. Instead, revolving doors of role models, usually newcomers among teachers, are put on a pedestal for the rest of the faculty to emulate. The longer one remains in the profession, the more one is likely to be ignored and allowed to stagnate. Seriously, my take on the deadwood in the system is that it was killed by benign neglect. A robust system of goal-setting and regular reviews would go a long way toward fixing the problem before it becomes worrisome. The calls to the union often begin with sudden negative feedback and a desire to protect one’s pension. Earlier dialogue could have headed off the power plays.
    My approach to education reform would include pension portability, general management education for school leaders, and continued pursuit of college readiness as a prerequisite for transferring the stewardship of lifelong learning from the school to the young adult. And a few other things…


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