Educating Our Way Out of Inequality?

In my first year of law school, a group of students created a farcical candidate for President of student government and posted some rather hilarious campaign posters supporting him. In one poster, he pledged to enroll 6,000 additional mythical students so that all the real students could be in the top 10% of the class.

I’m reminded of that farcical campaign every time I see a conservative or so-called moderate advocate that we focus on education and worker training and let inequality take care of itself. Here’s David Brooks of the NY Times in The Temptation of Hillary:

On an individual level, getting more skills is the single best thing you can do to improve your wages. The economic rewards to education are at historic highs. Americans with a four-year college degree make 98 percent more per hour than people without one. The median college-educated worker will make half-a-million dollars more than a high-school-educated worker over a career after accounting for college costs. Research by Raj Chetty of Harvard and others suggests that having a really good teacher for only one year raises a child’s cumulative lifetime income by $80,000.

I don’t question Brooks’ statistics, but they do nothing to support his argument. Note his opening premise: “On an individual level…” Of course that’s true on an individual level, but that doesn’t mean a massive increase in education levels would lift everyone up. Employment is demand driven, not supply driven. Increase the supply of workers trained in a given field and the incomes of those workers decrease. We can’t all be heart surgeons. Or accountants. Or engineers.

I’m frankly not sure whether Brooks is intellectually lazy, intellectually dishonest or a little bit of each. He emphasizes three times that above all else worker productivity is key. Has he never seen the graphic productivity and wages that I’ve seen at least one hundred times? You know, the one where productivity and wages are closely correlated until 1980, at which point productivity continues to increase steadily, while wages flatline?

Sorry, David, we don’t have a productivity problem in America.

Which brings me back to my law school student government election. Unless we can create about a billion mythical households to fill the bottom 90% so the 100 million or so real households all can be in the top 10%, Brooks’ plan won’t work. If every adult were college educated but we didn’t increase the minimum wage, there still would be McDonald’s workers living below the poverty level. They’d just be better educated. Actually, some McDonald’s workers already fit that description.

Amazingly, Brooks comes tantalizing close to recognizing the flaw in his argument. He notes, correctly, that “wages for college grads have been flat this century.” He then notes that the is “not true of people with post-college degrees, who are doing nicely.” How hard would it have been for him to take the next few baby steps in the logic? If more Americans had acquired college degrees this century, the wages of college grads would not have been flat, they would have declined. If the supply of people with post-college degrees were comparable to the supply of those with college degrees, they wouldn’t be doing so nicely either. Don’t’ believe me? Go ask a recent law school grad who can’t find work in the legal field because the supply of new law school grads each year is running about double the number of entry-level legal positions. .

The impetus for Brooks’ piece was that he sensed Hillary was de-emphasizing what he calls “human capital progressivism” and focusing instead on “redistributionist progressivism.” This concern undoubtedly was triggered by remarks Lawrence Summers made on the subject, which were quoted in a piece by Thomas Edsall of the Times earlier in the week: Establishment Populism Rising. I’m not a huge fan of Summers generally, but I thought he acquitted himself well on this front. Edsall:

“The core problem,” according to Summers, is that “there aren’t enough jobs, and if you help some people, you can help them get the jobs, but then someone else won’t get the jobs. And unless you’re doing things that are affecting the demand for jobs, you’re helping people win a race to get a finite number of jobs, and there are only so many of them.”

He adds that he is “all for” more schooling and job training, but as an answer to the problems of the job marketplace, “it is fundamentally an evasion.”

Okay, put Edsall’s first paragraph above next to the block quote from Brooks up top. You would think it was Brooks who spoke first, with Summers responding, quite effectively in my mind. In reality, it was Summers who spoke first, on February 19th. Brooks very clearly had read the Edsall piece, so why did he blithely go forward with his “on an individual level” explanation? Because his argument for a focus on “human capital progressivism” depends on it, so he can’t get into the mundane matter of whether or not it makes sense.

There’s another passage from Summers that easily could have been directed to Brooks, were it not uttered prior to Brooks’ op-ed:

In a follow-up email, Summers took note of Dean Baker’s assertion that Summers had changed his views, replying that John Maynard Keynes is said to have responded to a similar question by saying ‘when the facts change, I change my mind. What do you do sir?’ Much has changed since the 1990s, including protracted shortfalls in demand, a dramatic decline in labor’s share of income, the pulling away of the top 1 percent, the possible emergence of secular stagnation, and the financial crisis. So of course my policy views have evolved.

So, focusing on the bolded question, Brooks and too many others in influential positions do not change their minds when facts change.

And that’s a huge problem.