Education for an old economy
What worries me the most about the direction education policy is taking is that it seems increasingly disconnected from the economy of today and tomorrow. That we are trying to align education to an economy of stable jobs and occupations in an economy where both are increasingly unstable because of globalization and technology. And even when a job or occupation is stable the skill requirements of doing that job –– and therefore staying employed –– are constantly changing largely because of smarter and smarter machines.
What is most distressing is that this focus on skills needed to get an immediate job seems to be mainly driven by policy makers trying to meet the needs of Michigan employers who are having trouble filling some jobs rather than the long term needs of students. P-20 education –– from early childhood through an undergraduate degree –– should be focused on building the broad skills that will give students the best chance for a forty year career, not a first job.
Not building broad skills that allow one to constantly adjust to a changing labor market, clearly will effect both the employment and earnings of individuals. But also will hold back Michigan’s and the nation’s economy. As Claudia Goldin and Lawrence Katz demonstrate in their must read book, The Race Between Education and Technology, human capital is a prime driver of economic growth.
Thomas Friedman writes in a New York Times column entitled “It’s P.Q. and C.Q. as Much as I.Q”:
Alas, though, every boss now also has cheaper, easier, faster access to more above-average software, automation, robotics, cheap labor and cheap genius than ever before. That means the old average is over. Everyone who wants a job now must demonstrate how they can add value better than the new alternatives. When the world gets this hyperconnected, adds (Microsoft’s Craig) Mundie, the speed with which every job and industry changes also goes into hypermode. “In the old days,” he said, “it was assumed that your educational foundation would last your whole lifetime. That is no longer true.” Because of the way every industry — from health care to manufacturing to education — is now being transformed by cheap, fast, connected computing power, the skill required for every decent job is rising as is the necessity of lifelong learning. More and more things you know and tools you use “are being made obsolete faster,”added Mundie. (Emphasis added.)
What skills are needed to have a successful career? Friedman continues: What are those broad skills? Friedman continues:
How to adapt? It will require more individual initiative. We know that it will be vital to have more of the “right” education than less, that you will need to develop skills that are complementary to technology rather than ones that can be easily replaced by it and that we need everyone to be innovating new products and services to employ the people who are being liberated from routine work by automation and software. The winners won’t just be those with more I.Q. It will also be those with more P.Q. (passion quotient) and C.Q. (curiosity quotient) to leverage all the new digital tools to not just find a job, but to invent one or reinvent one, and to not just learn but to relearn for a lifetime.
A revealing New York Times article entitled “To Stay Relevant in a Career, Workers Train Nonstop” explores how workers are adjusting to a labor market where jobs, occupations and skill requirements are constantly changing. The article explains:
The need to constantly adapt is the new reality for many workers, well beyond the information technology business. Car mechanics, librarians, doctors, Hollywood special effects designers — virtually everyone whose job is touched by computing — are being forced to find new, more efficient ways to learn as retooling becomes increasingly important not just to change careers, but simply to stay competitive on their chosen path. … Lynda Gratton, a professor of management practice at the London Business School, has coined a term for this necessity: “serial mastery.” “You can’t expect that what you’ve become a master in will keep you valuable throughout the whole of your career, and you want to add to that the fact that most people are now going to be working into their 70s,” she said, adding that workers must try to choose specialties that cannot be outsourced or automated.
In a terrific defense of the value of law school Lawrence E. Mitchell, dean of Case Western Reserve University’s law school, writes in a New York Times op ed: … the focus on first jobs is misplaced. We educate students for a career likely to span 40 to 50 years. The world is guaranteed to change in unpredictable ways, but that reality doesn’t keep us from planning our lives. Moreover, the career for which we educate students, done through the medium of the law, is a career in leadership and creative problem solving. Many graduates will find that their legal educations give them the skills to find rich and rewarding lives in business, politics, government, finance, the nonprofit sector, the arts, education and more. (Emphasis added.)
Law schools, of course, are on the list –– along with a college prep focus in high school, the liberal arts in college and certain other professional schools –– that policy makers and the pundits claim should be deemphasized because there supposedly is too much supply and too little employer demand. Even if you assume that policy makers and pundits are any good at predicting near term labor market demand –– and the evidence is they aren’t –– Mitchell is right that the value of education increasingly needs to be measured over a career of forty to fifty years. And that is going to increasingly require building a foundation of broad skills that will equip each of us, and even more so, our kids to be agile and lifelong learners in a world with fewer and fewer stable jobs and occupations.
Wrong track on education policy
Readers of these posts know that we believe education attainment is what matters most to future economic success of both individuals and communities. That our system of preparing human capital –– teaching and learning –– is economic growth priority #1.
Unfortunately Michigan seems to be headed in the wrong direction on both k-12 and higher education policy. (The one bright spot that both Governor Snyder and President Obama deserve lots of credit for is the move towards universal quality early childhood education.)
On both K-12 and higher education there is disinvestment. Particularly in higher education. Just as education attainment matters more and more to economic success we are reducing state support. Not smart!
But almost certainly more worrisome is the push by policy makers to undermine the purpose and structure of our education system. Serious proposals to substitute an open market place of just about any education provider without quality standards which will create an existential threat to all local public school districts. And proposals to make education institutions primarily suppliers to meet the immediate job demands of Michigan employers.
Two terrific newly published commentaries explore the dangers of these proposals. On k-12 education MSU Professor of K-12 Educational Administration, David Arsen has written an open letter to Governor Snyder.Arsen’s open letter is an analysis of both the so-called super choice legislation (2012 House Bill 5923) and the Oxford Foundation proposal to radically alter the way k-12 schooling is funded. On higher education Patrick O’Connor, Associate Dean of College Counseling, Cranbrook-Kingswood School, is the author of a terrific Huffington Post blog entitled “Why Governor Snyder Is Wrong About College Access”. Each is a must read!
Arsen writes:
The Oxford funding proposal and HB 5923 represent a truly dramatic strategy to shift the provision of Michigan’s educational services outside locally-governed school districts. They would establish the closest approximation to a universal statewide voucher system ever implemented in the United States. It does not fix foundation grant inequalities or align them with costs. It simply divides foundation grants among course providers based on their share of a student’s total classes. Course providers would have a great incentive to attract low-cost students into low-cost classes — not special education, for example, or high school science labs. Inexpensive online classes with large enrollments would be preferred. Schools losing students to such ventures would see average costs rise, undercutting their ability to continue offering high-cost classes and other services.
Good schools now offer an array of additional services—libraries, reading specialists, transportation, student newspapers, sports, assemblies and so on. By failing to allocate revenue to cover the costs of such services, the Oxford proposal would discourage schools from providing them. Over time, these incentives would force district programming and operations to progressively converge to those of stripped-down online vendors.
Whereas participation in Michigan’s school choice policies is currently concentrated in urban areas, participation would grow substantially in suburban and rural districts under the Oxford and HB 5923 choice plans. Indeed, districts with per-pupil foundation grants thousands of dollars above the basic level would be prime targets for external course providers. (Hello, Detroit suburbs.)
… the Oxford funding proposal and HB 5923 fail to solve the actual problems facing Michigan schools. Instead they would worsen those problems and create a host of new ones. While claiming to advance a plan for globally competitive schools, the drafters propose a set of policies found in no high-performing nation’s educational system. While claiming to advance a modern 21st Century system to replace the old “factory” model of schooling, they in fact offer a plan based on the grim principles of 19th Century piece work production that relied not on collaboration but rather on the coercive measurement of individual effort.The proposals are not based on empirical evidence of what works but rather on faith. This is a plan to privatize Michigan’s public schools. The Oxford proposal and HB 5923 explicitly seek to undermine local school districts as the providers of education services. (Emphasis added.)
O’Connor writes about what he describes as “… Governor Snyder’s plan to realign Michigan’s schools to meet the state’s job demand curve …” He takes on the increasingly popular notion that state policy should turn Michigan education institutions into suppliers to meet Michigan employers immediate employment demands. O”Connor writes:
… This apparent mismatch of supply and demand was too much for the governor to take, so he summed up the efforts of the college access movement of the last four decades in four simple words: “How dumb is that?” And that got me thinking:
I thought about how last year’s national unemployment rate for people with bachelor’s degrees was 4.5 percent, while the unemployment rate for people with a high school diploma — including those in the skilled trades — was 8.3 percent. I thought about how workers with bachelor’s degrees bring home more pay compared to workers with a high school diploma — $414 more every week.
I thought about how school counselors don’t “send” a student anywhere, because post-secondary advising is based on the needs and interests of the individual student, not on the predetermined assumptions of the counselor, the shifting needs of the marketplace, or anyone else for that matter.
I thought about how college readiness isn’t about “making” a student go to college, but preparing each student to be as successful as possible if they choose to go, and how that preparation in higher learning skills — critical thinking, analysis, evaluation, social responsibility — might come in handy if a student forgoes college to work with, say, heavy machinery.
Machinists and welders
Machinists and welders have become public exhibit #1 of why we need to reemphasize vocational training in high school and beyond. The claim is these are high demand/high wage occupations that are now suffering labor shortages because the culture and policy is insisting that everyone get a four year degree.
Lets look at the data:
Welders (offically categorized as Welding, Soldering, and Brazing Workers)
- employment: 521,000
- 10 year job projection: about as fast as all occupations (+10-20%)
Machinists
- employment: 430,000
- 10 year job projections: slower than average (+3-9%)
Seems like a strong case that these are occupations for a decade where there will be jobs. One problem: the projections didn’t turn out to be true. Not close! These are the projections for 2000-2010 made by the very capable folks at the Bureau of Labor Statistics in their 2002-2003 Occupational Outlook Handbook.
What actually happened? Employment for welders between 2000 and 2010 fell from 521,000 to 370,000. Instead of the minimum projected 52,000 jobs increase, there were 151,000 fewer employed welders in 2010 than 2000. For machinists instead of the minimum projected 13,000 jobs increase, there were 60,000 fewer employed welders in 2010 than 2000.
So for the last decade, despite the projections, these have been anything but high demand occupations. In fact, the exact opposite. Anyone going through a vocational education program in high school or beyond to become a machinist or welder had a high probability of not finding a job in their field or finding one and being laid off. If the philosophy, as many policy makers are now urging, is that we want an education system to prepare students for current job openings, machining and welding training should have been eliminated last decade
Lets look at the projections for 2010-2020, once again from the Bureau of Labor Statistics in their 2012-2013 Occupational Outlook Handbook. (BLS is as good, if not better, than anyone doing job projections. Predicting future occupational demand is more and more difficult in an economy being constantly altered by globalization and technology.) For machinists the projections are for an increase of 31,500 (8%) jobs over the next decade. For welders the projected increase is 50,700 (15%). Machinists are projected to grow slower than average, welders about average. If these projections hold true in 2020 there will be 401,000 machinists in America, 29,000 fewer than in 2000. 387,700 would be employed as welders,133,300 fewer than in 2000.
So the high demand case at best is weak. What about high wage? In 2010 the median machinist earned $18.52 an hour. The top ten percent earned $27.91. For welders a little less: $17.04 is the median hourly wage, the top ten percent average $54,000 a year. So for both occupations the typical worker earns in the middle to upper $30,000s. A decent middle class job, but certainly not the “you can earn up to $100,000″ rhetoric you hear from industry and policy makers. And a far cry from the $28 an hour that low education attainment UAW members earned as assemblers at the Detroit Three just a few years ago.
Do we need an education and training system that prepares future machinists and welders? Of course. But as the above data demonstrate matching current demand by employers with education supply of workers is probably a lousy way to design such a system. Such a system would need to expand and contract constantly. Almost certainly not a good way to build an training infrastructure. Particularly one that will need to constantly update its skills as the occupations change because of smarter and smarter machines. Add to that that it is really hard to predict future demand even a decade out so you really don’t know what the demand is or will be.
Also steering high school students into narrow occupational training is almost certainly not good for their building a middle class career. One of the big challenges the country now faces is predominantly blue collar males that have either dropped out of the labor market or are long term unemployed (and in many cases unemployable). Many of them were probably trained in vocational programs in high schools. Where they were able to get a good paying job that is now obsolete. They never developed the broader skills that enabled them to learn new skills when the world changed. My guess is that is a leading reason why we have labor shortages today in occupations that experienced wide spread layoffs last decade. If everyone who didn’t retire who was employed as a machinist or welder in 2000 had the skills for today’s welding and machining jobs it is likely that we would have a labor surplus, not a shortage, today.
I keep coming back to Ann Arbor software entreprenuer Bill Wagner’s column as the foundation that we should build our p-20 system around. A system that builds broad knowledge. It is the system that almost certainly is best for workers, employers and the economy. Wagner writes:
The country, and especially Michigan, seem stuck in the mode of thinking of education as a means to a job, as a vocation. The problem with this attitude is that the hot jobs change frequently. Preparing people for one job, and one job only, creates a temporary and rigid work force.What happens to those individuals who have prepared for nursing jobs when thereʼs a glut of trained nurses on the job market? Do they have the necessary core knowledge to adapt to other positions in the health care field? Can they grow new skills and new responsibilities? Or, have they been trained for just one position? Deep knowledge of nursing got them that first job. Broad knowledge will let them adapt to new responsibilities.
Preparing for a career not a job
Terrific blog on Spartans Helping Spartans by Eileen Lonergan. Its about how MSU prepared her for a career in an occupation that she didn’t know existed when she was in college. The post is titled: “How I Used What I Learned To Build Something I Didn’t Even Know Would Exist” Lonergan writes:
When I graduated from Michigan State University in 1988 with a degree in Advertising, the last thing I expected was to one day own my own web design firm, handle search engine optimization and implement social media campaigns for clients all over the world.
The most important part of my education at MSU was in how it prepared me for a career that didn’t yet exist while I was on campus. Throughout my four years there, I took classes that at the time were required or encouraged or simply fit in nicely with my schedule. I had no way of knowing at the time that the many art history classes I took would one day become very relevant in my life. I lived as an expatriate in London and Asia, seeing many great works in person and learning how art related to geography and history was fascinating.
… The exposure to ideas and technology provided me with the curiosity to want to continuously learn new things and instilled in me the confidence to put myself out there and try. So, while I didn’t major in computer science and my niche didn’t exist when I was on campus, I thank MSU for the foundation I built as a student.
Longeran’s story is one repeated over and over again by those with four year degrees or more. The value of higher education is in developing broad skills –– including becoming a lifelong learner –– that are the foundation of successful forty year careers.
The push from policy makers and other thought leaders to demand that higher education prepare students for a job the day they graduate is not good either for students or the economy. Just a bad is the push to steer universities away from the liberal arts. Course like art history, that proved so valuable to Longeran, are chronically on the list of so-called useless subjects that universities are increasingly pushed to deemphasize if not eliminate. Not smart!
Building a foundation to do well over a long career is only going to grow in value in an economy where technology and globalization accelerate creative destruction. Destroying jobs and occupations and creating new, unimaginable, jobs and occupations at a quicker and quicker pace.
As we describe it, successful careers will be go to those who are good rock climbers, rather than ladder climbers. Those who are able both to constantly spot opportunities in a constantly changing world and have the agility to take advantage of those opportunities. Far different than career success in the past which were build around known and stable rungs of a career ladder.
Productivity up, not wages II
The evidence keeps growing that economic growth is increasingly going to capital not labor. And that unless that changes most Americans are facing a declining standard of living.
David Brooks is right when he writes in a column: “For example, we are now at the end of the era in which a rising tide lifts all boats. Republicans like Mitt Romney can talk about improving the overall business climate with lower taxes and lighter regulation, but regular voters sense that that won’t necessarily help them because wages no longer keep pace with productivity gains. Americans are still skeptical of Washington. If you shove a big government program down their throats they will recoil. But many of their immediate problems flow from globalization, the turmoil of technological change and social decay, and they’re looking for a bit of help.” (Emphasis added.)
Thomas Friedman explores this disconnect between productivity and labor in a column about the new skills needed to be successful. He writes based on an interview with Erik Brynjolfsson, co-author of “Race Against the Machine”:
“So most economists have had this feeling that if you just boost productivity, the pie grows, and, in the long run, everything else takes care of itself,”explained Brynjolfsson in an interview. “But there is no economic law that says technological progress has to benefit everyone. It’s entirely possible for the pie to get bigger and some people to get a smaller slice.” Indeed,when the digital revolution gets so cheap, fast, connected and ubiquitous you see this in three ways, Brynjolfsson added: those with more education start to earn much more than those without it, those with the capital to buy and operate machines earn much more than those who can just offer their labor, and those with superstar skills,who can reach global markets, earn much more than those with just slightly less talent.Put it all together, he added, and you can understand, why the Great Recession took the biggest bite out of employment but is not the only thing affecting job loss today:why we have record productivity, wealth and innovation, yet median incomes are falling, inequality is rising and high unemployment remains persistent.
How bad is it? Steven Greenhouse in a New York Times article entitled Our Economic Pickle provides the data:
Wages have fallen to a record low as a share of America’s gross domestic product. Until 1975, wages nearly always accounted for more than 50 percent of the nation’s G.D.P., but last year wages fell to a record low of 43.5 percent. Since 2001, when the wage share was 49 percent, there has been a steep slide.
“We went almost a century where the labor share was pretty stable and we shared prosperity,” says Lawrence Katz, a labor economist at Harvard. “What we’re seeing now is very disquieting.” For the great bulk of workers, labor’s shrinking share is even worse than the statistics show, when one considers that a sizable — and growing — chunk of overall wages goes to the top 1 percent: senior corporate executives, Wall Street professionals, Hollywood stars, pop singers and professional athletes. The share of wages going to the top 1 percent climbed to 12.9 percent in 2010, from 7.3 percent in 1979.
Some economists say it is wrong to look at just wages because other aspects of employee compensation, notably health costs, have risen. But overall employee compensation — including health and retirement benefits — has also slipped badly, falling to its lowest share of national income in more than 50 years while corporate profits have climbed to their highest share over that time.
If you care about –– as almost everyone claims –– the American middle class, figuring out how to be more worker friendly rather than business friendly is the policy priority. The assumption that by being business friendly –– the core of supply side economics –– it would benefit American workers is increasingly unsupportable.
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