The U.S. economy remains locked in mediocre growth and increasing inequality. To help break that cycle, federal and state governments should cut funding and student assistance at colleges and universities and redirect resources and students into vocational programs.
The economy supports many well-paying jobs at the top in technology, industry and finance. And it creates many more jobs at the bottom for folks who serve the “better off” at restaurants and in health spas, but hardly enough in the middle — notably production jobs in manufacturing and construction, where some of the best wages are paid for ordinary workers.
This is not a cynical scheme hatched by the top 10 percent.
New technologies permit, and competition requires, businesses to make products and erect structures with many fewer — but more specialized and highly skilled — workers. Those good-paying jobs in the middle are for technicians, mechanics and other modern tradespeople who are in short supply.
This critical bottleneck limits investments in domestically based industrial activities. It is an important reason why growth during the Bush-Obama years has been half the pace of the Reagan-Clinton years, and real family incomes are falling.
Multinationals can invest in Asia, where they can find the workers they need. American professionals at the top of those businesses who provide the vision and string the beads — those who conceive new products, manage complex global supply chains and put together the difficult financial structures on Wall Street — can demand high salaries, because they are effectively selling their services globally.
President Barack Obama’s education policy is simple: Folks with a college education on average earn more money, so to raise family incomes, jam more young folks into colleges with cheap student loans and Pell Grants. That’s like observing folks drink more Coke on hot days, then giving away soft drinks to get more sunny summer afternoons.
America sends far too many kids to college, especially to inexpensive-to-staff programs in the social sciences and humanities. Many students return home after four years heavily in debt but with few career-ready skills.
Universities are producing enough graduates in advanced engineering, management and finance to do the big jobs that pay well, but hardly enough with the skills to fill the trades positions in the middle. But that really is not their mission.
The federal and state governments need to limit student loans and curtail funding at many universities — especially, liberal arts programs enrolling students from the second and third quartiles of high school graduating classes. Those young people and the money supporting their enrollment should be redirected into expanded high school and community college apprenticeship and technical programs, which are currently scarce and terribly underfunded.
Globalization makes this shift of money and human resources imperative if America’s front-line workers are to compete with low-wage, often subsidized labor in Asia. Without a skills advantage, those Americans are pushed into those minimum-wage and other low-wage jobs Obama talks so much about.
Laws mandating higher pay won’t make those workers more productive or competitive. Instead, as the non-partisan Congressional Budget Office estimates, raising the minimum wage would destroy hundreds of thousands of jobs and make inequality worse.
Facing such legislation, McDonald’s plans to roll out machines that will take customer orders and replace counter clerks, and those will spread to other convenience restaurants and businesses.
A president who tells parents to send their kids to trade school instead of college would face a firestorm from voters. Upper-middle-class and professional families would strongly resist putting some of their children on a vocational track.
Still, a national policy to expand vocational training at the expense of higher education is absolutely essential if the United States is to continue to grow, prosper and remain secure.
