In March of 2010, The Atlantic published an excellent article by Don Peck which painfully described the dire consequences of a long period of high unemployment on US society - How a New Jobless Era will Transform America. According to Peck, the consequences of prolonged unemployment are not only bleak but truly systemic in nature - “a slow-motion social catastrophe.” Joblessness is more devastating to families and communities than poverty, he wrote:
“The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.”
Peck just published another very good article in the September 2011 issue of The Atlantic - Can the Middle Class be Saved? In this article, his focus is on what he refers to as The Culling of the Middle Class:
“Arguably, the most important economic trend in the United States over the past couple of generations has been the ever more distinct sorting of Americans into winners and losers, and the slow hollowing-out of the middle class. Median incomes declined outright from 1999 to 2009. For most of the aughts, that trend was masked by the housing bubble, which allowed working-class and middle-class families to raise their standard of living despite income stagnation or downward job mobility. But that fig leaf has since blown away. And the recession has pressed hard on the broad center of American society.”
“The first is that for some decades now, the U.S. labor market has experienced increased demand for skilled workers. During times like the 1950s and 1960s, a rising level of educational attainment kept up with this rising demand for skill. But since the late 1970s and early 1980s, the rise in U.S. education levels has not kept up with the rising demand for skilled workers, and the slowdown in educational attainment has been particularly severe for males. The result has been a sharp rise in the inequality of wages.”
“A second, equally significant challenge is that the structure of job opportunities in the United States has sharply polarized over the past two decades, with expanding job opportunities in both high-skill, high-wage occupations and low-skill, low- wage occupations, coupled with contracting opportunities in middle-wage, middle-skill white-collar and blue-collar jobs. Concretely, employment and earnings are rising in both high-education professional, technical, and managerial occupations and, since the late 1980s, in low-education food service, personal care, and protective service occupations.”
“Conversely, job opportunities are declining in both middle-skill, white-collar clerical, administrative, and sales occupations and in middle-skill, blue-collar production, craft, and operative occupations. The decline in middle-skill jobs has been detrimental to the earnings and labor force participation rates of workers without a four-year college education, and differentially so for males, who are increasingly concentrated in low-paying service occupations.”
Autor’s conclusions for the long term job prospect of the US middle class are disheartening:
“Demand for middle-skill jobs is declining, and consequently, workers that do not obtain postsecondary education face a contracting set of job opportunities. Perhaps most alarmingly, males as a group have adapted comparatively poorly to the changing labor market. Male educational attainment has slowed and male labor force participation has secularly declined. For males without a four year college degree, wages have stagnated or fallen over three decades. And as these males have moved out of middle-skill blue-collar jobs, they have generally moved downward in the occupational skill and earnings distribution.”
Every study I have recently seen on job opportunities in the US economy arrives at a similar conclusion: in the foreseeable future, the US will need better educated workers with specific skills requirements.
A recent report by the McKinsey Global Institute - An Economy that Works: Job Creation and America’s Future - projects a shortage of 1.5 million workers with college degrees by 2020 if the economy recovers, but a surplus of almost 6 million of workers with no high school degree. The report also projects a shortage of workers with technical and health care oriented skills even though many of those jobs do not necessarily require a college degree.
In his Atlantic article, Don Peck’s key recommendations for Filling the Hole in the Middle Class address these education and skills gaps. During the first three-quarters of the 20th century, while technological innovations advanced rapidly, educational attainment advanced even faster. In the first part of the century the number of people completing elementary school rose rapidly, and later we saw a similar rise in high school graduation rates. The pool of people who could deal with the new technologies kept growing larger. This is how the US was able to build a broad middle class.
But, the situation is now different, partly because the rate of technological innovation continues to accelerate and partly because of globalization. Peck observes that: “. . . even in boom times, many more people than we would care to acknowledge won’t have the education, skills, or abilities to prosper in a pure and globalized market, shaped by enormous labor reserves in China, India, and other developing countries. Over the next decade or more, even if national economic growth is strong, what we do to help and support moderately educated Americans may well determine whether the United States remains a middle-class country.”
How can we do this? Let’s look at some figures.
The 2010 Educational Attainment data from the US Census Bureau shows that close to 90 percent of the population now finishes high school, and of those, about 57 percent go on to post-secondary study. Roughly 27 percent get community college and vocational degrees or attend college but do not graduate and 30 percent finish college. The college graduation rate was only 13 percent in 1970 and 25 percent in 1995, and is projected to grow to 34 percent by 2020.
While educational innovations, such as online learning, could help us attain higher college graduation rates, it is unrealistic to expect that we can significantly accelerate them in the foreseeable future. As Peck points out: “. . .college education simply cannot be the whole answer to the woes of the middle class, since even under the rosiest of assumptions, most of the middle of society will not have a four-year college degree.”
Over the past thirty years, the winners in our meritocratic society have been those with the highest educational attainments. They are the ones best prepared to deal with our increasingly complex world, and their pay has risen accordingly. Children with high academic skills, and especially those lucky enough to have affluent parents who can afford to send them to all the right schools, will continue to do very well indeed. But, as Peck points out:
“Among the more pernicious aspects of the meritocracy as we now understand it in the United States is the equation of merit with test-taking success, and the corresponding belief that those who struggle in the classroom should expect to achieve little outside it. Progress along the meritocratic path has become measurable from a very early age. This is a narrow way of looking at human potential, and it badly underserves a large portion of the population.”
“We have beaten the drum so loudly and for so long about the centrality of a college education that we should not be surprised when people who don’t attend college—or those who start but do not finish—go adrift at age 18 or 20. . . . As we continue to push for better K–12 schooling and wider college access, we also need to build more paths into the middle class that do not depend on a four-year college degree.”
He offers a number of ideas for providing alternate career paths for those who for one reason or another don’t do well in classic academic settings. These include: career academies within larger high schools whose curriculum includes hands-on technical courses designed to build work skills; post-secondary vocational training programs, offered by community colleges, which can significantly enhance the skills of students in a variety of areas with good job prospects; and apprenticeship programs which offer an alternative path into toward good, well paying careers.
According to the aforementioned McKinsey study, even workers with post high school education may not necessarily have the skills needed to for the jobs that are likely to most be in demand. Employers are already having trouble filling positions requiring specific skills, but students say that they lack a clear picture of which jobs to prepare themselves for. The McKinsey report suggests that to help students understand which skills employers are looking for: “Businesses can become more involved in developing curricula in community colleges and vocational schools, and a national jobs database could provide the basis for informed decisions about majors and training programs.”
There are plenty of good ideas, some of them quite innovative. Most of them are not all that expensive, requiring primarily close collaborations between governments, business and educational institutions at the local and regional levels. As Don Peck writes:
“A continued push for better schooling, the creation of clearer paths into careers for people who don’t immediately go to college, and stronger support for low-wage workers - together, these measures can help mitigate the economic cleavage of U.S. society, strengthening the middle. They would hardly solve all of society’s problems, but they would create the conditions for more-predictable and more-comfortable lives - all harnessed to continuing rewards for work and education. These, ultimately, are the most-critical preconditions for middle-class life and a healthy society.”