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The Opinion
Pages| Op-Ed Columnist
Knowledge Isn’t Power
FEB. 23, 2015
By Paul Krugman, New York Times
Regular readers
know that I sometimes mock “very serious people” — politicians and pundits who
solemnly repeat conventional wisdom that sounds tough-minded and realistic. The
trouble is that sounding serious and being serious are by no means the same thing,
and some of those seemingly tough-minded positions are actually ways to dodge
the truly hard issues.
The prime
example of recent years was, of course, Bowles-Simpsonism — the diversion of
elite discourse away from the ongoing tragedy of high unemployment and into the
supposedly crucial issue of how, exactly, we will pay for social insurance
programs a couple of decades from now. That particular obsession, I’m happy to
say, seems to be on the wane. But my sense is that there’s a new
form of issue-dodging packaged as seriousness on the rise. This time, the
evasion involves trying to divert our national discourse about inequality into
a discussion of alleged problems with education.
And the reason
this is an evasion is that whatever serious people may want to believe, soaring
inequality isn’t about education; it’s about power.
Just to be
clear: I’m in favor of better education. Education is a friend of mine. And it
should be available and affordable for all. But what I keep seeing is people
insisting that educational failings are at the root of still-weak job creation,
stagnating wages and rising inequality. This sounds serious and thoughtful. But
it’s actually a view very much at odds with the evidence, not to mention a way
to hide from the real, unavoidably partisan debate.
The
education-centric story of our problems runs like this: We live in a period of
unprecedented technological change, and too many American workers lack the
skills to cope with that change. This “skills gap” is holding back growth,
because businesses can’t find the workers they need. It also feeds inequality,
as wages soar for workers with the right skills but stagnate or decline for the
less educated. So what we need is more and better education.
My guess is
that this sounds familiar — it’s what you hear from the talking heads on Sunday
morning TV, in opinion articles from business leaders like Jamie Dimon of JPMorgan Chase, in
“framing papers” from the Brookings Institution’s centrist Hamilton Project. It’s repeated so widely that many people
probably assume it’s unquestionably true. But it isn’t.
For one thing,
is the pace of technological change really that fast? “We wanted flying cars,
instead we got 140 characters,” the venture capitalist Peter Thiel has snarked. Productivity growth,
which surged briefly after 1995, seems to have slowed sharply.
Furthermore,
there’s no evidence that a skills gap is holding back employment. After all, if
businesses were desperate for workers with certain skills, they would
presumably be offering premium wages to attract such workers. So where are
these fortunate professions? You can find some examples here and there.
Interestingly, some of the biggest recent wage gains are for skilled manual
labor — sewing machine operators, boilermakers
— as some manufacturing production moves back to America. But the notion that
highly skilled workers are generally in demand is just false.
Finally, while
the education/inequality story may once have seemed plausible, it hasn’t
tracked reality for a long time. “The wages of the highest-skilled and
highest-paid individuals have continued to increase steadily,” the Hamilton
Project says. Actually, the inflation-adjusted earnings of highly educated
Americans have gone nowhere since the late 1990s.
So what is
really going on? Corporate profits have soared as a share of national income,
but there is no sign of a rise in the rate of
return on investment. How is that possible? Well, it’s what you
would expect if rising profits reflect monopoly power rather than returns to
capital.
As for wages
and salaries, never mind college degrees — all the big gains are going to a
tiny group of individuals holding strategic positions in corporate suites or
astride the crossroads of finance. Rising inequality isn’t about who has the
knowledge; it’s about who has the power.
Now, there’s a
lot we could do to redress this inequality of power. We could levy higher taxes
on corporations and the wealthy, and invest the proceeds in programs that help
working families. We could raise the minimum wage and make it easier for
workers to organize. It’s not hard to imagine a truly serious effort to make
America less unequal.
But given the
determination of one major party to move policy in exactly the opposite
direction, advocating such an effort makes you sound partisan. Hence the desire
to see the whole thing as an education problem instead. But we should recognize
that popular evasion for what it is: a deeply unserious fantasy.
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