Sunday, January 29, 2012

How to fix the biggest problem we have in Canada and America

I've felt for a long time, though I'm not sure if I've said it here, that the biggest problem facing Canada, and especially America, is the increasing inability of people without professional degrees or even any sort of post-secondary education at all, to earn a middle-class living.

While it has become quite fashionable to declare that economies in the West are moribund, or that there are no more jobs, the reality is that those with university degrees, particularly those with degrees that are essentially vocational training, are living as well as ever. Those without, however, are living worse than they have in a long time. As Don Peck wrote when looking at America's middle class in September's Atlantic:

America’s classes are separating and changing. A tiny elite continues to float up and away from everyone else. Below it, suspended, sits what might be thought of as the professional middle class—unexceptional college graduates for whom the arrow of fortune points mostly sideways, and an upper tier of college graduates and postgraduates for whom it points progressively upward, but not spectacularly so. The professional middle class has grown anxious since the crash, and not without reason. Yet these anxieties should not distract us from a second, more important, cleavage in American society—the one between college graduates and everyone else.

If you live and work in the professional communities of Boston or Seattle or Washington, D.C., it is easy to forget that nationwide, even among people ages 25 to 34, college graduates make up only about 30 percent of the population. And it is easy to forget that a family income of $113,000 in 2009 would have put you in the 80th income percentile nationally. The true center of American society has always been its nonprofessionals—high-school graduates who didn’t go on to get a bachelor’s degree make up 58 percent of the adult population. And as manufacturing jobs and semiskilled office positions disappear, much of this vast, nonprofessional middle class is drifting downward.

In Saturday's Globe and Mail, Margaret Wente asks the question, "have we become a caste society?" Wente is somewhat out-of-touch, though it often appears to be intentional. This time, for example, she wrote that being part of the richest one percent "doesn’t take all that much money. A family income of $196,000 will do it."

However, Wente is spot on with the thrust of the article, which is that:

Today, the top 20 per cent and the bottom 20 per cent seldom cross paths (except at Tim Hortons). They raise their kids in different ways, send them to different schools, eat different kinds of food, choose different forms of exercise and recreation, take different kinds of vacations. The top 20 per cent include virtually all of the people who run our governments, manage our businesses and set our social policies. But fewer and fewer of them know anybody in the bottom 20 per cent, or have much idea of how they think and live.

She is also correct in saying that: "The trouble is, solutions are hard to come by. Raising taxes on the rich might be a good thing, but it won’t narrow the gap. So what will? Some people want massive investment in early childhood education for disadvantaged kids. Some want massive job-creation programs, or a massive increase in training for the unskilled. Such solutions would need vast amounts of public money, but maybe they’d be worth it."

The likely solution, which is really not a grand solution at all, but probably the only sensible one, comes from Adam Davidson in this month's Atlantic. Davidson looked at how a factory in South Carolina could manage to stay in business against the seemingly inevitable outflow of manufacturing jobs overseas, especially to China. He found that the jobs that stay are jobs in what is, essentially, skilled manufacturing. A great number of these skilled jobs can be found in Germany, Taiwan, and, yes, here in South Korea.

Davidson concludes that there really is no solution besides education and, more importantly, fixing all the other problems that cause people to be unemployed.

"It’s hard to imagine what set of circumstances would reverse recent trends and bring large numbers of jobs for unskilled laborers back to the U.S. Our efforts might be more fruitfully focused on getting Maddie the education she needs for a better shot at a decent living in the years to come. Subsidized job-training programs tend to be fairly popular among Democrats and Republicans, and certainly benefit some people. But these programs suffer from all the ills in our education system; opportunities go, disproportionately, to those who already have initiative, intelligence, and—not least—family support


To solve all the problems that keep people from acquiring skills would require tackling the toughest issues our country faces: a broken educational system, teen pregnancy, drug use, racial discrimination, a fractured political culture.

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