Recent headlines: “Dow Jumps 94 points after much better-than-expected jobs report “.
“SMASH: Job growth surges by 222,000 way above expectations.”
Both of these headlines lead you to the wrong conclusion. You think, gee things are getting better. Numbers often lie and news headlines almost always do.
The US labor market is not in good shape. The only thing that has changed from the darkest days of the 2008 financial crisis is that more people are working. Yes that is a lot to be thankful for if you were one of the victims, but that doesn’t mean you are better off than you were before 2008.
Recent reports show the US unemployment rate around the 4.5% level is near historic low levels. This rate has taken an occasional uptick as job creation is leading more and more long time workers to reinter the work force. This is a good sign.
Job growth is so strong these days that HR departments and small business owners report frustration in finding applicants. Micro Economics 101 dictates that prices paid to labor should be on the rise.
Corporations are in denial. If HR is only paying $9.75 per hour for a warehouse job and getting zero qualified applicants, maybe it is because nobody can afford to work for that price.
Wages are barely keeping up with inflation. This means you are working more but can’t buy anything more. Something is wrong, how can this be?
Please Teach Someone How to Fish. . . .
The answer is another condemnation of our education system. The US is not producing enough of the right kinds of skills. This means not enough scientists and engineers for Silicon Valley. But it also means that there are not enough qualified applicants for mid level and basic jobs like an Amazon fulfillment center.
Public education has been a disaster in addressing this issue. Cutting back on government spending on education is a favorite trick of politicians looking to balance state and local budgets.
What we are talking about is not new. What is different today is the urgency. Technology is on the verge of tectonic changes that are demanding more specialized skills at all levels. Public education will never catch up.
Looking For Solutions
It is necessary to look to the private system. Start with a list of the top 10 schools that traditionally turn out the best in the field of science, engineering and business. This includes familiar names like Harvard, Princeton and Stanford.
The total cost of attending four years at any of these institutions these days, excluding trips for Spring break and copious amounts of craft beer, runs about $250,000.
Harvard’s website claims that “70% of Harvard students receive some form of financial aid. A Harvard education is more affordable than a state school for 90% of American families.” Here again, numbers often lie.
Over 15% of American families live in poverty, the second highest level among developed countries.
Harvard’s claims are spurious at best. The website fails to mention the level of financial aid. If we are taking about 10% off the list price of a dorm room, that isn’t much help.
Elitism Isn’t The Answer
Every one of the top 10 schools can afford to do a whole lot more. These institutions pay no taxes while receiving billions every year in donations. In 2015, donations totaled more than $40 billion, nearly 8% higher than the previous year. That is just one year’s take. This is more than the GDP of several countries.
The value of endowment funds for just the top 10 schools is more than $175 billion. These endowments have been turned into nothing more than a safe deposit box for wealthy donors. These funds need to be used for something more than building a museum to hold the Rockefeller art collection.