What makes the current economic crisis (worldwide now, but especially here in the US) different from the others that have happened before? I’m going to pick just one aspect, which is how the US will be positioned to come out of this.
Where will we be, when we come out on the other side … and why?
Ian has certainly covered a lot of this territory before but an article in today’s NY Times reminded me, which is that I feel that when we ‘come to the other side’ on this…we won’t know it. It won’t ‘feel’ like we’ve come out of the tunnel because we won’t really have done so and the reason for that is this: The US economy doesn’t really have much of any industry to fuel our coming out.
As we are all aware, a lot of the industry that used to pay middle class wages to working people is gone overseas. A lot of people who in the past would have been able to go back into the factories to work, are no longer employed in that way – they are employed in non-production positions. Additionally, for the past ten years at least, great swaths of Americans have not been able to compete for good paying jobs because they can’t afford to go to college, which is now the entryway.
In the NY Times article, they report on a recent study that just came out, which highlights this issue:
“Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007, adjusted for inflation, while median family income rose 147 percent. Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families…"When we come out of the recession," Mr. Callan added, "we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers…."
"The report, "Measuring Up 2008," is one of the few to compare net college costs — that is, a year’s tuition, fees, room and board, minus financial aid — against median family income. Those findings are stark. Last year, the net cost at a four-year public university amounted to 28 percent of the median family income, while a four-year private university cost 76 percent of the median family income.”
At the same time, and again , this is not news exactly, a tremendous amount has been written and published about the paucity of American kids going into technical majors in college. Most of the time, the comments are that American kids don’t think engineering and IT are ‘sexy’ and I’m not going to argue with that estimate, but I also think there is something else at play here.
Washtech (which is a technical organizing organization out of Washington State)did a survey in September of this year among top science and math students at the high school level regarding their plans for their studies and their futures. Every single student mentioned three issues that are affecting their choices in terms of going into engineering, IT or other hard sciences:
Offshore Outsourcing
Lack of loyalty on the parts of corporations toward US company locations
Perception of saturation in the IT market
These kids are considered ‘the best of the best’ in terms of hope for the US’s future in terms of being able to compete economically. These kids already know that their chances of losing their jobs in their chosen fields to offshoring are great; they already know that if they want to have any control over their futures, that working for a large corporation is not the way to go.
If you put these two aspects together: Lack of affordability and distrust of the future and of American business, I believe you have a real vortex of economic depression forming.
The United States doesn’t need to do less educating, of fewer people(and as Ian has described, concentrating the education and good jobs among the elites, who do not exactly need any more reinforcing in those areas), but of more, of making it MORE accessible and affordable.
The United States doesn’t need to send more jobs overseas – it needs to keep more jobs and technology here. If students do not have any incentive to invest themselves in the hard work to do the sciences and math, then the tap for the future will dry up more and more, companies will either bring in more H-1B staff or will offshore more and more activities and we will move closer and closer to a nation whose economy resembles nothing more closely than a donut, with wealth, education and opportunity concentrated on one side in a small area, and struggling people in the great majority.
Something truly dramatic and radical must be done about this. Obama has talked about making education more affordable, but more than that must be done.
Countries such as China and India have eaten our lunch (and breakfast and dinners too) because they have a national education and economic policy that promotes education and building their economies AT HOME. Students in those countries know, in a practical “How I’m going to benefit myself, my family and my country” sort of way what the struggle is actually FOR. We need to have the same.
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Right on, Toby! You have hit the nail on the head in a number of areas. We, the American economy, can do all this stuff if we wanted to. There is no plan at any type of national, or even state, level on what our educational system is supposed to do. In addition, and I think this is the most important point here, is the fact that most US corporations are only concerned with the bottom line today. They won’t invest in the future and that especially means the employees. There is no loyalty. Those students are asking themselves the question, “If Company A will get rid of me at the slightest whim, why should I have any commitment to them?”
Great job.
that’s some post toby
I want to re-iterate my desire for tariffs on all products that come from counties that don’t allow for a living wage and unions
digg
and reddit
But then, other countries might say the same thing to the US! The minimum wage is not a live able wage and unions are not exactly popular with corporations. Columbia is rather fond of killing those who try for worker’s rights and Bush is still trying to push through a trade agreement on his way out.
NAFTA, CAFTA, and all other trade agreements need to be canceled. It was all set up to benefit corporations, not workers. Add these agreements to IMF, WTO, World Bank, etc. and you have the reason why it is bad for workers everywhere.
Thank you Ellie.
And for anyone who’s wondering about student loan debt:
“Undergraduate student loan debt has increased significantly since 1997. The average undergraduate debt is $18,900, up 66% from $11,400. The median undergraduate debt rose 74% to $16,500 from $9,500. Those who attended private four-year colleges borrowed most (average $21,200/median $18,400), followed by those who attended public four-year colleges (average $17,100/median $16,200), next were those who attended vocational/technical school (average $15,000/median $11,900), and those borrowing the least attended public two-year institutions (average $8,700/median $7,700)…
Students attending graduate school borrow, on average, an additional $31,700 beyond their undergraduate borrowing, an increase of 51% since 1997. The median debt level for graduate school borrowing is $23,700, an increase of 72% since 1997. Those borrowing for professional study, particularly law and medicine, drive up the average graduate level of borrowing. Law and medical student borrowers report an average accumulated debt from all years (undergraduate and graduate study) of $91,700 while the average combined debt for all graduate students is $45,900.”
http://www.nelliemae.com/library/research_10.html
So, it is very possible for someone who takes a graduate degree to end up $40,000 in debt. Let’s see now, what would you think twice about doing if you were 25 years old and $40,000 in debt(and we are not even talking about a car loan or credit cards on top of this):
Could you think about getting married?
Could you think about living on your own?
Could you think about buying a home? Furnishing that home?
If you were married, could you think about having kids or being able to afford to send your kids to school?
Could you think about participating in the economy in any meaningful way with monthly payments on that..plus perhaps monthly payments for a car and rent, etc.?
And we wonder what will happen to the economy?
Yes, “middle class” students in China and India have a clear vision of how they are helping their family and their nation. However, both nations have huge populations that are lucky to get even the most rudimentary education. This is particularly true for poor women in India.
On the other hand, our prosperity was never based on competing with up-and-coming nations in education levels. It was based on strongly surpassing the education levels of all the other most advanced nations.
By that yardstick, we need drastic intervention to get back on course.
Oh, you are correct – China and India have their versions of ‘the elites’ too – the difference is that because of their sheer population size, those numbers of committed, determined, and (dare I say it) ‘patriotic’ (in the ‘my country needs educated engineers and computer programmers so that we can raise the country)are huge in comparison. Click on that High School student study – there are quotes and pictures of the kids there. These are the kids who are ‘the easy sell’ in terms of match, science, engineering. These are not the kids who ‘could if they wanted but they don’t want it that much’ sorts. If we are losing the ‘easy sell’ group, how the hell are we going to reach the rest? Especially if you have the affordability issue involved? But again, it all comes down to the political and economic will – and so far, we are too tied to the ‘I’ve got mine – too bad for you’ thing, and the ‘if you were any good, you’d have gotten yourself born into a better family’ thing.