The economic truism that has taken the greatest pounding in recent years is that “a rising tide lifts all boats.” Many Americans are rightly skeptical that macroeconomic growth will translate into microeconomic progress, at least for those who do not possess highly-demanded skills or preexisting wealth.
It’s with that perspective that Anne Kim reviews an upbeat book by the Millikin Institute’s Joel Kurtzman that predicts the United States will likely maintain its dominance over its economic competitors via advanced robotics, a “manufacturing renaissance,” newly exploited shale energy reserves, and deployment of “shelved” offshore capital.
Even if you accept Kurtzman’s premises, says Kim, will they actually improve the economic lot of average Americans?
[I] the forces Kurtzman points to do ultimately allow America to retain its preeminence in the world economy—and I for one very much hope he’s right about that—that’s no guarantee that average Americans will benefit. Kurtzman at least nods to this darker potential reality: “[O]ur kids—if they do the work and get a college education—will have it better than we do” (emphasis by Kurtzman). It’s a whopper of a caveat: in 2012, 62 percent of Americans had no college degree, and just 28 percent had a bachelor’s degree or more.
Even manufacturing’s rebirth could wind up bypassing the masses. Unlike the factories of yesterday, when a high school degree could get you a job on the line, today’s factories require highly specialized and educated workers—and fewer of them.
Kurtzman’s solution is, of course, the default one touted by every policymaker and politician: expanding education, as well as “educating people about the need for education.” He is also unsympathetic toward those who don’t get with the program: “For people who dropped out of high school and lack motivation and interest, or who are unwilling to go back to school, I don’t see much hope. The economy and the riches it will be producing will pass them by.”
But what about the many millions of Americans who’ve “worked hard and played by the rules,” in Bill Clinton’s original formulation, but find themselves displaced in the future economy? What’s the right balance between compassion and competitiveness? How can government promote mobility without sacrificing growth? And if inequality is an inevitable outcome of growth, how much inequality are we willing to “pay” for as the price of economic dominance? The future of the second American century might lie not so much in the four factors that Kurtzman identifies but in how policymakers answer these questions.
In other words, it’s cold comfort to be part of a country that is “winning” the global economic competition if you’re unemployed, underemployed, or just plain can’t make a living.