And this time not just, you know, by taking the good jobs on Wall Street.
We’ve started to understand that inequality in America is becoming a serious problem for the economic heath of the country in general.
Last month Standard & Poor’s warned that “extreme income inequality [was] a drag on long-run economic growth and the ratings organization “reduced our 10-year U.S. growth forecast to a 2.5% rate. We expected 2.8% five years ago.”
According to a piece at Al Jazeera, Harvard Business School’s annual survey of American business competitiveness showed something else that’s pretty disturbing:
[The survey] reveals a troubling divergence in the U.S. economy. Large and midsize firms have rallied strongly from the Great Recession, and highly-skilled individuals are prospering. But middle- and working-class citizens are struggling, as are small businesses. While HBS alumni saw strengths in elements of the business environment that influence firms’ success, the weaknesses in elements that drive prosperity for the average American indicate that the American economy requires a strategy in order to do its full job. As a start, business leaders must take action to address the structural problems that linger for the nation, even as the cyclical recovery continues. The survey delves into three elements of the business environment that play a key role in restoring U.S. competitiveness: K-12 education, workplace skills, and transportation infrastructure.
More specifically, “Labor force participation in America peaked in 1997 and has now fallen to levels not seen in three decades. Real hourly wages have stalled even among college-educated Americans; only those with advanced degrees have seen gains.”
This provides a rather interesting facet of a problem about which education reformers have worried for decades. There is a highly paid technocrat elite in America that is doing quite well in today’s economy (the engineers, many doctors and lawyers, Silicon Valley entrepreneurs) but we are not doing a very good job at all training people to become those with good working class jobs (nurses’ assistants, electricians, plumbers) that also still exist in the country.
As the survey indicates, this is a problem not just because of the inequality it promotes and justifies, but also because the system is simply not producing enough people to do the things we need to keep the country functioning effectively.
Can this problem be fixed with K-12 education, workplace skills, and transportation infrastructure? Well, they look like good places to start. Such suggestions make a little more senses than the “just education” improvement strategy recommended by S & P.
The survey is here.