I Am Beginning to Think That the Backlash Against the Skills-Gap Story of Wage Inequality Has Gone Too Far...: Focus
Over at Equitable Growth: I have always been impressed by vir illustris Mark Hoekstra's regression-discontinuity story of the value of being admitted to U.T. Austin. As the very sharp Jordan Weissman reports:
...AM I DOOMED? Actually, yeah. You might be.... Mark Hoekstra... compared the earnings of white, male students who had barely missed the admissions cut-off for an unnamed public flagship university to those of students who had barely been accepted.... Enrolling at the flagship increased wages by 20 percent... READ MOAR
And, as vir illustris Mark Thoma recounts his own experience, keeping people who are setup to benefit from college from finding an easy path to funding it is pure social waste:
…that education will never be the answer for everyone…. However… a college degree is a worthwhile investment…. Fortunately for me, CSU Chico, which was nearby, only charged approximately $100 per semester…. If it hadn’t been for the cheap tuition, I would have been stuck in that town with little hope of finding my potential. I am grateful to this day that the State of California gave me that opportunity for an education, and that I was able to eventually make it through graduate school with very little debt…. How many people who are in a situation like I faced will be stuck there, unable to afford to go to the college that best suits them, or can’t go at all? When that happens, when so much potential is unrealized, it makes us all worse off…. We can do better than this.
The key things to avoid are:
- Keeping people who won't successfully complete college from enrolling and having an experience that they look back at as not worthwhile...
- Keeping people who won't successfully complete college from taking on enormous student loan debt in the process...
- Keeping people who could successfully complete college from signing up for a very low-quality college--and we are looking at you, Washington Post, or Stanley Kaplan University Daily--as having played a large role in blocking action to minimize this problem...
And the key things to promote is:
- Persuading people who will successfully complete a reasonable-quality college that their loan debt will be a very small burden on them, and that college is really a very good investment.
- Figuring out better and cheaper ways to teach and verify what people learn in college.
- Figuring out how to boost the human capital of people who will not successfully complete a reasonable-quality college.
You may say that this is an economic growth agenda, and a high return on investment economic growth agenda, but that it is not an inequality-reducing agenda. I disagree: the fact that there are a number of college graduates in jobs that require only high school means that college graduates with college-requirement jobs are under some threat, doesn't it? It means that their salaries are lower because of that threat--lower than they would be if we had fewer college graduates and every college graduate had a college-requirement job, doesn't it? And not all of the money saved from lower salaries for the college-educated flows to profits and the Overclass: some of it flows to consumers in general in the form of lower prices, doesn't it?
The consonance of the beginning of the rise in inequality with our giving up the pace in the race between education and technology has always seemed to me to be very strong evidence that salaries are, in fact, highly responsive to shifts in the relative supply-demand balance of high-school and college-educated workers.