Education Won't Solve This Employment/Wage Problem

You hear politicians and business people and media figures blame public schools and public school teachers for the employment/wage problems in the country all the time.

The theory goes like this: teachers in the system suck, so therefore schools suck, so therefore kids are not getting the education they need to get good paying, high-skilled jobs, therefore they're stuck doing low wage jobs and until we do something about the "bad teachers" in this country who are churning out all the poorly trained laborers, we are not going to solve our unemployment/wage problems.

The latest media figure to parrot that was Chris Matthews of MSNBC.

But the theory is bunk.

First, there are fewer and fewer good paying jobs in this country -they've all been outsourced or automated.

The NY Times is the latest to report that this morning:

While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project.

The disappearance of midwage, midskill jobs is part of a longer-term trend that some refer to as a hollowing out of the work force, though it has probably been accelerated by government layoffs.

“The overarching message here is we don’t just have a jobs deficit; we have a ‘good jobs’ deficit,” said Annette Bernhardt, the report’s author and a policy co-director at the National Employment Law Project, a liberal research and advocacy group.

The report looked at 366 occupations tracked by the Labor Department and clumped them into three equal groups by wage, with each representing a third of American employment in 2008. The middle third — occupations in fields like construction, manufacturing and information, with median hourly wages of $13.84 to $21.13 — accounted for 60 percent of job losses from the beginning of 2008 to early 2010.

The job market has turned around since then, but those fields have represented only 22 percent of total job growth. Higher-wage occupations — those with a median wage of $21.14 to $54.55 — represented 19 percent of job losses when employment was falling, and 20 percent of job gains when employment began growing again.

Lower-wage occupations, with median hourly wages of $7.69 to $13.83, accounted for 21 percent of job losses during the retraction. Since employment started expanding, they have accounted for 58 percent of all job growth.

The occupations with the fastest growth were retail sales (at a median wage of $10.97 an hour) and food preparation workers ($9.04 an hour). Each category has grown by more than 300,000 workers since June 2009.

Some of these new, lower-paying jobs are being taken by people just entering the labor force, like recent high school and college graduates. Many, though, are being filled by older workers who lost more lucrative jobs in the recession and were forced to take something to scrape by.

...

Over the last few decades, the number of midwage, midskill jobs has stagnated or declined as employers chose to automate routine tasks or to move them offshore.

Job growth has been concentrated in positions that tend to fall into two categories: manual work that must be done in person, like styling hair or serving food, which usually pays relatively little; and more creative, design-oriented work like engineering or surgery, which often pays quite well.

Since 2001, employment has grown 8.7 percent in lower-wage occupations and 6.6 percent in high-wage ones. Over that period, midwage occupation employment has fallen by 7.3 percent.

This “polarization” of skills and wages has been documented meticulously by David H. Autor, an economics professor at the Massachusetts Institute of Technology. A recent study found that this polarization accelerated in the last three recessions, particularly the last one, as financial pressures forced companies to reorganize more quickly.

“This is not just a nice, smooth process,” said Henry E. Siu, an economics professor at the University of British Columbia, who helped write the recent study about polarization and the business cycle. “A lot of these jobs were suddenly wiped out during recession and are not coming back.”

On top of private sector revamps, state and local governments have been shedding workers in recent years. Those jobs lost in the public sector have been primarily in mid and higher-wage positions, according to Ms. Bernhardt’s analysis.

“Whenever you look at data like these, there is this tendency to get overwhelmed, that there are these inevitable, big macro forces causing this polarization and we can’t do anything about them. In fact, we can,” Ms. Bernhardt said. She called for more funds for states to stem losses in the public sector and federal infrastructure projects to employ idled construction workers. Both proposals have faced resistance from Republicans in Congress.

Now just in case you buy into the theory that, yes, the mid-level jobs are gone for good, but if we just train those people who used to do the mid-level skill jobs for the high-skill level jobs, we'll be able to solve the problem, remember that outsourcing and automation isn't just affecting the mid-level job skill category. It's affecting the higher skill categories too.

Let's take a look at what automation is doing:

When five television studios became entangled in a Justice Department antitrust lawsuit against CBS, the cost was immense. As part of the obscure task of “discovery” — providing documents relevant to a lawsuit — the studios examined six million documents at a cost of more than $2.2 million, much of it to pay for a platoon of lawyers and paralegals who worked for months at high hourly rates.

But that was in 1978. Now, thanks to advances in artificial intelligence, “e-discovery” software can analyze documents in a fraction of the time for a fraction of the cost. In January, for example, Blackstone Discovery of Palo Alto, Calif., helped analyze 1.5 million documents for less than $100,000.

Some programs go beyond just finding documents with relevant terms at computer speeds. They can extract relevant concepts — like documents relevant to social protest in the Middle East — even in the absence of specific terms, and deduce patterns of behavior that would have eluded lawyers examining millions of documents.

“From a legal staffing viewpoint, it means that a lot of people who used to be allocated to conduct document review are no longer able to be billed out,” said Bill Herr, who as a lawyer at a major chemical company used to muster auditoriums of lawyers to read documents for weeks on end. “People get bored, people get headaches. Computers don’t.”

Computers are getting better at mimicking human reasoning — as viewers of “Jeopardy!” found out when they saw Watson beat its human opponents — and they are claiming work once done by people in high-paying professions. The number of computer chip designers, for example, has largely stagnated because powerful software programs replace the work once done by legions of logic designers and draftsmen.

Software is also making its way into tasks that were the exclusive province of human decision makers, like loan and mortgage officers and tax accountants.

These new forms of automation have renewed the debate over the economic consequences of technological progress.

David H. Autor, an economics professor at the Massachusetts Institute of Technology, says the United States economy is being “hollowed out.” New jobs, he says, are coming at the bottom of the economic pyramid, jobs in the middle are being lost to automation and outsourcing, and now job growth at the top is slowing because of automation.

“There is no reason to think that technology creates unemployment,” Professor Autor said. “Over the long run we find things for people to do. The harder question is, does changing technology always lead to better jobs? The answer is no.”

Automation of higher-level jobs is accelerating because of progress in computer science and linguistics. Only recently have researchers been able to test and refine algorithms on vast data samples, including a huge trove of e-mail from the Enron Corporation.

“The economic impact will be huge,” said Tom Mitchell, chairman of the machine learning department at Carnegie Mellon University in Pittsburgh. “We’re at the beginning of a 10-year period where we’re going to transition from computers that can’t understand language to a point where computers can understand quite a bit about language.”

The automation trend is accelerating, and as we have seen an increasing financialization of the economy wherein the only thing that matters to companies is quarterly profits and returns, they're happy to lay off reams of employees and replace them with software - whether that it is in a legal department, an accounting department or a school - or outsource those jobs overseas where employees are paid a lot less.

These jobs aren't coming back either and for anybody to think that all of these people can be retrained for high skill level jobs - particularly science and tech jobs - and think that will solve the employment/wage problems, well, they're not paying attention to all the unemployed, underemployed or employed out of their skill science and tech people.

Let's take a look at that from a Washington Post article earlier this year:

Michelle Amaral wanted to be a brain scientist to help cure diseases. She planned a traditional academic science career: PhD, university professorship and, eventually, her own lab.

But three years after earning a doctorate in neuroscience, she gave up trying to find a permanent job in her field.

Dropping her dream, she took an administrative position at her university, experiencing firsthand an economic reality that, at first look, is counterintuitive: There are too many laboratory scientists for too few jobs.

That reality runs counter to messages sent by President Obama and the National Science Foundation and other influential groups, who in recent years have called for U.S. universities to churn out more scientists.

Obama has made science education a priority, launching a White House science fair to get young people interested in the field.

But it’s questionable whether those youths will be able to find work when they get a PhD. Although jobs in some high-tech areas, especially computer and petroleum engineering, seem to be booming, the market is much tighter for lab-bound scientists — those seeking new discoveries in biology, chemistry and medicine.

“There have been many predictions of [science] labor shortages and . . . robust job growth,” said Jim Austin, editor of the online magazine ScienceCareers. “And yet, it seems awfully hard for people to find a job. Anyone who goes into science expecting employers to clamor for their services will be deeply disappointed.”

One big driver of that trend: Traditional academic jobs are scarcer than ever. Once a primary career path, only 14 percent of those with a PhD in biology and the life sciences now land a coveted academic position within five years, according to a 2009 NSF survey. That figure has been steadily declining since the 1970s, said Paula Stephan, an economist at Georgia State University who studies the scientific workforce. The reason: The supply of scientists has grown far faster than the number of academic positions.

The pharmaceutical industry once was a haven for biologists and chemists who did not go into academia. Well-paying, stable research jobs were plentiful in the Northeast, the San Francisco Bay area and other hubs. But a decade of slash-and-burn mergers; stagnating profit; exporting of jobs to India, China and Europe; and declining investment in research and development have dramatically shrunk the U.S. drug industry, with research positions taking heavy hits.

Since 2000, U.S. drug firms have slashed 300,000 jobs, according to an analysis by consulting firm Challenger, Gray & Christmas. In the latest closure, Roche last month announced it is shuttering its storied Nutley, N.J., campus — where Valium was invented — and shedding another 1,000 research jobs.

“It’s been a bloodbath, it’s been awful,” said Kim Haas, who spent 20 years designing pharmaceuticals for drug giants Wyeth and Sanofi-Aventis and is in her early 50s. Haas lost her six-figure job at Sanofi-Aventis in New Jersey last year. She now works one or two days a week on contract at a Philadelphia university. She dips into savings to make ends meet.

“Scads and scads and scads of people” have been cut, Haas said. “Very good chemists with PhDs from Stanford can’t find jobs.”

Largely because of drug industry cuts, the unemployment rate among chemists now stands at its highest mark in 40 years, at 4.6 percent, according to the American Chemical Society, which has 164,000 members. For young chemists, the picture is much worse. Just 38 percent of new PhD chemists were employed in 2011, according to a recent ACS survey.

Although the overall unemployment rate of chemists and other scientists is much lower than the national average, those figures mask an open secret: Many scientists work outside their chosen field.

“They’ll be employed in something,” said Michael S. Teitelbaum, a senior adviser to the Alfred P. Sloan Foundation who studies the scientific workforce. “But they go and do other things because they can’t find the position they spent their 20s preparing for.”

OK, so now we see that there is actually a glut of those trained in high skilled jobs who can't find steady, good-paying work in their fields either.

So what is the cause of all of this?

Easy - more and more of the resources in this country are being sucked up by fewer and fewer people.

The increased financialization of the economy has given the 1% (and really, the .0001%) the opportunity to suck up huge swaths of wealth in the country, use that wealth to hire batteries of lobbyists to get taxes cuts and benefits for their own industries (but only the people at the top of those industries) and squeeze everybody else.

The rest of us are fighting it out for fewer and fewer resources.

Until we address income inequality and redefine what kinds of jobs we value, this problem is not going to get better.

Why do the hedge fundies get to pay a lower rate of tax than the rest of us?

Why are private equity guys like Bain not the Bane of the Nation for functioning as economic predators?

Why are the Too Big To Fail banks allowed to fix and rig and steal with impunity and nobody goes to jail?

Why are the laws and regulations that are put into place primarily benefiting corporations and the financial industry over small business and individuals?

Why do corporations have more rights than individuals?

These are all problems that are leading to the vast gap in income between the very top and the rest of us - we live in the new Gilded Age - and until we solve these problems, income inequality is going to worsen.

It is so much easier to blame schools and teachers for this mess rather than the real culprits - the banksters and hedge fundies and private equity guys who are stealing so much of the world's wealth.

And of course when a guy like Chris Matthews parrots this garbage about schools and teachers, he does so on a corporate-owned entity like NBC that itself benefits from the inequity of the system.

These are big problems, and last year, the Occupy movement was beginning to shine a light on them.

We're back to the same nonsense we have heard before, however - the employment/wage problems are primarily education and skills problem.

But that's bunk - there are fewer and fewer good paying jobs at any level in the economy because our corporate masters have decided that they don't want to pay anybody anything that they absolutely don't have to pay all the while their rigging the system's laws and regulations to make it so that they can steal with abandon.

In short, the overlords have stolen the wealth and they've managed to divert our attention from the real culprits (themselves) with bread and circuses and corporate-owned, media-driven narratives that are, in the end, bullshit.

Time to Occupy.