“We said everyone is going to have to have a secondary education,” said Stanford University economist Paul Romer. “That was what the high school movement in the early part of the twentieth century was all about.” As economic historians have demonstrated in a variety of research (see particularly the work of Harvard economists Claudia Goldin and Larry Katz), both technology and trade are making the pie bigger, but they are also shifting the shares of that pie away from low-skilled labor to high-skilled labor. As American society produced more higher-skilled people by making high school mandatory, it empowered more people to get a bigger slice of the bigger, more complex economic pie. As that century progressed, we added, on top of the high school movement, the GI Bill and the modern university system.
“These were big ideas,” noted Romer, “and what is missing at the moment is a political imagination of how do we do something just as big and just as important for the transition into the twenty-first century as we did for the nineteenth and twentieth.” The obvious challenge, Romer added, is to make tertiary education, if not compulsory, then government-subsidized for at least two years, whether it is at a state university, a community college, or a technical school. Tertiary education is more critical the flatter the world gets, because technology will be churning old jobs, and spawning new, more complex ones, much faster than during the transition from the agricultural economy to the industrial one.
Educating more people at the tertiary level has two effects. One is that it produces more people with the skills to claim higher-value-added work in the new niches. And two, it shrinks the pool of people able to do lower-skilled work, from road maintenance to home repair to Starbucks. By shrinking the pool of lower-skilled workers, we help to stabilize their wages (provided we control immigration), because there are fewer people available to do those jobs. It is not an accident that plumbers can charge $75 an hour in major urban areas or that good housekeepers or cooks are hard to find.
America's ability from the mid-nineteenth century on into the midtwentieth century to train people, limit immigration, and make low-skilled work scarce enough to win decent wages was how we created a middle class without too disparate an income gap. “Indeed,” noted Romer, “from the end of the nineteenth century to the middle of the twentieth, we had a narrowing of the income gap. Now we have seen an increase of that gap over the last twenty or thirty years. That is telling us that you have to run faster in order to stay in the same place.” With each advance in technology and increase in the complexity of services, you need an even higher level of skills to do the new jobs. Moving from being a farmhand to a phone operator who spoke proper English and could be polite was one thing. But moving from being a phone operator after the job got outsourced to India, to being able to install or repair phone-mail systems-or write their software—requires a whole new leap upward.
While expanding research universities on the high end of the spectrum is important, so is expanding the availability of technical schools and community colleges. Everyone should have a chance to be educated beyond high school. Otherwise upper-income kids will get those skills and their slice, and the lower-income kids will never get a chance. We have to increase the government subsidies that make it possible for more and more kids to attend community colleges and more and more low-skilled workers to get retrained.
JFK wanted to put a man on the moon. My vision is to put every American man or woman on a campus.