It’s Not What You know

In fact, it’s not who you know either. It may just be what you have.

I’ll be the first to admit that once I start straying into the subject of economics, I’m probably going to find myself very quickly in water over my head. Nevertheless, a few things showed up in my news feeds lately that I can’t help stringing together somehow. I mean, when a president goes to India and sings the praises of outsourcing — despite having strong bases of support in some of the states hardest hit by it — I think it’s at least worth a mention.

“People do lose jobs as a result of globalization, and it’s painful for those who lose jobs,” Mr. Bush said at meeting with young entrepreneurs at Hyderabad’s Indian School of Business, one of the premier schools of its kind in India. Nonetheless, the president said, “globalization provides great opportunities.”

Mr. Bush strongly defended the outsourcing of American jobs to India as the reality of a global economy, and said that the United States should instead focus on India as a vital new market for American goods. Hyderabad is a center of India’s booming high-tech industry, and was also on Mr. Clinton’s itinerary when he visited India in 2000.

“The classic opportunity for our American farmers and entrepreneurs and small businesses to understand is, there is a 300 million-person market of middle-class citizens here in India, and that if we can make a product they want, that it becomes viable,” Mr. Bush said at the business school.

There’s some irony in the fact that Bush made his outsourcing remarks while standing in the middle of a business school, particularly since he also touted education as the cure-all for issues stemming from outsourcing.

Bush acknowledged the difficulty of the outsourcing debate Wednesday.

“It’s true that a number of Americans have lost jobs because companies have shifted operations to India. And losing a job is traumatic. It’s difficult. It puts a strain on our families,” he said. But instead of responding with “protectionist policies,” Bush said the United States needs to improve education and job training for displaced workers.

There’s just one problem. It doesn’t quite work, because education isn’t enough anymore.

Education — at least as delivered by most of the nation’s colleges, universities and technical schools — is no longer quite the economic cure-all it once was, nor the guarantee of financial security Americans have come to expect from college and graduate degrees.

“More education has been the right answer for the past few decades,” said Princeton University economist and former Federal Reserve Vice Chairman Alan S. Blinder, “but I’m not so convinced that it’s the right course” for coping with the upheavals of globalization.

Not that Blinder or other experts think workers would be better off not going to school. Rather, they point to emerging evidence that education may not offer as much protection against the effects of globalization as Bush and others claim.

“One could be educationally competitive and easily lose out in the global economic marketplace because of significantly lower wages being paid elsewhere,” said Sheldon E. Steinbach, general counsel of the American Council on Education, an umbrella group that represents most of the nation’s major colleges and universities.

But the real “money quote” that stands out to me is this one.

“What’s missing here from both parties is a global economic strategy and a worker adjustment strategy,” said Anthony P. Carnevale, a scholar at the National Center on Education and the Economy who was appointed to major commissions by Presidents Reagan and Clinton.

“When they don’t know what else to do,” he remarked, “there’s a tendency among politicians to stand up and say ‘education.’ “

“Worker adjustment strategy”? If manufacturing jobs and white-collar jobs are going overseas, what kind of “worker adjustment strategy” is even possible? I’d have to dig way back into my nascent reading of Chomsky to find this, but I seem to remember him making the point of how much of American polity and politics in the Third World was about creating markets and cheap labor for American corporations. Well, it worked so well that now our political leaders from both parties have pretty much reduced their economic policies down to one basic point: keep rich people happy.

There is an economic theory, the prevailing one, that says, that’s a good thing. If you have worker insecurity then workers are too frightened to ask for higher wages and benefits and that makes for a healthy economy because then profits are high and maybe companies will invest. In fact the theory behind the economy is really quite simple, you’ve got to keep rich people happy so maybe they’ll invest and something will trickle down. And you have to keep everybody else, meaning the great mass, insecure because then they won’t ask for a thing. There’s also another thing that follows, you have to keep them frightened because if they’re not frightened then they’re not going to accept it, so there’s a constant pressing of the panic button to keep the population frightened, so they won’t care if their wages are stagnating or their working hours are going up. They’re insecure they don’t know if they will have a job tomorrow. Outsourcing is a very marginal partof it. This is the way the economy has been designed.

Where I part with Chomsky is on the notion that outsourcing is a marginal part of it. In fact, it seems to be the last piece of the puzzle to me, if you believe that the big reason corporations send jobs overseas is to access cheap labor with the added perk of not having to deal with benefits as well, or lower-cost benefits at the very least.

If that’s true, and if it’s true that education is no longer a way up and out of the economic muck, then it seems to me that the only “worker adjustment plan” remaining is the one that no Democratic or Republican politician has or will ever speak of. None of them will ever say to American workers, “What all this means is that you are going to have less, and you’ll have to work harder to get it and keep it. Permanently.”

Because there are only two ways I can think of for American’s to compete against massive workers in other countries who are willing to work for lower wages and little or no benefits. One is to raise the standards for workers in other countries. The other is to simply worker harder to have less, and be resigned to it if not satisfied with it.

If education isn’t a way out anymore…what is?

About Terrance

Black. Gay. Father. Buddhist. Vegetarian. Liberal.
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One Response to It’s Not What You know

  1. Julia says:

    Oh my GOD!  Bush is rewarding big business at the expense of the American worker!

    Who will ever believe that!

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