Is Better Education the Answer to Dwindling Job Creation?

BY Paul Solman  April 10, 2012 at 11:50 AM EDT

College students in a science lab
Students participate in a science lab at the University of Illinois-Springfield. Creative Commons photo courtesy of Flickr user jeremy.wilburn.

Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Tuesday’s query:

Name: Walter

Question: I keep hearing about how productivity has taken off, especially since the financial meltdown of 2008, and that technological innovation has contributed to the problem of fewer jobs available. The answer is always talked about in terms of more and better education. But that doesn’t add up. If people are better educated, that doesn’t mean there will be more jobs for them to take. Additionally, if they’re better educated, they’ll likely be inventing more technology to automate even more jobs. Do you see my point or do you think education will solve the problem?

Making Sense

Paul Solman: Well, productivity has slowed substantially as we’ve moved further from the meltdown. The usual explanation for the initial surge was that companies lopped off lots of workers after the crash but when business picked up, the firms didn’t rehire. The definition of productivity is output per worker. More output; fewer workers? Productivity goes up.


This would tend to explain one of the most remarkable economic facts of the moment: The ratio of profits to wages in this country has never been higher. In the simplest terms, the less I have to pay you, relative to your output, the more I get to keep for myself.

In short, I see your problem clearly. Moreover, I devoutly wish that education will, as you put it, “solve the problem.” But when I note that only 30 percent of Americans get a four-year college degree, I wonder. When I notice that a conservative like Charles Murray consigns another 30 percent of Americans to a dysfunctional lower caste, I wonder. When I talk to colleagues like a post-doc at Yale who worked in a remedial program in upstate New York and hear of his disillusionment, I wonder. When I listen to another colleague talk about the haplessness of the constituents at the soup kitchen at which he volunteers, I wonder. And when I dine, as I did Monday night, with a graduating senior whose software company is going so well, he picked up the tab, I wonder — at the growing divide between the can-do’s and can’t's and the increasingly economic inequality that has characterized it. His two-person firm is a prime example of greater productivity. No one can argue that he isn’t getting more from the world, using less. But both he and I worry about the implications for most American “workers” and what role they will play in an ever more technologically driven economy.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions