The origins of our highly unequal economy are in the 1970s, when a new political-economic system emerged, neoliberalism, which made free markets the goal of all decision making and policy. While championed by the Republican Party, most Democrats eventually went along as well.
Under neoliberalism, unions would be crushed, minimum wage increases rare and manufacturing employment shipped overseas. The social welfare state would be rolled back, industries deregulated, taxes cut and public services privatized. The economy would be measured by the stock market, which very few workers have a significant stake in. As a result, wages stagnated for a significant majority while only a select few prospered.
Understandably, this agenda was dreadfully unpopular. “All decision making will now be based solely on the economic interests of owners and shareholders,” was not a Ronald Reagan applause line. The public wants good paying jobs. The public wants the benefits of economic growth to be shared more equally among all.
To enact this unpopular agenda, then, corporate leaders made the discussion about jobs and wages solely about education and training, thereby getting themselves off the hook for their own self-interested actions. They made it about us, as workers.
We were told that we lived in a knowledge economy. There were plenty of high-education, high wage jobs, but the real problem was that workers were not getting college degrees, or the right kind of degrees. According to business leaders and many policy makers, the education system was failing and had to be reformed.
But the so-called knowledge economy is a horribly destructive myth that’s nearly killed public education and led to increasing inequality. It’s a fantasy.
In Reagan’s America, official data showed that only a small minority of jobs required college degrees. Today, this is still the case. Only two of the top 10 most numerous occupations in Minnesota require education beyond high school. And many jobs requiring college degrees pay low wages.
Yet the widespread belief in the mythical knowledge economy has allowed education to be blamed for labor market outcomes well beyond its control. As a result, decades of misplaced policies have resulted, including the gradual defunding of public higher education, leading to a student debt crisis.
In higher education, corporate interests now push for the widespread implementation of online education and elimination of liberal arts programs to ensure that workers are getting the “right” skills. The current proposal to balance the budget at St. Cloud State University is an example of this.
Minnesota has a huge budget surplus. But because austerity budgeting is the default policy in public higher education, the administration at St. Cloud is proposing the elimination of several programs and faculty positions, the significant expansion of online education (on the assumption that it’s cheaper), and creation of programs presumably better able to meet market demand.
Yet St. Cloud will almost certainly continue to buy more software, hire more consultants and add more non-academic programming – much of which will be presented as game changers — even as it hollows out its educational mission. For example, recently the university announced the addition of e-sports to great fanfare.
But the game can never change because higher education cannot change the jobs, wages and individual debt levels in the real economy. Still, corporate reformers continue to define education – their version of education – as the cure-all for stagnant wages and growing inequality.
Sending increasing numbers of people to college cannot change the number of jobs in warehouses or food services or home health care. Rather, it creates large numbers of highly educated, under-employed, underpaid and highly indebted workers. And in a brazenly political manner, the education system is blamed for these structural realities.
Judging higher education programs by their purported “labor market value” – the current business term adopted by higher education reformers – further reveals the power of the mythical knowledge economy within education itself. Elevating programs in business fields because many of these graduates make several hundred thousand dollars while eliminating liberal arts programs because many graduates earn much less in jobs requiring bachelor’s degrees says nothing whatsoever about the merits of any programs or the qualities of the instruction that students receive.
Nor does graduating more engineering or political science or English majors create more jobs for individuals seeking work in these areas. The closure of numerous law schools in recent years clearly shows that increasing the supply of educated workers cannot create demand.
But until we realize the simple fact that the education system cannot control the labor market, k-12 and higher education will be wrongfully punished for things well beyond their control.
Before our education system is eroded beyond recognition, let’s get back to reality. We must reclaim the many purposes of education in a democracy and refocus the discussion of jobs and wages where it belongs – with employers, policy makers, and workers themselves.
Neil Kraus is a professor of Political Science at the University of Wisconsin, River Falls. He is the author of three books, including the “The Fantasy Economy: Neoliberalism, Inequality, and the Education Reform Movement,” which will be published this fall.
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