Evidence of Intelligent Life in the Economics Profession
By Dean Baker, published by Al Jazeera AmericaLast month, former Clinton Treasury Secretary and top Obama adviser Larry Summers ripped into those arguing that more education is the answer to the country's inequality problems:
"The core problem is that there aren't enough jobs. If you help some people, you could help them get the jobs, but then someone else won't get the jobs. Unless you're doing things that have things that are affecting the demand for jobs, you're helping people win a race to get a finite number of jobs."
He made these comments at a conference put on by the Robert Rubin funded Hamilton Project held at the Brookings Institution.
If the significance of these comments is not clear, the most important economic figure of the mainstream of the Democratic Party was demolishing one of the party's central themes over the last two decades. He was arguing that the problems of the labor force -- weak employment opportunities, stagnant wages, and rising inequality -- were not going to be addressed by increasing the education and skills of the workforce. Rather, the problem was the overall state of the economy.
The standard education story puts the blame for stagnant wages on workers. The key to getting ahead is getting a good education. The story Summers was telling at Brookings is that the blame is on the people who design economic policy. It is their fault that workers aren't able to secure decent paying jobs.
Read the rest of the article here.
If additional evidence were needed, California's low-wage workers earn less than in 1979, study shows
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