Every time I read a Thomas Friedman article, I have to compare it to the Thomas Friedman op-ed generator at McSweeney’s. Today though, formulaic writing wasn’t Friedman’s problem. His problem instead was that his narrative doesn’t work.
Friedman’s basic argument is a flat world justification of pursuing higher education of some kind and focusing stimulus efforts on increasing educational access and attainment. He writes
Because when Clinton first employed his phrase [“work hard and play by the rules”] in 1992, the Internet was just emerging, virtually no one had e-mail and the cold war was just ending. In other words, we were still living in a closed system, a world of walls, which were just starting to come down. It was a world before Nafta and the full merger of globalization and the information technology revolution, a world in which unions and blue-collar manufacturing were still relatively strong, and where America could still write a lot of the rules that people played by.
That world is gone. It is now a more open system. Technology and globalization are wiping out lower-skilled jobs faster, while steadily raising the skill level required for new jobs. More than ever now, lifelong learning is the key to getting into, and staying in, the middle class.
So, as a result, like Estonia, we should train our kids better, which means educate educate EDUCATE. Instead of writing this article, he could have tweeted “You guys, skill-biased technical change is a thing,” but, you know, oh well.
The policy prescription is something I’m on board with, but Friedman’s rationale is suspect. First, the shift from “work hard and play by the rules” to “work harder, regularly reinvent yourself, obtain at least some form of postsecondary education, make sure that you’re engaged in lifelong learning and play by the rules” doesn’t indicate that “work hard and play by the rules” no longer applies. It does indicate that the rules have changed, if something called “the rules” ever actually existed, and that it’s still important to work hard and play by them. Working hard just happens to include regular self-reinvention and a more secure place in the education arms race.
What’s really suspect though is Friedman’s exegesis. The logic is something like this: foreigners are well-educated now, and careerism requires harder work than before, so it’s probably true that careerism requires harder work because foreigners are well-educated now. People need to know about this, and urgently! If you’d written a book called The World is Flat though, this narrative of international competition forcing Americans to work harder would be extremely appealing. If it were accurate and skill-biased technical change plus globalization were making low-skill workers extremely uncompetitive, you’d probably think you understood the world economy pretty well. Since 1992 is Friedman’s new world date, I looked at some BLS data from then to 20121.
First I looked at employment levels to figure out if the composition of working Americans in the workforce is changing.
It is. Indexing from the 1992 employment level, holders of a four-year bachelors have added about 75% of the jobs they had in 1992, while the other two groups have declined slightly over the period. Score one for Friedman, kind of. Endpoint comparison says that there are fewer jobs for high school grads and those without high school degrees in 2012 than there were in 1992, but it would be extremely difficult not to notice the timing of the biggest decline — the current recession — or that several times post-1992 the employment level returned to or was above its 1992 level for both low-skill groups. Regardless, the percentage of the total workforce with a college degree is obviously increasing.
Second, I looked at employment to population ratios…
…which didn’t reveal very much. It’s probably true that the number of people 25 and older with less than a high school degree is declining, which may explain the slight upward trend in that group’s employment to population ratio from ’92 to 2008, but I’m more confused about what’s going on with the college degree group. These are the people who, if you buy Friedman’s argument, should be more in demand and more insulated from the rest of the world’s development, but instead, job growth for this group hasn’t kept up with the population change, and not only in this recession. For some reason, while the employment/population ratio hadn’t fallen below 78 percent in the period from 1992 to 2000, the early 2000s saw its range shift from between 78 and 79% to hovering around 76%. What exactly is going on here I’m not sure, but Friedman definitely didn’t score a point. Finally, I looked at the unemployment rate for these three groups and compared them to the national average.
This is where I expected to be able to find something serious. Since the unemployment rate shows only those who can’t find work who are looking for it, Friedman’s flat world interpretation suggested something obvious: an open world should penalize low-skill groups and reward high-skill groups, or, since the open world means firms don’t have to hire low-skill American workers and can instead hire high-skill foreign workers, low-skill workers should have trouble finding employment at times high-skill workers don’t. As a result, the advantage of having a college degree should be widening. Instead, it’s varied smoothly between six and ten points in the last two decades, and is right back where it started in 1992. What’s driving unemployment for each group doesn’t seem to be educational attainment in the rest of the world, but rather the state of the national economy.
The point here isn’t that there aren’t advantages to education. Rather, the argument is that the employment penalty of not being educated is about the same now as it was in 1992 and hasn’t changed significantly in that period. Note that I’m ignoring wages partly because I have had about enough of navigating the BLS website for today.
I have a theory (it is not an original theory) for why Friedman’s predictions haven’t punished the low-skill group as he says it should — high-skill international workers aren’t competing with low-skill domestic workers. The world high-skill group’s population has grown significantly and often provides abstract services, which can easily be outsourced, while the domestic low-skill group’s population has shrunk and often provides concrete, immediately present services that can’t be outsourced. The low-skill group isn’t penalized because it isn’t competing with the high-skill group. I don’t know where to look for data on that though.
1 – All data are from the BLS Current Population Survey. If anyone knows how to trick the BLS website into graphing several series in the same space, please let me know.
The Institute for Old Economic Thinking 