The mood in the United States has become decidedly pessimistic. The middle class is being squeezed and most Americans think our country is going in the “wrong direction.” Fareed Zakaria, writing in Time Magazine’s current cover story, believes that to recapture the ‘American Dream’ our country will have to accept the changing nature of the world and adapt by renewing our investment in advanced education and innovation.
It is important to remember that recent American prosperity is not simply a product of an innovative American spirit — a point Zakaria beautifully made a year ago on the cover of Newsweek in which he cited a report by the Breakthrough Institute. Zakaria points to three factors that facilitated America’s unprecedented economic prosperity throughout the last half century. The end of WWII posed a unique opportunity for America — much of the industrial world laid in ruins and of the war’s victors only the U.S. remained mostly unscathed . America took full advantage of the opportunity, providing sanctuary for the world’s greatest minds while simultaneously investing vast sums in education and technological innovation, primarily through R&D.
The confluence of these three factors laid the foundation for half a century of nearly uninterrupted American prosperity, even in the face of emerging economic challengers. Most importantly, though, is the question posed in Zakaria’s 2009 piece “Is America Losing Its Mojo?”, how long can we reap the rewards of investments made long ago?
Today, the economic situation in the United States has become dire. While emerging economies continue to add jobs, America’s unemployment rate continues to hover around ten percent. Hit hardest by the recession has been a shrinking middle class:
“In between are the skilled manual workers and those in white collar operations like sales and office management. These jobs represent the beating heart of the middle class. Those in them make a decent living, usually above the median family income ($49,777), and they mostly did fine in the two decades before 2000. But since then, employment growth has lagged the economy in general. And in the Great Recession, it has been these middle-class folks who have been hammered. Why? Autor is cautious and tentative, but it would seem that technology, followed by global competition, has played the largest role in making less valuable the routine tasks that once epitomized middle-class work.”
Yet the policy debate in the U.S. has hovered around the short sighted policy questions of stimulus versus debt reduction, rather then asking the tougher question of whether we have overdrawn on the savings and investments of past generations. To Zakaria, at least, it is apparent that America will have to stop trying to simply hold the line on old jobs and instead create new ones.
The strategy Zakaria lays out for “How to Restore the American Dream” is two fold. First, America must catalyze job growth by creating new industries. It is through technological innovation and a first-mover’s advantage that America will compete for jobs again. This means large scale federal investment in the R&D that can lead to technological breakthroughs: “Everyone agrees that the best way to create good jobs in the U.S. is to create new industries and companies and to innovate within old ones. This means large investments in research, technology and development.”
But these new jobs can’t just be any jobs — they must be ones which can’t be outsourced. This means focusing on the creation of complex and high tech jobs. “The only good jobs that will stay in the U.S. are jobs related to knowledge and innovation,” write Zakaria. To fully reap the rewards of investments in R&D, the U.S. will need to ensure it has a work force capable of filling these new jobs.
High skilled jobs will necessitate a renewed investment in human capital. Currently the U.S. is in no shape to provide a highly skilled science based work force. The nation’s recent STEM education woes — documented most notably by the National Academies’ in “Rising Above the Gathering Storm“ – have left our workforce without the tools to compete. The effects of our dilapidated education system are only beginning to be felt; for example, in the near future America will have a shortage in skilled energy-related workers. Science and engineering graduates constitute only one-third of U.S. bachelor’s degrees, compared to 63 percent in Japan, 53 percent in China and 51 percent in Singapore. Becoming competitive in job creation will necessitate and investment in both K-12 STEM education and job retraining for the American worker:
“But the path to good jobs for the future is surely to expand apprenticeship programs substantially so industry can find the workers it needs. This would require a major initiative, a training triangle in which the government funds, the education system teaches and industry hires — though to have an effect, the program would have to be on the scale of the GI Bill.”
Such an investment in both STEM education and technical training would allow for America to compete for skilled jobs both now and in the future.
An essential part of the American identity is ensuring that our children can inherit a higher quality of life then we were privy to. Right now this goal looks unattainable, but re-investing in our workers and our innovation infrastructure could make this dream for the next generation the American reality that we have enjoyed. This will require a comprehensive approach to stimulating a clean energy economy here in America, and it will have to happen soon.