The major American political developments of recent years have been the ascendancy of far left socialist thinking characterized by the Sanders-Warren-AOC-The Squad wing of the Democratic Party, along with Black Lives Matter and a push to end inequalities that are perceived as racial and capitalist-based. Much of the political rhetoric has focused on reducing social and economic inequalities; promoting economic growth and expansion is out politically, while militantly pursuing the goal of income and racial equality is in.
Increased income inequality has occurred fairly continuously for decades, simultaneously with growing college educational attainment. Despite their liberal political orientation, the elite private universities are perceived as bastions of white elites, playgrounds for an academic aristocracy centered around white privilege. Getting a college degree is expensive, largely an unintended consequence of federal student loan programs that have scared many low income Americans, disproportionately ethnic minorities, away from college. Stealing partly from the late Milton Friedman, the two most anti-Black federal statutes are the ones setting minimum wages and the one providing for federal student loan assistance.
On top of that, as Bryan Caplan, myself, and others have said: college is mainly a very expensive screening device separating the best and brightest in terms of vocational potential from others, while at the same time providing relatively few specific practical vocational skills. College educated highly productive Americans got most of their labor market edge through innate intelligence and drive, network connections from college, even on the job training not directly related to their collegiate learning.
Enter my friend George Leef of the James Martin Center, who told me about some new research by one of Americas foremost labor economists, Edward Lazear of Stanford. Prof. Lazear is a former Chair of the Presidents Council of Economic Advisers, serving admirably during the 2008 financial crisis.
Lazear notes that there has been a growing gap worldwide in recent years between high and low wage earners, in countries with widely different approaches towards relieving poverty (e.g, the U.S. and Sweden). The reason, Prof. Lazear notes and I heartily concur, is that the productivity of the high wage earners has risen faster over time than that of those receiving lower compensation. If you want to reduce employment-induced income inequality, you try to increase the productivity of the lower wage workers relative to higher wage ones.
Lazear suggests that Americans invest relatively little in true vocational education, educating students either in high school or those with high school diplomas needing some training to gain an employable skill, lasting anywhere from a few months to perhaps two years. I have interviewed heads of some private, often for-profit institutions, training students for highly specialized nicely paying jobs, such as serving as court reporters or computer coders. Some community colleges also do this sort of training well and relatively cheaply. The evidence is that some of these schools have a pretty good record of providing employable, relatively high paid skills to trainees at a cost far less than that associated with earning a bachelors degree.
Americans have often stigmatized kids going to vocational high schools, or those skipping college and going to some form of trade school, unlike the Germans who consider learning a blue collar skill to be honorable and respectable, often leading to jobs paying almost the same as what college graduates earn after graduation. Why dont we stop promoting college for all when it is clearly inappropriate? Why dont we provide subsidies for kids wanting to go into court reporter or welding training, or become computer programmers via coding academies? Why dont we give vouchers directly to students (unlike Pell Grants), usable in paying fees for non-degree work training programs?
A cautionary note. As bad and inefficient as higher education can sometimes be, K-12 schools, with far less competition, monopoly providers and large monopoly suppliers of labor services (teachers unions) and no discipline imposed through market prices, is even worse. It would be critical that expanded vocational education initiatives be opened to all providers, including proprietary ones. I ask: Why should we subsidize upper middle class kids getting sociology degrees from the University of Last Resort when some lower income kids hungry to learn usable skills go without funding?