Today I'm appearing on "To the Point" with Warren Olney, talking about why Americans' wages aren't rising along with productivity. I was joined by Washington Post columnist Harold Meyerson, Harvard Professor and former Medtronic CEO Bill George, and Financial Times DC bureau chief Edward Luce. You can find the segment here.
Before recording, I spent a few minutes jotting down notes before the show to make sure I remembered some Big Facts and had quick access to a few Important Stats. I thought you might be interested, so here they are: my pre-interview notes -- talking points, if you will -- edited so that they form complete sentences.
Would unions save us?
On the one hand, if average Americans had more money, they could spend more money and our economy would be healthier.
On the other hand, I look at where the jobs are growing and I look at Texas, which has low union membership. I look at the MidWest with low wages. Employers are balking right now, at a time of low demand, at the high cost of adding new workers. So our question should be how do we make new workers cheaper? Indeed look at the White House's payroll tax idea, which is designed to do just that. We want workers to be rich. But first, we want them to be hired.
Explain the hollowing out of the middle class.
We see rising demand for highly skilled workers. We rising demand, especially in the early stages of the recovery, for low-wage, low-income workers. And not a lot of demand in the middle.
When we think of metaphors for the American dream, they usually involve stairs and elevators. You start on floor one, you go to school, you get off at floor two, or nine. But the market is really less like an elevator and more like two floors without a staircase to connect them. And the concern is that we're creating one floor of Americans that goes to college and sees rising wages and another floor for jobs that don't pay. In the middle, opportunities for middle-education, middle-paid workers have frozen over the last two decades.
Is college the answer?
The case for college is easy to make: In the last 30 years, real earnings have increased for men who finish college and go on to graduate degrees, while they have fallen for the rest.
But the case against college for everybody is there to: Education costs have grown faster than health care costs in the last decade. Student loan debt has now eclipsed overall credit card loans at $860 billion nationwide.
The seven fastest growing jobs in the recent BLS survey don't require a bachelors degree. The four fastest growing health care jobs require nothing more than a post-secondary vocational award.
Should we call for more debt-fueled education to prepare Americans for millions of jobs that only require moderate on-the-job training?
Is health care killing the middle class?
Health care's growth is a double-edged sword. On the one hand, it is our most important jobs engine. It's added more jobs during the recovery than any industry, and 10 of the 20 fastest growing jobs in the next decade are in health care.
On the other hand, if health care is our most important engine, it's a Porsch engine. Expensive and potentially unaffordable. Health care costs are famously projected to bankrupt the country, but you don't have to do 80-year projections to see their impact on average wages. Between 1999 and 2008, employer-sponsored health insurance premiums increased six times faster than wages. Compensation is rising. Real disposable income is not. And much of the gap is health insurance premiums.
The rising costs of health care giveth and they taketh away. They give us millions our jobs, and taking away our raises.