22 February 2020
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John Goodman
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For the U.S. economy the news is bad and worse
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Even the editor emeritus at U.S. News & World Report isn't buying the spin.

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The real unemployment rate is around 15 percent and we're only setting ourselves up to make it worse


Jobs

Job seekers have their resumes reviewed at a job fair expo in Anaheim, Calif.

It's time to adjust the gambit that people in all situations commonly use when reporting results to a supervisor: What do you want first, the good news or the bad? The formula that more aptly applies to the latest indicator of America's economic predicament is: What do you want first, the bad news or the even worse news?

The bad news is the disappointing June unemployment numbers released by the Bureau of Labor Statistics. The worse news is that we are failing to train tomorrow's labor force for employment in a world of accelerating competition.

Jobs, first. The headline unemployment number remains at 8.2 percent, although President Barack Obama cited the 84,000 new private sector jobs last month as "a step in the right direction." He had the grace to add: "But we can't be satisfied." He can say that again. That 8.2 percent only measures people who have actively applied for a job in the last four weeks by going to an interview or filling out an application. It is not a relevant measure. People who have been unemployed for many months don't go through the business of applying for a job every four weeks.

[See a collection of political cartoons on the economy.]

Given that the median period of unemployment is now in the range of five months, vast numbers who want to work are just not counted. If we include, as we should, people who have applied for a job in the last 12 months, and those employed part time who want full-time work, the real unemployment number is closer to 15 percent. And we've made virtually no progress in reducing this number. We need 150,000 jobs every month just to take into account the people entering the labor force. Today we are looking at monthly job creation estimates of only 75,000 over the last three months.

A more revealing clue to where we are lies in the term "structural unemployment," which indicates where jobs have vanished because of basic changes in how the economy works. In this area, people have little or no prospect of returning to the jobs they once had.

This is a fundamental fact similar to what happened to farm workers over several decades with the advent of threshing machines and other devices, easy credit, land consolidation, and the like. Those workers found jobs in the new factories, but today manufacturing is the great source of our structural unemployment. We've lost some 6 million manufacturing jobs in the last decade or so. Automation has replaced many of them, but today, so different from earlier decades, there is another big jobs thief: globalization. Work is shipped abroad because of competition in skills, speed, and pay in all those places called Somewhere Else.

Here now is the worse news: America is adding to the length of unemployment lines in the future by falling behind today in skill areas where global competition has become so intense. Too few of our younger people are benefiting from what is called STEM education. STEM stands for science, technology, engineering, and mathematics, the human capital at the core of any productive economy.

America has long been a STEM leader. We have dominated the world in innovation over two centuries but most recently in computer and wireless power, the development of the Internet, and cellphones, and with those innovations came well-paying jobs. But our leadership is at risk.

A stunning illustration of how far America has started to lag in training its youth is that we are only one of three countries in the 34-member Organization for Economic Cooperation and Development where the youngsters are not better qualified than their fathers and mothers. Men and women ages 55 to 64 have the same or better education than the 25-to-34 generation. The younger workers in most other OECD countries are much better educated than those nearing retirement.

This is an astonishing commentary on the limits of, and the deterioration of, America's system of public education. The National Academies warned years ago that the United States would continue to lose ground to foreign economic rivals unless the quality of its science education improved. In a 2010 report by the academies, an advisory group on science and technology, the United States ranked 27th among 29 wealthy countries in the proportion of college students with degrees in science and engineering. In a larger study conducted by the OECD in 2009, American 15-year-olds were 31st in math and 23rd in science. Yet another study found American 12th graders near the bottom of students from 20 nations, and this doesn't even focus on the achievement gap between low-income and minority students and their peers.

Large parts of our student population are coming out of school without a top-notch education in the hard sciences, just at the time when we need a well-trained, technically competent workforce to manage and staff the science and technology businesses that are the most rapidly growing businesses and the ones that yield the higher-paying jobs.

The most critical step that we must take is strengthening the public school curriculum. The central issue here: increasing the number of qualified math and science teachers. Years of research has shown that of everything within the control of a school, what counts most is the quality and effectiveness of teachers.

Astonishingly, according to recent studies, about 30 percent of high school math students and 60 percent of those in the physical sciences are taught by instructors who either did not major in the subject or are not certified to teach it. How in the world can we expect our students to master science and technology when their teachers may not have mastered it?

We have no time to lose. As former President Bill Clinton wrote last year, "No one can take the future away from us. But we can take it away from ourselves." We simply cannot solve this problem by using the same kind of thinking that we used when we created the problem. There are three courses of action:

1. We must develop a national program to recognize and reward strong instructors in the STEM fields and create more STEM-focused high schools and community colleges. (U.S.News & World Report has been pleased to focus on the issue by partnering with more than 50 other organizations in two conferences this summer and last fall.)

2. We must also be willing to open ourselves up to an immigration policy that permits, indeed encourages, teachers with the brains, talent, and special skills to enhance American education in the world of STEM. Those who would close doors here have closed minds. Imaginative teachers will enhance American innovation and competitiveness. It is literally a national disgrace that we restrict the number of foreign teachers who can come in and help us out. Nothing short of a major national effort to prepare tens of thousands, even hundreds of thousands, of new teachers in STEM fields must be on our agenda.

3. We must devise some kind of state-by-state scorecard to assess the quality of STEM education and measure the effectiveness of STEM programs on a nationwide basis. U.S. News ranks the country's best high schools for STEM, and we plan to expand the list in the coming year. But we need more such tools. We have the best colleges and universities in the world, a lead we must maintain, but this is not a question of just producing more Ph.D.'s. We need the technical skills that lead to original creativity, which means supporting community colleges that excel in the critical areas of science and technology.

Winston Churchill once famously said that "Americans can always be counted on to do the right thing, after exhausting all other possibilities." Well, we have done enough of that. We have wasted time in pursuing dead-end alternatives.

This is the time to do the right thing, and we know what it is. What it takes is national leadership. Otherwise, we will have students who will translate the scientific principle that light travels faster than sound into the perception that they may appear bright until you hear them speak.

 

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