The awful truth: education won't stop the west getting poorer - The Guardian

drc

From The Guardian;

http://www.guardian.co.uk/commentisfree/2011/feb/28/education-jobs-middle-class-decline

The awful truth: education won't stop the west getting poorer
Skilled jobs will go to the lowest bidder worldwide. A decline in middle class pay and job satisfaction is only just beginning

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Peter Wilby
guardian.co.uk, Monday 28 February 2011 21.30 GMT

Western Europeans and Americans are about to suffer a profound shock. For the past 30 years governments have explained that, while they can no longer protect jobs through traditional forms of state intervention such as subsidies and tariffs, they can expand and reform education to maximise opportunity. If enough people buckle down to acquiring higher-level skills and qualifications, Europeans and Americans will continue to enjoy rising living standards. If they work hard enough, each generation can still do better than its parents. All that is required is to bring schools up to scratch and persuade universities to teach "marketable" skills. That is the thinking behind Michael Gove's policies and those of all his recent predecessors as education secretary.

But the financial meltdown of 2008 and the subsequent squeeze on incomes is slowly revealing an awful truth. As figures out last week from the Office for National Statistics show, real UK wages have not risen since 2005, the longest sustained freeze in living standards since the 1920s. While it has not hit the elite in banking, the freeze affects most of the middle class as much as the working class. This is not a blip, nor the result of educational shortcomings. In the US, which introduced mass higher education long before Britain, the average graduate's purchasing power has barely risen in 30 years. Just as education failed to deliver social democratic promises of social equality and mobility, so it will fail to deliver neoliberal promises of universal opportunity for betterment.

"Knowledge work", supposedly the west's salvation, is now being exported like manual work. A global mass market in unskilled labour is being quickly succeeded by a market in middle-class work, particularly for industries, such as electronics, in which so much hope of employment opportunities and high wages was invested. As supply increases, employers inevitably go to the cheapest source. A chip designer in India costs 10 times less than a US one. The neoliberals forgot to read (or re-read) Marx. "As capital accumulates the situation of the worker, be his payment high or low, must grow worse."

We are familiar with the outsourcing of routine white-collar "back office" jobs such as data inputting. But now the middle office is going too. Analysing X-rays, drawing up legal contracts, processing tax returns, researching bank clients, and even designing industrial systems are examples of skilled jobs going offshore. Even teaching is not immune: last year a north London primary school hired mathematicians in India to provide one-to-one tutoring over the internet. Microsoft, Siemens, General Motors and Philips are among big firms that now do at least some of their research in China. The pace will quicken. The export of "knowledge work" requires only the transmission of electronic information, not factories and machinery. Alan Blinder, a former vice-chairman of the US Federal Reserve, has estimated that a quarter of all American service sector jobs could go overseas.

Western neoliberal "flat earthers" (after Thomas Friedman's book) believed jobs would migrate overseas in an orderly fashion. Some skilled work might eventually leave but, they argued, it would make space for new industries, requiring yet higher skills and paying better wages. Only highly educated westerners would be capable of the necessary originality and adaptability. Developing countries would obligingly wait for us to innovate in new areas before trying to compete.

But why shouldn't developing countries leapfrog the west? Asia now produces more scientists and engineers than the EU and the US put together. By 2012, on current trends, the Chinese will patent more inventions than any other nation. As a new book – The Global Auction (by sociologists Phillip Brown, Hugh Lauder and David Ashton) – argues, the next generation of innovative companies may not be American or British and, even if they are, they may not employ American or British workers.

It suggests neoliberals made a second, perhaps more important error. They assumed "knowledge work" would always entail the personal autonomy, creativity and job satisfaction to which the middle classes were accustomed. They did not understand that, as the industrial revolution allowed manual work to be routinised, so in the electronic revolution the same fate would overtake many professional jobs. Many "knowledge skills" will go the way of craft skills. They are being chopped up, codified and digitised. Every high street once had bank managers who used their discretion and local knowledge to decide which customers should receive loans. Now software does the job. Human judgment is reduced to a minimum, which explains why loan applicants are often denied because of some tiny, long-forgotten overdue payment.

Brown, Lauder and Ashton call this "digital Taylorism", after Frederick Winslow Taylor who invented "scientific management" to improve industrial efficiency. Call centres, for example, require customers to input a series of numbers, directing you to a worker, possibly in a developing country, who will answer questions from a prescribed package. We are only at the beginning; even teaching is increasingly reduced to short-term, highly specific goals, governed by computerised checklists.

Digital Taylorism makes jobs easier to export but, crucially, changes the nature of much professional work. Aspirant graduates face the prospect not only of lower wages, smaller pensions and less job security than their parents enjoyed but also of less satisfying careers. True, every profession and company will retain a cadre of thinkers and decision-makers at the top – perhaps 10% or 15% of the total – but the mass of employees, whether or not they hold high qualifications, will perform routine functions for modest wages. Only for those with elite qualifications from elite universities (not all in Europe or America) will education deliver the promised rewards.

The effects of the financial squeeze and deficit reduction programme will threaten much more than this government's survival. We shall see, in all probability, a permanent reduction in British living standards that can't be arrested by educational reform. Neoliberalism, already badly dented by the financial meltdown, will be almost entirely discredited. Governments will then need to rethink their attitudes to education, inequality and the state's economic role.

ILW

Why should we expect ever increasing living standards as a matter of right?

Generali

drc wrote: »

From The Guardian;

http://www.guardian.co.uk/commentisfree/2011/feb/28/education-jobs-middle-class-decline

It's a great piece right up to the last paragraph. Not a single word in the article supports the assertion at the end.

I have no doubt that people will be offered the chance to vote for protectionism of one sort or another, probably by Labour. That'd really screw the economy.

drc

If the East is ascending and the West declining and the peoples of the West have less money to spend, then surely that will cause problems for the East as there will be less demand for their products unless of course there is a rapid rise in income and demand in the East itself for its own products?

Batchy

Id agree with the article, however, the third world countries we are talking about like India, has a space program, yet still gets AID from the UK.

WHY?

China, its population is huge, there is huge growth potential in this country, and when they have growth in demand for living standard and construction, we will have a huge pull on resources, Mining will be where the money lies in the future, pulling resources out of the ground.

They will not be able to have houses built with materials that cost 60k, and pay them 500 quid a year... no one will be able to afford them.
Its only a matter of time before they have ridiculous inflation at more than double digit levels.

The service levels offered by indian call centres are fine, to a certain degree, but its only when the call gets transferred to a responsible british person, that you get any sense out of the situation.

the_flying_pig

Yeah, it’s a good enough piece in terms of the important facts & trends that it sets out, but some of the conclusions it draws are a bit strong and/or speculative in places.

What’s clear is that a very small cabal of rich countries can no longer maintain living standards that are way in excess of what the majority gets, it’s just not tenable any more… but exactly what this means for the absolute living standards in the West is fairly ambiguous really…

I probably expect somewhere between very modest increases and very modest declines in absolute western living standards over the next couple of decades, but this prediction could be way out of course.

Generali

drc wrote: »

If the East is ascending and the West declining and the peoples of the West have less money to spend, then surely that will cause problems for the East as there will be less demand for their products unless of course there is a rapid rise in income and demand in the East itself for its own products?

You answer your own question really. If this scenario plays out then demand from the East will replace that from the West.

Don't forget that the West retains many of the advantages that have served her well over the past couple of hundred years: stability, freedom (to some extent at least), comparatively small government, free markets, access to capital and rule of law.

Nikel

drc wrote: »

If the East is ascending and the West declining and the peoples of the West have less money to spend, then surely that will cause problems for the East as there will be less demand for their products unless of course there is a rapid rise in income and demand in the East itself for its own products?

Yes China in particular is trying to stimulate more spending by its people.

kabayiri

A teacher friend recently told me that they had been instructed to prepare students for jobs which don't exist yet; a futuristic view if you will.

You can respond to this in 2 ways :-

a) great, we have an equal opportunity to acquire these not-invented-yet jobs, or
b) what a load of codswallop, it's an easy soundbite answer given out to defer hard decisions until later.

If it is b) I do worry about what education will give us.

abaxas

Generali wrote: »

free markets

Some yes, others no.

Radiantsoul

the_flying_pig wrote: »

I probably expect somewhere between very modest increases and very modest declines in absolute western living standards over the next couple of decades, but this prediction could be way out of course.

If the BRIC Countries are really able to climb into higher value adding activities it must offer massive rewards for the world. For the last five centuries most intellectual development has been undertaken by the populations of the USA, Western Europe and the sparsely populated Oceania. Bringing more countries into knowledge production should lead to a vast increase in intellectual progress.