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Saturday, October 31, 2009

The New Untouchables

While I agree with Thomas L. Friedman that education must be the driver of our economic recovery, there is something missing in his analysis of the American decline (New York Times, October 21, 2009: A29).

He quotes approvingly Todd Martin's analysis of the loss of competitiveness. However, from 1980 to 2006, productivity rose at a rate of 2.2% per year. That is it was over 75% higher in 2006 than in 1980. On the other hand, real wages only increased 39% and from 1993 to 2006 only increased by 16%.

The fruits of increased productivity were not captured by employees but went to managers and shareholders. Clearly young people observing this stagnation in wage levels might well become unmotivated to take on the tough educational experiences that we all agree are necessary in our society today.

Sent to New York Times

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