by Special Correspondent T.S. DeHaviland
Alan Greenspan, speaking on NPR’s occasional segment “The Long View” late last year, again perpetuated the dangerous myth that the gap between the rich and poor in this country is due to a lack of highly educated and highly skilled workers. There is no doubt that we lack them, of course: shortages loom in nursing, engineering, and teaching, among other fields. But only one of those professions pays particularly well; that would be engineering wherein top candidates in hot fields such as chemical engineering can start at nearly six figures. But nurses and teachers generally make between $40k and $60k depending on the market. Head nurses or surgical nurses or other specialists might make closer to or even above $100,000 a year, but one does not get into those sorts of positions overnight: they go to the most experienced and most highly qualified. These are decent salaries, to be sure, but they have little to do with the income gap, with the top tier of the executive class bringing in tens of millions in compensation and bonuses every year,
not to mention the higher-ups in the investment class whose incomes reach into the hundreds of millions per annum.
Just having a degree won’t make you rich, but having an MBA probably will. With my MFA in Creative Writing, I am just as highly educated as an MBA–maybe more since the program I went through was designed to be terminal. But even though I possess an abundance of those written and oral communication skills ostensibly much sought-after by Big Business, that has somehow still failed to allow me to hob-nob at the Ferrari dealer with the truly well-to-do.
How far off the mark Greenspan is can be further illustrated when one considers what relatively unskilled but unionized workers once, and sometimes still do, actually make. An experienced, unionized manufacturing worker can make $60,000 or more a year, depending on overtime. So the BSN or a teacher with a master’s degree might actually be earning less than the guy with only a high-school diploma running rivets at the Boeing plant down the street.
Businesses may claim to want highly skilled workers, but they’re almost universally unwilling to pay for them, so people have little incentive to invest in their educations since the payoff, by and large, won’t be worth it, at least not in the 3 to 5 year time frame in which people can practically plan. Further complicating matters, even those highly skilled jobs Greenspan tries to champion are quickly being outsourced, just like manufacturing jobs have been for the past 30 years: insurance companies are sending patients to Thailand and Singapore as cheaper alternatives to expensive medical procedures; teachers are being imported from the Philippines on temporary visas in my home town; and more and more engineering work is being sent to China and India, where even the most highly educated will work for 30% of what an American expects. What would be the point of going $100,000 in hock when the great job you’re going into debt training for is just going overseas anyway?
The real reason for the gap between the rich and poor in this country comes down to good ol’ fashioned greed. The marginal top tax bracket of the 1950s and ‘60s that ran to almost 90% flew in the face of the idea the rich often have that they are not yet rich enough. And Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush, and Congresses both Democratic and Republican over the last quarter decade have all agreed by rewriting the tax code to favor the wealthy (if I made twice what I make, I’d pay the same percentage in taxes; this is true even if I made four times what I now make); eliminating taxes on capital gains; loosening regulations on businesses, banks, and investments; and busting labor unions whenever feasible. This has been tremendously good for the top 1% of income earners, who saw their incomes increase to almost 22% of all income earned in 2005, according to the New York Times, compared to roughly half that in 1980. To be in that top 1%, you’d have to be making about $350,000 a year, or three times what Greenspan’s theoretical highly skilled worker is likely to pull in. Over the same period, those on the bottom have actually seen their wages decline. It doesn’t take a Chairman of the Federal Reserve to figure out what’s going on here, and it’s pretty obvious that merely supplying
the economy with more nurses and teachers and engineers isn’t going to help. The problem is not that we’re not educated enough: roughly 20% of the workforce is college-educated. The problem is that we’re not being rewarded for what we do, but the people at the very top are being rewarded for what we do.