RealClearPolicy Articles

Harvard’s David Deming and Kadeem Noray have updated their work on the economic returns to education in science, technology, engineering and math with a new study, STEM Careers and the Changing Skill Requirements of Work. The new study confirms some of their previous findings showing that early earnings premiums for STEM graduates tend to fade over time and converge toward non-STEM graduate earnings at mid-career. It also provides additional evidence that STEM occupations are experiencing rapid rates of skills obsolescence as a result of technological change.

As noted in their earlier work, Deming/Noray find that STEM degrees in applied fields like computer science and engineering provide much higher entry-level wages than non-STEM degrees. On average, an applied STEM graduate will earn 44 percent more than a non-STEM grad at age 24. However, by 35, the premium for an applied STEM credential drops to 14 percent. For pure STEM degrees, the picture is much different: in fields like mathematics, physics, and biology, STEM degree holders have only a narrow income advantage over non-STEM counterparts at the outset of their careers.

Naturally, these earnings patterns have an effect on career longevity. The study found that at ages 23-24, 62.5 percent of applied STEM degree holders are working in STEM occupations. By age 50, this declines to about 41 percent with half of the decline coming before individuals reach their mid-30s. Many of these STEM exits are individuals moving from frontline STEM occupations into management positions either in STEM-related industries or elsewhere in the economy. (Deming and Noray argue that STEM workers tend to have higher levels of general ability that ease transition to management tasks or other fields.) Conversely, in pure STEM, there are relatively fewer exits from the STEM field with the number of degree holders in the field declining from 29 percent of graduates at age 24 to 21 percent at age 35 and remaining flat thereafter.

So, what accounts for the declining wage premiums and occupational exits among applied STEM graduates? Deming and Noray point to the nature of the STEM field itself, suggesting that much of what we characterize as a “skills gap” in the STEM workforce is a shortage of actual STEM skills rather than STEM workers. By this they mean that those working on the frontiers of technology (e.g., in a STEM occupation) are at the greatest risk of skills obsolescence, and under the greatest pressure to acquire new skills, as the value and relevance of the knowledge and training they received in college decays relatively quickly. Hence, employers in STEM use the wage premium to draw in the best and brightest from each fresh graduating class but are unable or unwilling to help incumbent workers “upskill” to remain relevant to the evolving technological environment.

WASHINGTON, DC – Classes open today at the Steve and Amy Van Andel School of Government, a new graduate school of Hillsdale College. Based out of Hillsdale’s Washington, D.C. campus on Capitol Hill, the Kirby Center for Constitutional Studies and Citizenship, the school is aimed at working professionals in government, law, think tanks, media, and non-profits. It will confer a Master of Arts in Government.

Hillsdale College

Hillsdale College is notable among institutions of higher education for its emphasis on the American Founding and political philosophy. This approach of bringing historical wisdom and principles to contemporary life will carry over to the new graduate school. Matthew Spalding, dean of the Van Andel School of Government, feels that bringing Hillsdale’s special focus on the American political tradition to the DC professional class has the potential to improve the quality of American governance. “The political world of today is dominated by ideologues, bureaucrats, and unprincipled politicians,” said Spalding. “What we need are more statesmen, so we will teach future leaders about politics and statecraft guided by principles and prudence.”

The inaugural class is made up of fifteen students drawn from congressional staff, federal agencies, media, and the legal profession. This semester, they will take The Art of Governing, the cornerstone course for the program, which will be taught by Hillsdale’s president, Larry P. Arnn. Typical of Hillsdale’s approach, the readings will range from Aristotle to Abraham Lincoln.

Arnn drew a direct connection between the school and the mission of the Founding Fathers who will be studied there. "The purpose of our School of Government is taken from the example of the founders of our nation,” said Arnn. “George Washington led several of them in an unsuccessful effort to build a school of statesmanship. It would teach the principles of the nation and what Jefferson called in another context ‘the elemental books of public right’ in which those principles are best explained. Beginning with the classics, our school of government will pursue that same task."

Recently, the Washington Post again highlighted a widely-referenced study that seemingly documents severe adverse consequences to poorer residents of gentrified neighborhoods. Earlier last year, the Post first reported on the National Community Reinvestment Coalition (NCRC) study that claimed that between 2000 and 2013, gentrification caused a substantial reduction of black residents “often accompanied by extreme and unnecessary culture displacement.” That study understates gentrification’s potential benefits and greatly overstates its potential costs.

According to the study, cultural displacement “occurs when minority areas see a rapid decline in their numbers as affluent, white gentrifiers replace the incumbent residents.” Operationally, however, the study designated cultural displacement whenever gentrified neighborhoods had as little as a 5 percent decline in its minority population. Even with this low bar, it found that only 22 percent of gentrified census tracts nationally met this level. As a result, it noted that “displacement of long-time residents was most intense in the nation’s biggest cities, and rare in most other places.” 

The report quickly moved past these general national effects, focusing solely on those census tracts which, according to their definition, experienced cultural displacement. It highlighted Washington DC, where 40 percent of the eligible census tracts experienced gentrification and just over half (33 out of 62) experienced cultural displacement. The examples of cultural displacement given included the closing of a long-time restaurant and the ending of an annual musical event. Among these 33 census tracts, the average black population decline was just over 600.  

If these census tracts contained the typical 4,000 residents, the black share would have decreased by 15 percent; if 3,000 residents, the drop would have been 20 percent. Five of the eight city wards were majority black in 2000. Four had limited black share declines and remained majority black in 2010 while the fifth shifted from 62.8 percent to 41.6 percent black. These modest black share declines suggest that even among the Washington gentrifying neighborhoods that had experienced significant black population declines, the vast majority remained majority black.

Economic mobility is little more than a myth for most people who grow up in families with low incomes. A child born in poverty in the early 1980s had single-digit chances of having a high income as an adult. If we want to simply raise incomes from one generation to the next, we’re failing. Nearly all Americans born in 1940 had incomes higher than their parents’ by the time they reached the same age, but today, only half of adults born in 1980 make more than their parents did.

Racial inequality exacerbates that overall decline in mobility. More than half of Black children born in the bottom income quintile stay there as adults, compared to about a third of white children. Perhaps more surprisingly, Black middle-class boys are twice as likely as white middle-class boys to move down the income distribution by the time they’re adults. This reality isn’t the American Dream.

Many policymakers answer this challenge with proposals to expand access to higher education for students from families with low incomes. With all its limitations, higher education remains one of the few levers of mobility, including for students of color. But its impact varies depending on the type of institution, the quality of professional network and degree a student accesses, and the student’s likelihood of completing a degree. Unfortunately, a bipartisan higher education proposal in Congress may be more likely to trap than empower these students.

For nearly 50 years, Pell Grants have helped low-income students access college and stand a chance at climbing the economic ladder. Pell’s role in giving students a shot at upward mobility can be improved substantially. However, a current proposal — with inadequate safeguards —would expand Pell to cover training programs that can take as little as eight weeks. This “short-term Pell” proposal may seem attractive insofar as it can encourage more postsecondary attainment, but the lack of both safeguards for students and accountability for institutions has raised serious concerns from higher education and civil rights experts. It might waste Pell dollars — and, far worse, waste time and resources from hardworking students with very low incomes, including a disproportionate number of black and brown students.

Steven Wilson would seem to be the very model of a thoughtful, progressive 21^st century education reformer. He’s also a cautionary tale. In 2007, after more than a decade working in charter schools, writing about them, and teaching about them at Harvard, he opened the first Ascend charter school in Brooklyn. Today, the Ascend network consists of 15 schools, serving 5,000 predominantly low-income and minority children in New York City. Ascend’s record is stellar, with achievement gaps closing and proficiency standards met, and this pedagogic magic is worked in exceptionally nice facilities, not the shared buildings used by so many Gotham charters. Wilson and company have done all this without big philanthropy, without profiteering, and without scandal.

A hard-driving executive who built a strong team, Wilson’s annual performance reviews yielded kudos year after year. Driven by high standards for staff and students alike, it must be said that he paid more attention to educating kids than to contemporary notions of diversity, inclusion and sensitivity. He has no appetite for pandering but is politically and socially very liberal. He was, for instance, an early adopter of “restorative justice,” a progressive approach to school discipline intended to be less punitive while addressing concerns about racial bias (but which has raised some concerns about the consequences for school orderliness and safety).

Wilson is also a serious education thinker who sees much today that doesn’t meet his standards. That’s what got him in trouble. Last June, he posted an extensive, historically-themed essay on the Ascend website titled “The Promise of Intellectual Joy.” Its central point was that “democratic” education must strive to “grant all students the knowledge and faculties of mind that had once only been afforded the elite.”

Wilson lamented the “growing risk” that efforts to make schools more “diverse, equitable, and inclusive” could “be shamefully exploited to justify reduced intellectual expectations.” He declared that schools must make clear that “intellectual pursuit” and “intellectual joy” are good for students of every race and background, or else, “The distinctly American project of equal opportunity will continue to be thwarted.”

Climate change is making global headlines following the collapse of global climate talks in Madrid. At the top of the United Nation’s agenda was voluntary international cooperation — because sometimes it is more cost effective to pay for reduced emissions elsewhere rather than cut emissions on your own.

Both here in the U.S. and abroad, policymakers must ignore the distractions and finger-pointing and focus on two things: embracing all possible technologies to avoid, reduce, capture and sequester greenhouse gases; and using market-based approaches to get the job done fast.

Taking options off the table makes solving climate change harder. Unfortunately, that’s just what some proposals do. Senator Bernie Sanders’ version of the Green New Deal calls carbon capture and sequestration a “false solution” and Michael Bloomberg’s campaign to move “beyond coal” ignores how U.S. technologies could stave off the worst effects of climate change if they’re deployed around the world.

In just the past 18 months, the world’s biggest greenhouse gas emitter, China, saw coal-fired capacity grow by almost 5 percent. And coal-fired plants are also being built in Africa and other parts of Asia. These proposals miss the mark and risk repeating the mistake of vilifying coal — a mistake Hillary Clinton made in her 2016 campaign.

Health care, particularly the question of how to provide universal access for all Americans, has been front and center in the Democratic debates. I believe in universal access too, but the only sustainable way to achieve it is to deal directly with the institutional bloat and other inefficiencies that have crept into our health care non-system over many decades, resulting in enormous complexity and unproductive costs. Suppose instead of socializing health care or tinkering with Obamacare, we tackle the root causes driving these unproductive costs.

Estimates vary somewhat, but unproductive costs include:

• Administrative expense created by the unnecessary complexity of a non-system that evolved in a piecemeal manner - $500 billion
• Overutilization and fraud - $600 billion
• Lost revenue from regressive tax preference for Employer Sponsored Insurance (ESI) - $280 billion
• Pharmacy Benefit Manager middlemen - $150 Billion

That adds up to $1.53 trillion, well over one-third of our total $3.5 trillion annual spending on health care with no reduction in care delivered. Complexity in the choice of insurance coverage, unnecessary subsidies for ESI, middlemen in the pharmacy supply chain, and the unproductive duplication of public health care agencies are the root causes of these costs.

Although picking this low-hanging fruit wouldn’t be a quick fix, it could be accomplished over a few years with manageable disruption. The savings would be enough to finance universal care while reducing total national spending on health care.

As someone whose career was largely spent in promoting and defending freedom of speech and of the press, the damage done in the Trump era by so much of the mainstream media seems almost surreal to me. By their journalistic conduct they have opened the eyes of vast numbers of people to their leftward political and cultural mindset; they have accelerated the collapse of their own credibility; and worst of all, they have demolished both the practice and the ideal of objective journalism, the only kind that’s truly needed in a democracy.

Smaller groups of people, most notably conservatives and libertarians, have known for many years about the ideological and cultural views of broadcasters and major newspapers, as well as the recording industry and Hollywood. But until the election of Donald Trump most such practiced their craft in ways and language that passed for most people as the product of honest labor.

Not so now. From the pages of the New York Times and the Washington Post, to the on-air performances at MSNBC and CNN, and from Hollywood actors to recording artists, large numbers of the mainstream media and entertainers seem more like crass propagandists, determined to trash anything and everything Trumpian, without regard to truthfulness or fairness.

Ironies abound in this, but the biggest one is the seeming indifference of all such to the damage they’ve done to themselves. Despite having thrown everything but the kitchen sink at Trump and his supporters, the president has survived and even prospered in consequence.

“[T]he term ‘voucher’ has become a dirty word in many educational circles.... The fear is that partial-subsidy vouchers provide a boost so that better-off parents can opt out of a failing public school system, while the other children are left behind… [But] a taxpayer-funded voucher that paid the entire cost of educating a child (not just a partial subsidy) would open a range of opportunities to all children.”

This bold call for transformational education reform came not from some secret cabal of school choice groups, but from the recently unearthed 2004 policy prescriptions of now-Senator Elizabeth Warren. Fifteen years later, this vision is now becoming a reality for families throughout the nation. But educational freedom remains anathema to those who ignore the facts and instead embrace the false conventional “wisdom” that school choice benefits the wealthy at the expense of the poor.

While many states have enacted traditional private school voucher programs over the past several decades, a new, broader form of educational opportunity has burst onto the stage — one that helps fulfill Sen. Warren’s 2004 vision of a system in which “parents would take control over schools’ tax dollars.” This innovation, known as an education savings account (ESA), takes part of what a state would have spent covering the cost of a student’s education in a K-12 public school and instead deposits that money into a personalized account that allows the child’s family to use the funds for tutoring, educational therapies, private school tuition, curriculum materials, and other teaching tools. In Arizona, where the nation’s first ESA program began in 2012, enrollment has surged from fewer than 150 kids to more than 6,500, serving students with special needs as well as those from military families, the foster care system, failing public schools, and Native American reservations.

And despite the claims of opponents, this program is far more than a partial coupon to expensive private schools affordable only for the wealthy. In fact, new research finds that the typical ESA award amount for non-special needs students (approximately $6,100) is greater than the median private elementary school tuition and fee cost in the state. In other words, for even the most disadvantaged families, their ESA can cover 100% of the cost of tuition at most private elementary schools.

Mitch McConnell is one of the wiliest tacticians in Washington. But he's making a rare mistake — one that could imperil his Senate majority.

The Majority Leader is largely ignoring immigration, even though voters named it the "most important problem" facing the country in a July Gallup poll. Aside from passing a $4.6 billion bill in June that provided humanitarian aid to illegal aliens trying to enter the United States across the southern border, McConnell's Senate hasn't touched the issue in months.  

Voters overwhelmingly want Washington to reduce both illegal and legal immigration. That's especially true in the swing states that will make or break the GOP's hold on the Senate in 2020.  

Senator McConnell could give these folks a reason to vote Republican next year by bringing bills on E-Verify, asylum reform, and chain migration to the floor.

Last month, Chicago Public Schools (CPS) teachers returned to work after a two week strike. The deal that ended the strike entailed the city acquiescing to virtually every union demand — from higher teacher pay to smaller class sizes to hundreds of new nurses, social workers, and librarians. This was also a deal that took CPS’s grim fiscal situation and made it worse.

For teachers, the deal is remarkable. It will boost Chicago teacher compensation — already among the highest in the nation — 16 percent higher over five years, raising average teacher salaries to nearly $100,000. (By contrast, the median Chicago household earns $52,000.) Teachers will now be permitted to bank an incredible 244 sick days (up from 40) and claim full pension credit for those days upon retirement, creating new demands on a teetering pension system. And the deal keeps teachers’ retirement contribution at just two percent of annual salary while slashing health care copays.

The contract will cost up to $1.5 billion over the next five years, in a city whose debt burden is already a staggering $119,110 per capita. The pay increases and pension commitments mean the costs will ripple out for decades to come, and even before the deal, the teacher pension fund faced an astounding $11 billion shortfall (CPS’s annual budget is $6 billion). In all, the deal looks less like a tough-minded settlement and more like a legally sanctioned heist.

This is all disheartening but hardly surprising. After all, the last time Chicago teachers struck, then-mayor Rahm Emanuel traded a 17 percent pay raise for the concession that student test scores could be used in teacher evaluations — a practice that was already mandated by state law. We’re not kidding. That was all the reputedly tough-as-nails Emanuel was able to get: permission to do something the state had already directed him to do.