Working Class Dogged

Robert Reich says education, not globalization, will benefit blue-collar Americans

I wish I could be as optimistic as Walter Russell Mead about the future of today's nonsupervisory workers, but I can't. He argues that because women will no longer be streaming into the workforce as they did beginning in the 1970s, the demand for blue-collar workers will increase. I think his cause-and-effect is a bit backwards. The reason women streamed into the workforce starting in the 1970s was because wages had begun to drop. Women had to come into the workforce in order to maintain family incomes. Women will soon be approaching the maximum number of hours they can possibly work. Rather than a boon to blue-collar workers, this could be a real problem for blue-collar families.

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Mead also suggests that nontraded services will be protected from the global economy. But technology isn't standing still. I bought a movie ticket yesterday over the telephone and then got the ticket out of a little machine at the theater. I never dealt with a ticket seller. Bank tellers have almost disappeared, as have telephone operators and gas station attendants. Technology is relentless with regard to many of these jobs.

And the middle class continues to shrink. The old middle was composed of factory jobs. Those are vanishing at a rapid clip. The new middle, to the extent that there is one, will be composed of technical service and support jobs. For the future, I see, sadly, increasing inequality across the economy. Education will be the fault line dividing the losers from those who may not be big winners, but at least will be able to survive.

Undoubtedly, well-educated knowledge workers are under the gun as well. The supply of knowledge workers is increasing globally. Sophisticated computer programmers, for example, can be found in India, Russia, Latin America, and all over Europe. Domestically, meanwhile, an ever larger cohort of people is seeking higher education to get the best jobs. This increasing global supply will put a damper on the wage gains of white-collar workers. Even now, in the tightest labor market in almost a quarter of a century, it's striking how little wage growth we have. The median wage is still below where it was in 1989 before the last recession, if one adjusts for inflation. With that said, there will continue to be a return—a good return—on investments in education and training, because technology continues to generate such an extraordinary range of goods and services. Many of the jobs that fill newspaper and Internet want ads today were unheard of 10 years ago.

Not everyone has to go to a four-year liberal arts university, but you need the tools. In order to do the new middle-class job, you need to know the rudiments, and that may entail something beyond high school. The caregiving occupations and professions require special training. We can debate how much, but the rich will have platoons of physical therapists, psychological therapists, personal trainers, marriage counselors, career counselors, child counselors, dog trainers, and so forth. I don't mean to sound flip. It will be very important for home health care personnel to have adequate training.

Besides training and education, there are several things we can do to stem inequality in the economy. There is widespread public support for greater expenditure on education. The minimum wage increase consistently garners close to 80 percent support. Most people pay more in Social Security payroll taxes than they do in income tax, so a more progressive payroll tax would be very popular. Childcare is an extremely important issue to working people, and the public would be very receptive to a bold approach there as well.

I expect that President Clinton will take small steps in these directions. I doubt very much whether we'll see him propose large-scale efforts. First, there's no money for such initiatives—the president has shackled himself to a balanced budget agreement and is unlikely to want to spend money he doesn't have. Second, no bold initiative in any of these directions can make it through a Republican-controlled Congress.

Smart politics, however, might dictate boldness on the part of Democrats. How delightful to hear Sen. Phil Gramm complaining that even a modest extension of Medicare is too much. If Republicans were to add to that by sharply opposing another increase in the minimum wage, Democrats would gain additional House seats in 1998.

Right now there is widespread resignation to the status quo. People are cynical. They believe, with certain justification, that the government is in the hands of the special interests and the wealthy. But I believe we will experience a progressive revival in the next few years. As the economy slows, it will be like the tide ebbing. We'll be able to see the hardships rising on the mudflats, the hardships in terms of so many people being left behind.

Robert Reich, secretary of labor from 1993 to 1997, is professor of social and economic policy at Brandeis University. His comments were given during an interview with Josh Clark, a freelance writer based in New York City.

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