I have run across a lot of stories on education reform lately, something not unexpected during a stagnant economic recovery. People are looking for anything to get ahead in these tough times, and education is seen as one of the few accessible methods for improving one’s individual economic prospects. The two most recent articles I’ve read on the subject, a TIME magazine article on Silicon Valley tycoons involved in education reform and FAIR.org’s criticism of the TIME article, got me thinking about an aspect of this issue that never really gets brought up: whether a better education leads to a bigger paycheck.
The TIME article explicitly references a Harvard study that implied a significant increase in income for a child who has a good teacher versus one with a bad teacher. I’ve also seen television ads (PSAs) claiming that high school drop-outs who get a GED increase their potential income significantly as well. These assertions are both true undoubtedly, though the FAIR article emphasizes the controversy surrounding the methodology of the Harvard study. And that is where the truth can be very misleading. Improving one’s level of education probably does not improve one’s ability to obtain a higher wage in an absolute sense, but does give one an advantage over others who do not improve their education level. There is a competitive advantage in education. However, if everyone improved their level of education the same amount, would anyone’s wages rise?
There is a tendency for people to talk about education as a kind of value generator. This is also true but misleading. A more educated populace means more new ideas which leads to advances in technology and potential innovations elsewhere within the economy. This certainly adds value and likely wealth to the overall economy. However, it does not translate automatically into wages. We mustn’t forget that. Employers don’t pay higher wages just because their labor costs are lower and their employees are smarter and/or more talented. Their must be other inducements as well.
Every person deserves an opportunity to access a high quality education, not just for economic reasons but for a variety of quality-of-life reasons. A better future awaits a smarter man or woman, but that’s not enough by itself to recoup the high level of economic mobility we all wish would return.