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Education and the Economy

Corporate America complains that it is forced to look overseas for workers because public schools in this country are not producing enough qualified employees. According to a new report from the U.S. Commerce Department, companies decreased their work forces domestically by 2.9 million during the 2000s, while increasing employment abroad by 2.4 million.

I don't believe the explanation. Multinational corporations are hiring more workers overseas than they are at home because the cost of labor abroad is lower than it is here. They are also doing so because they are allowed to deduct the expense of moving operations abroad. The Joint Committee on Taxation estimated that ending the deduction would raise $168 million over the next decade ("Senate to Consider Tax Credit for Bringing Jobs to U.S." Bloomberg News, Jul. 18). The cost of the tax credit during the same period would be $255 million, resulting in a net cost of $87 million.

The point is that education has little to do with the decision. It is not because schools are failing to turn out adequately educated workers. As Richard Rothstein wrote: "Education is complex, and the relationship between education and the economy even more so. Our ability to grapple with the challenges these present is not enhanced by factually inaccurate and hyperventilated appeals from those who should know better" ("Fact-Challenged Policy," Economic Policy Institute, Mar. 8, 2011).

I also don't buy the claim that failing public schools are undermining the ability of companies to compete in the global economy. It's a red herring. I say that because the productivity of factories in the U.S. is certainly not in dispute. America's manufacturing output in 2009 was $2.15 trillion. (This exceeded China's output of $1.48 trillion by almost 46 percent.) In fact, our manufacturing output hits a new high almost every year. Moreover, the quality of production is also dramatically improving. Ford Motor Co., for example, rates ahead of many foreign automakers in this category. Factories on these shores now possess advanced and sophisticated capabilities every bit as good as, if not better than, factories in other countries. This bodes well for the future.

Yet no matter how much evidence is amassed showing that schools are turning out an adequate number of qualified workers, reformers persist in trying to convince taxpayers otherwise. I'll say it again: By undermining confidence in public education, they hope to set the stage for privatizing all schools. There's simply too much money to be made.

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