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Collision Course: Why the Fight for Fiscal Sustainability Must Continue

“Every dollar we spend on interest is a dollar we can’t spend on Head Start, nutrition assistance, job training, infrastructure, innovation, support for public schools and early education, and other investments that help more of our people make it in America. 

When it comes to U.S. budget priorities, critical public investments are on a collision course with interest payments on our debt and other mandatory spending, including Social Security, Medicare, and Medicaid.

On Monday, March 24th, 2014, Third Way hosted a panel on how Congress can make progress this year to improve our nation’s fiscal outlook. The event featured opening remarks by House Democratic Whip Steny H. Hoyer, and was followed by a discussion with Carmel Martin, Executive Vice President for Policy at the Center for American Progress, and Third Way’s Senior Vice President for Policy Jim Kessler, moderated by veteran journalist Jill Lawrence.

Watch Congressman Hoyer’s remarks above or click here to learn more

Faced with unemployment and dim job prospects during the recession, Americans made one significant change: they went back to school. But is college still worth it today? In their op-ed for The New York TimesThird Way founders Jon Cowan & Jim Kessler write about why a college education does indeed make a difference, and lay out a few steps we can take to turn this recession-led college resurgence into one of the dominant economic trends of the 21st century.

And for more ideas on how to make college more affordable, check out our recent report: $1 Trillion and Rising: A Plan for a $10K Degree 

A bachelor’s degree could cost $10,000 - total. Here’s how.

By Dylan Matthews

(Dennis R.J. Geppert/AP)

A couple years ago, Rutgers historian David Greenberg noticed a defect endemic to books about social, political and economic problems: The last chapter always sucks. “Practically every example of that genre, no matter how shrewd or rich its survey of the question at hand, finishes with an obligatory prescription that is utopian, banal, unhelpful or out of tune with the rest of the book,” Greenberg noted.

And it’s not just books. I’ll be the first to admit that the possible fixes with which I finished off my series on the alarming rise in college tuition were pretty vague and utopian. But helpfully, the good folks at Third Way have noticed that the conversation about how to reign in tuition has gotten a little too small-minded. “For both parties, in particular Democrats, our solution to the problem of rising cost of college has been to subsidize the rising cost,”  the think tank’s president, Jonathan Cowan, says. “That’s been our official policy, to subsidize the rising cost, and that has to be seen as a fairly intellectually bankrupt approach. We need a dramatically different approach that is about driving down the rising price.”

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The more education you have, the more you earn. In 2012, two-year-degree holders earned close to $7,000 more per year than their high-school-diploma-only counterparts. Someone with a four-year degree earned roughly $15,000 more than someone with an associate degree. And a professional degree reaped nearly $35,000 more than a four-year college degree.

Faced with unemployment and dim job prospects during the recession, Americans made one significant change: they went back to school. But is college still worth it today? This weekend in The New York TimesThird Way co-founders Jon Cowan & Jim Kessler made the case for why a college education is still “worth it.”

For ideas on how to make college more affordable, check out our recent report: $1 Trillion and Rising: A Plan for a $10K Degree

For the foreseeable future, the challenge of ‘cybernation’ is not mass unemployment but the need to educate many more young people for the jobs computers cannot do.

Economists Frank Levy of MIT and Richard J. Murnane of Harvard in Third Way’s latest NEXT paper: Dancing with Robots: Human Skills for Computerized Work.

Read “Dancing with Robots” here, and be sure to keep up with the latest from Third Way’s Economic team: @ThirdWayEcon.

Have the robots come for the middle class?

By Jim Tankersley

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Computers and cyborgs aren’t about to render the American worker obsolete. But they’re tilting the nation’s economy more and more in favor of the rich and away from the poor and the middle class, new economic research contends.

Despite rising fears of technology displacing huge swaths of the workforce, there remain huge classes of jobs that robots (and low-wage foreign workers) still can’t replace in the United States, and won’t replace any time soon. To land the best of those jobs, workers need sophisticated vocabularies, advanced problem-solving abilities and other high-value skills that the U.S. economy does a good job of bestowing on young people from wealthy families — but can’t seem to deliver to poor and middle-class kids.

That is the alternatively optimistic and bleak picture of the domestic labor market sketched by economists Frank Levy of MIT and Richard J. Murnane of Harvard, who conducted a detailed study of what jobs have been lost to automation in recent years and which jobs are likely to be lost as technology keeps advancing. They wrapped their findings into a new paper for the centrist Democratic think tank Third Way, in which they argue, “For the foreseeable future, the challenge of ‘cybernation’ is not mass unemployment but the need to educate many more young people for the jobs computers cannot do.”

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Men Falling Behind

By Timothy Taylor, The Conversable Economist

When any large group of Americans seems to be moving backward over a sustained period of time, it’s cause for concern. In Wayward Sons: The Emerging Gender Gap in Labor Markets and Education, a report written for Third Way, David Autor and Melanie Wasserman point out: “Over the last three decades, the labor market trajectory of males in the U.S. has turned downward along four dimensions: skills acquisition; employment rates; occupational stature; and real wage levels.” Moreover, Autor and Wasserman argue that these patterns are intertwined through mechanisms that involve marriage decisions and family structure.* 

Educational achievement for men went backward for a time, and has only recently been recovering back toward the levels of the 1960s. Here’s a figure showing the pattern for the share of 35 year-olds who have completed a four-year college degree, but similar patterns arise if one looks at completing high school, or completing some college, or other measures of education.

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Employment rates for both white men and black men have been sagging since the 1970s, although they took an additional drop during the Great Recession.
 
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America’s families and workforce have a guy problem

By the Editorial Board of The St. Louis Post-Dispatch

The Cleaver Family of Mayfield. Missing and presumed lost.

There are so many unsettling ideas in David Autor and Melanie Wasserman’s “Wayward Sons” that it is difficult to know where to start. But let’s try this:

“[G]rowing up in a single-parent home appears to significantly decrease the probability of college attendance for boys, yet has no similar effect for girls. Putting these pieces together, we tentatively conclude that boys perform less well academically than girls when fathers are not present in the home and, additionally, benefit less from high levels of maternal education when either the father is absent or is not highly educated.”

Thus, in a nation where one in every three children is being raised by a single parent — four out of five of them single mothers — boys quickly get behind the educational curve. One possible factor, say Mr. Autor and Ms. Wasserman, is that single mothers tend to interact with their sons an hour a day less each week than they do with daughters. This is not always the moms’ fault.

Problems quickly snowball. These boys are more likely than girls raised in similar circumstances to do poorly in school and get in trouble in high school. They for sure don’t want to “talk about it.” They are less likely to attend college or graduate if they happen to get there. Increasingly they can’t find decent jobs without a college education, which makes them less desirable mates for better educated, more ambitious women.

These women may choose to raise children on their own, risking putting more boys behind the curve. Or men drift in and out of short-term relationships with less discriminating women, fathering more children whom they are not likely to stay around to raise. And the cycle gets more vicious.

Studies showed this cycle began shortly after World War II. Over the past 20 years, it has begun to reach crisis proportions, and not just among male children in low-income families. Males from affluent families and good schools tend to do well. Those from less fortunate backgrounds tend not to. The income gap widens.

(Read more after the jump)

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The Miserable Odds of a Poor Student Graduating From College (in 2 Graphs)

By Jordan Weissmann, The Atlantic

As we frequently like to point out here at The Atlantic, going to college is perhaps the single best financial decision a young adult can make. But there’s a catch: you have to graduate. If not, the costs can easily swamp the benefits. 

And that is one of the most important reasons why, in many ways, America’s higher education system does more to deepen class divisions than it does to bridge them. Because the truth is that compared to their richer classmates, low-income students have only a faint hope of ever graduating from college if they even get there.  

The two graphs below, from a recent report by Third Way, and based on major longitudinal studies of American youth, show how wide that gulf is. The blue dotted line tracks the youngest Baby Boomers, while the red line looks at the oldest Millennials. First, note that between the generations, the rich-poor attendance gap grew from 39 percentage points to 51 percentage points. 

Fraction_of_Students_Entering_College_Third_Way.JPG

But graduation rates are perhaps even more appalling. Just 9 percent of students from the poorest families complete a degree — meaning less than a third who ever enroll make it to commencement. By comparison, 54 percent of the most wealthy students earn a diploma, meaning they have about a two-thirds success rate. 

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Poor preparation may play a role here, but so do finances. Many low income students attempt to work their way through school without debt, which puts them at a greater risk of dropping out. Others find themselves financially overwhelmed even with the help of loans.

Bottom line: For Americans of a certain class, college is a basic rite of passage. For many more, it’s a roll of the dice. 

NYT: As Men Lose Economic Ground, Clues in the Family

By Binyamin Appelbaum, The New York Times

The decline of two-parent households may be a significant reason for the divergent fortunes of male workers, whose earnings generally declined in recent decades, and female workers, whose earnings generally increased, a prominent labor economist argues in a new survey of existing research.

David H. Autor, a professor at the Massachusetts Institute of Technology, says that the difference between men and women, at least in part, may have roots in childhood. Only 63 percent of children lived in a household with two parents in 2010, down from 82 percent in 1970. The single parents raising the rest of those children are predominantly female. And there is growing evidence that sons raised by single mothers “appear to fare particularly poorly,” Professor Autor wrote in an analysis for Third Way, a center-left policy research organization.

In this telling, the economic struggles of male workers are both a cause and an effect of the breakdown of traditional households. Men who are less successful are less attractive as partners, so women are choosing to raise children by themselves, producing sons who are less successful and attractive as partners.

“A vicious cycle may ensue,” wrote Professor Autor and his co-author, Melanie Wasserman, a graduate student, “with the poor economic prospects of less educated males creating differentially large disadvantages for their sons, thus potentially reinforcing the development of the gender gap in the next generation.”

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Congress must help more foreign-born STEM graduates stay in US

By Lanae Erickson Hatalsky and Sarah Trumble

No one says that the U.S. doesn’t produce enough lawyers. Today, almost 150,000 students are attending U.S. law schools. Almost all of them are Americans, and barely more than half will find jobs in their field here. Their supply exceeds our economy’s current demand. But the exact opposite is true for students of science, math, engineering, and technology (STEM).

This year, 40,000 computer science graduates will find 120,000 new and unfilled jobs waiting for them. Worse, many of those students are foreign born and barred by our current immigration policy from using their talents to meet this demand to help grow the U.S. economy. Consider that by 2009, according to the National Science Foundation, a full half of those graduating with a doctorate in computer science were foreign-born students here on a temporary visa. Although we clearly have an economic need for these graduates, and they’ve been educated here in the United States, we are currently sending these inventors and job creators home to compete with us in the global marketplace.

If companies can’t find qualified candidates to fill their jobs, they may be forced to move positions overseas. Luckily, there is an easy solution to this problem: Congress should pass a bill to allow highly-skilled immigrants studying science, technology, engineering, or math at an American university to stay here and earn green cards after graduation.

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