Economic Growth as Spectator Sport

Secretary of Education Arne Duncan appeared at a forum on education at American University here in Washington last Friday, and, according to news reports, told the audience that, “[a]s a country we’re going to educate our way to a better economy or we’re going to struggle.” Sec. Duncan uses this line—or variation of it—a lot. (He used it during his appearance on The Daily Show a couple of weeks ago, for example.)

But if a “better” economy is one in which lower and middle class incomes are rising, then we may have additional work to do. From a post by Jared Bernstein on his blog today:

All of the factors driving up inequality remain in place, most notably, high unemployment, and we know from profits data (way up), corporate balance sheets (way flush), and real paychecks of middle-class workers (way flat), that what growth has occurred hasn’t reached much below the top end.

If this expansion is to be one where growth is more than a spectator sport for average folks, we’ve got some serious policy work to do.

In other words, if this is how our economic recovery is playing out, will improving education and increasing the skills of our workforce—while undeniably good policy goals—be enough to move low and middle class wages in the right direction?