Notice Anything Missing in the President’s Speech Today?

Less than two months ago, the results of an international survey (PIAAC) revealed that American adult literacy and numeracy skills lag significantly behind those of adults in most other developed countries. Approximately 36 million U.S. adults were estimated to have low skills. These are adults who lack sufficient skills to succeed in higher education or training, and thus are often stuck in dead-end, low-paying jobs.

A report issued along with the initial results noted that “countries with lower skill levels risk losing in competitiveness as the world economy becomes more dependent on skills.” Less than a month ago, a followup report from the Organization for Economic Cooperation and Development (which administered the survey) called for “concerted action” by the U.S. to address this problem, warning that without such action “the skills of adults will fall further behind other countries.”

Today, the President gave a major address on the economy here in Washington. During the speech, he offered what he called “a road map that I believe should guide us in both our legislative agenda and our administrative efforts,” and listed policy areas “where you should expect my administration to focus all our efforts” over the rest of his term. One of those areas, not surprisingly, included education. In light of those very recent PIAAC findings, you might be curious about what the President had to say specifically about the nation’s 36 million low-skilled adults during this part of his speech:

Step two is making sure we empower more Americans with the skills and education they need to compete in a highly competitive global economy. We know that education is the most important predictor of income today, so we launched a Race to the Top in our schools, we’re supporting states that have raised standards in teaching and learning, we’re pushing for redesigned high schools that graduate more kids with the technical training and apprenticeships, the in-demand high-tech skills that can lead directly to a good job and a middle-class life.

We know it’s harder to find a job today without some higher education, so we’ve helped more students go to college with grants and loans that go farther than before, we’ve made it more practical to repay those loans and today, more students are graduating from college than ever before.

We’re also pursuing an aggressive strategy to promote innovation that reins in tuition costs.

We’ve got to lower costs so that young people are not burdened by enormous debt when they make the right decision to get higher education. And next week, Michelle and I will bring together college presidents and nonprofits to lead a campaign to help more low-income students attend and succeed in college.

But while — applause — while higher education may be the surest path to the middle class, it’s not the only one. We should offer our people the best technical education in the world. That’s why we’ve worked to connect local businesses with community colleges, so that workers, young and old, can earn the new skills that earn them more money.

And I’ve also embraced an idea that I know all of you at the Center for American Progress has championed, and by the way, Republican governors in a couple of states have championed, and that’s making high-quality pre-school available to every child in America. Cheers, applause.

We know that kids in these programs grow up are likelier to get more education, earn higher wages, form more stable families of their own. It starts a virtuous cycle, not a vicious one. And we should invest in that. We should give all of our children that chance.

In other words: nothing. No mention of those 36 million low-skilled adults at all, and nothing in the speech suggested that the President is planning to propose any major new initiatives to address the needs of those adults anytime soon, despite the dire warnings we heard just a few weeks ago about how the failure to act will have such a detrimental effect on our economy.

You can read the full transcript of President Obama’s remarks here.

Income Inequality and Adult Literacy

I wanted to share a really alarming chart from the OECD’s summary analysis of the initial PIAAC results. (PIAAC, for those jumping into this for the first time, is a new international survey of adult skills, released a few weeks ago.)

Source: Skilled for Life - Key findings from the survey of adult skills (OECD), 2013

Source: Skilled for Life – Key findings from the survey of adult skills (OECD), 2013

Look at where the U.S. is on this chart (bottom left): of the countries surveyed, we have the second highest income inequality, and the highest literacy skills inequality.

The bottom left corner is the absolute worst place to be, and that’s where we are.

But this chart also supports the notion that skills are not the only story when it comes to income inequality: Japan, which also has worse than average skills inequality, (though not as bad as the U.S.), manages to have the lowest income inequality of those countries surveyed. This suggests that other factors are at work in Japan that reduce income inequality. If skills were the only factor, you’d see the countries with the greatest skills inequality all clustered in the bottom left corner.

In addition, several countries, like Germany and Sweden, do a much better job at addressing the skills gap, but still have a higher-than-average income inequality.

The point is, while low skills may be an overall drag on economic growth, there appear to be other other things you can do to steer more income growth towards those at the bottom of the wage scale.

More Bad News for Young College Graduates

The bad news for recent college graduates keeps piling up:

Job prospects have deteriorated for recent college graduates. Besides facing high unemployment rates, young college graduates are now accepting more jobs that do not require college degrees. Not only do these stints of over-qualification affect the future earnings of these college graduates, they also make it more difficult for high school graduates to find employment as they face competition from higher-educated workers. Young workers certainly face an uphill battle as the economy continues to struggle. (my emphasis)

I assume that two-year degree holders and four-year college graduates from colleges and universities with lesser reputations are also finding increasing competition from recent college graduates from more prestigious schools, for the same reason, but I don’t know if that’s actually the case. A couple of possible mitigating factors: (1) many associate degree holders have obtained training and/or certification for specific mid-skill jobs that other college graduates may not be able to compete for, even if they wanted to; and (2) affluent graduates from elite schools are much less likely to be having trouble finding jobs.

Meanwhile, Brookings has published a report that examines the college return-on-investment issue, arguing that while on average, the benefits of a college degree outweigh the costs, the benefits may not outweigh the costs for everyone. I haven’t read the entire report, but I’ve never thought arguments based on the average ROI of a college investment made much sense. Also, if we’re going to look at the issue broadly, measuring the return in terms of raw wages is a less interesting to me than the extent to which postsecondary degrees are a significant factor in moving people at the lower end of the economic ladder up to higher rungs, and whether people tend to stay at those higher rungs over time—and, most importantly—whether the positive effects have been trending up or down.

David Atkins thinks that the whole college push is basically a diversion from dealing with what he believes is a “broken economic system that does not serve the public interest.”

It Doesn’t Matter What the Huffington Post Thinks

That’s the first thing I thought when I read this long list of sequestration effects. Yes, they’re terrible, and most are just really nonsensical from a public policy point of view. (And if you don’t have time for the whole list, just read this one.)

But what’s more significant, I think, is this: Congress has been on a two-week recess. Have they heard about any of these effects when they were back home? It’s oversimplifying to suggest that that an outcry back home would have been enough to pressure Congress into immediately doing something about this upon their return—but if they’re not hearing about the negative effects from constituents back home, that would seem to significantly diminish any chance that it will be repealed or replaced anytime soon.