INEFFICIENCY BEGETS PROSPERITY? An American Prospect article by Lawrence Mishel and Richard Rothstein notes that access to education, while useful for broadly shared prosperity, is not the sole policy instrument.

Of course we should work to improve schools for the middle class. And we have an urgent need to help more students from disadvantaged families graduate from good high schools. If those students do so, our society can become more meritocratic, with children from low-income and minority families better able to compete for good jobs with children from more privileged homes. But the biggest threats to the next generation's success come from social and economic policy failures, not schools. And enhancing opportunity requires much more than school improvement.

They observe,

Rising workforce skills can indeed make American firms more competitive. But better skills, while essential, are not the only source of productivity growth. The honesty of our capital markets, the accountability of our corporations, our fiscal-policy and currency management, our national investment in R&D and infrastructure, and the fair-play of the trading system (or its absence), also influence whether the U.S. economy reaps the gains of Americans' diligence and ingenuity. The singular obsession with schools deflects political attention from policy failures in those other realms.

But while adequate skills are an essential component of productivity growth, workforce skills cannot determine how the wealth created by national productivity is distributed. That decision is made by policies over which schools have no influence -- tax, regulatory, trade, monetary, technology, and labor-market policies that modify the market forces affecting how much workers will be paid. Continually upgrading skills and education is essential for sustaining growth as well as for closing historic race and ethnic gaps. It does not, however, guarantee economic success without policies that also reconnect pay with productivity growth.

American middle-class living standards are threatened, not because workers lack competitive skills but because the richest among us have seized the fruits of productivity growth, denying fair shares to the working- and middle-class Americans, educated in American schools, who have created the additional national wealth. Over the last few decades, wages of college graduates overall have increased, but some college graduates -- managers, executives, white-collar sales workers -- have commandeered disproportionate shares, with little left over for scientists, engineers, teachers, computer programmers, and others with high levels of skill. No amount of school reform can undo policies that redirect wealth generated by skilled workers to profits and executive bonuses.

College graduates are, in fact, not in short supply. A background paper for the Tough Choices report (but not one publicized in the report itself) acknowledges that "fewer young college graduates have been able to obtain college labor market jobs, and their real wages and annual earnings have declined accordingly due to rising mal-employment." In plain language, many college graduates are now forced to take jobs requiring only high school educations.

Rephrase that: inefficiently many college graduates are purchasing a high school education that their high schools failed to deliver. Rather than hint at a conspiracy among the sales managers and the corporate offices to keep the engineers and teachers poor, consider the continued lamentations from the personnel department about the lack of skilled workers, who have to be purchased with better pay packets (and I keep beating the drums for more favorable hours of work).

While it's popular to blame the U.S. education system for the lack of skilled workers and to look at elementary and secondary schools as the place to solve the crisis, manufacturers can't refute that lower turnover is one of most potent salves to this problem, and the ingredients to this salve are better working conditions, higher pay and more training. And, these challenges are more easily addressed than an overhaul of the U.S. education system.

That strikes me as more likely to succeed than raising wages by restricting output, as Mr Mishel and Mr Rothstein would have us do.

Another too glib canard is that our education system used to be acceptable because students could graduate from high school (or even drop out) and still support families with good manufacturing jobs. Today, those jobs are vanishing, and with them the chance of middle-class incomes for those without good educations.

It's true that many manufacturing jobs have disappeared. But replacements have mostly been equally unskilled or semiskilled jobs in service and retail sectors. There was never anything more inherently valuable in working in a factory assembly line than in changing bed linens in a hotel. What made semiskilled manufacturing jobs desirable was that many (though not most) were protected by unions, provided pensions and health insurance, and compensated with decent wages. That today's working class doesn't get similar protections has nothing to do with the adequacy of its education. Rather, it has everything to do with policy decisions stemming from the value we place on equality. Hotel jobs that pay $20 an hour, with health and pension benefits (rather than $10 an hour without benefits), typically do so because of union organization, not because maids earned bachelor's degrees.

It is cynical to tell millions of Americans who work (and who will continue to be needed to work) in low-level administrative jobs and in janitorial, food-service, hospitality, transportation, and retail industries that their wages have stagnated because their educations are inadequate for international competition. The quality of our civic, cultural, community, and family lives demands school improvement, but barriers to unionization have more to do with low wages than does the quality of education. After all, since 1973 the share of the workforce with college degrees has more than doubled; over 40 percent of native-born workers now have degrees beyond high school. Additionally, the proportion of native-born workers that has not completed high school or its equivalent has decreased by half to just 7 percent.

Left unstated: that those unionized factory jobs were the consequence of closed markets and little global competition after the second World War. Oligopolistic prices above competitive levels made possible the union scale wages based on the resulting marginal revenue product, and the substitution of more productive technology induced by those union wages meant fewer people shared in the prosperity. Consumers, understandably, balked at paying the higher prices for the products, and substituted the first chance they saw.