New York Times Archives - Michigan Future Inc. https://michiganfuture.org/tag/new-york-times/ A Catalyst for Prosperity Wed, 04 Apr 2018 00:04:00 +0000 en-US hourly 1 https://michiganfuture.org/wp-content/uploads/2024/01/cropped-MFI-Globe-32x32.png New York Times Archives - Michigan Future Inc. https://michiganfuture.org/tag/new-york-times/ 32 32 How important are standardized test scores to life outcomes? https://michiganfuture.org/2018/03/important-standardized-test-scores-life-outcomes/ https://michiganfuture.org/2018/03/important-standardized-test-scores-life-outcomes/#respond Wed, 28 Mar 2018 12:00:52 +0000 https://michiganfuture.org/?p=10190 Last week, the Equality of Opportunity Project, led by Stanford economist Raj Chetty, released another study in their ongoing series on mobility in America. This one was particularly sobering. The headline: black males raised in wealthy households (the top quintile of household incomes), are more likely to be poor as adults than they are to […]

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Last week, the Equality of Opportunity Project, led by Stanford economist Raj Chetty, released another study in their ongoing series on mobility in America. This one was particularly sobering. The headline: black males raised in wealthy households (the top quintile of household incomes), are more likely to be poor as adults than they are to remain wealthy. The odds that a black male raised in a top quintile household would remain in the top quintile as an adult is 17 percent, while there is a 21 percent chance he would fall to the bottom quintile. White males raised in top quintile households have an almost 40 percent chance of remaining there as adults, and even white males who grow up poor, in a bottom quintile household, have a 10 percent chance of making it to the top.

The larger story of this research is about the pernicious impacts of racism – both institutional and individual. But this research also sheds light on how many of our current theories for how to reduce racial gaps in economic mobility are inadequate. And how one theory in particular – closing the black-white test score gap – is particularly inadequate.

The new research shows that while black males earn substantially less than white males at every parental household income percentile (the wealth of the family you grew up in), this gap does not exist for women. However, just as it does for men, a large black-white test score gap does exist for women, controlling for family income. So even though throughout their educational lives black females score lower than white females of similar background on achievement tests, this new research finds that there is virtually no difference between black and white females of similar background in high school graduation, just a small gap in college attendance, and no gap in earnings.

As an analysis of the study in the New York Times put it, a likely explanation for why the female black-white test score doesn’t translate to an income gap is that “test scores don’t accurately measure the abilities of black children in the first place.”

While this may seem like a pretty incredible finding, it’s actually just another in a long line of studies that call into question why standardized test scores have become the sole focus of our education system. In the book Crossing the Finish Line, one of the most authoritative studies ever written on college completion, researchers found that a student’s SAT/ACT scores were far less predictive of their eventual college completion than their high school grades. A recent study of the University of California admissions system found that test scores “predict less than 2 percent of the variance in student performance at UC.” And Jay Greene, who heads the Department of Education Reform at the University of Arkansas and sits firmly in the pro-school choice camp – which is typically also pro-test – has written extensively about the number of studies that find that great test score gains don’t predict the outcomes we ultimately care about, like college attendance, college graduation, and later-in-life earnings.

This is really important because when people talk about improving education in Michigan, or becoming a top 10 state in education, or giving all Michigan kids a fair shot, they’re talking about test scores. We want to believe that if we improve test scores and close achievement gaps, that will lead to better life outcomes. All of this research calls this very idea into question.

Again, the larger takeaway from this new mobility research is about reforming a criminal justice system that imprisons far too many black men, and encouraging racial integration in all facets of life through public policy. However, there are lessons for schools in here as well. Throughout the paper, there are graphs showing black males less engaged in school – higher rates of “disruptive” behavior, higher rates of suspension, lower college attendance. But as long as our school system remains hyper-focused on test scores – which turn out to mean much less than we think they do – it will crowd out all of the other things we could be focusing on, which could help engage more students and offer a better shot at success in life. These other things are far less clear than a standardized test score, and have more to do with finding a sense of purpose, belonging, and competence in your educational life than on meeting any threshold on a standardized test.

Designing schools to meet these more nebulous objectives is really hard, but it’s where we should place our focus if we want our schools to have a lead role in providing equal opportunity.

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The powerful myth of the young, unemployed BA https://michiganfuture.org/2018/02/powerful-myth-young-unemployed-ba/ https://michiganfuture.org/2018/02/powerful-myth-young-unemployed-ba/#respond Wed, 28 Feb 2018 13:00:11 +0000 https://michiganfuture.org/?p=10047 It passes for conventional wisdom these days that there’s a large mass of young college graduates (those with a four-year degree or more) who can’t find a job. Everyone seems to have a story about a friend of a friend whose son or daughter got a fancy degree from a fancy university, but is now […]

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It passes for conventional wisdom these days that there’s a large mass of young college graduates (those with a four-year degree or more) who can’t find a job. Everyone seems to have a story about a friend of a friend whose son or daughter got a fancy degree from a fancy university, but is now living in their parents’ basement, with no skills and no prospects.

So prevalent is this narrative, it all but demands a bit of fact checking. So I looked at the numbers.

Young people always struggle in the labor market. Young college graduates struggle less

The first thing to know is that freshly minted college graduates always do worse than their more experienced peers. Employers, all else equal, would prefer to hire workers with experience. In the spring of 2016, the Economic Policy Institute looked at the unemployment rate for young college graduates, aged 21 to 24 – a fairly small group, as many college graduates don’t finish their degree until after age 24.

Despite that, the unemployment rate for this young but educated cohort was just 5.6 percent, roughly where it’s been for the past 25 years, outside of economic booms and busts.

But if this is slightly elevated, it doesn’t take long for young college grads to find their footing. The current unemployment rate for 25- to 34-year-olds with a BA is just 2.5 percent. If you’re surprised, you’re not the only one. Respondents to a New York Times survey in the spring of 2016 put the unemployment rate for 25- to 34-year-olds with a BA between 6.5 and 9 percent – despite being told that the unemployment rate for high school graduates with no further education was 7 percent. The myth of the college educated basement dweller is powerful indeed, but, as the data shows, it’s nothing more than a myth.

And while the unemployment rate for young college graduates is higher than for their somewhat older peers, the unemployment rate for young high school graduates that do not go on to college is incredibly high, up at 18% in the spring of 2016.

This rate also drops as these individuals enter the 25- to 34-year-old age bracket, but remains nearly two and a half times the unemployment rate for BAs.

Here are the numbers today for the 25- to 34-year-old age bracket: the unemployment rate for those with no education beyond high school is 6.7 percent; for those with some college (including an associate’s degree) it is 5 percent; and for those with a bachelor’s degree is 2.5 percent.

What about earnings?

Many of the anecdotes about the plight of college graduates have to do not with unemployed college grads but underemployed college grads – the graduate from a fancy college now working as a barista or in retail. Sure, these college grads may be employed, one might say, but they’re employed in low-level jobs that don’t require a college education.

Again, the data doesn’t support the anecdote. Or if it does, the coffee shops are paying pretty well.

A couple weeks ago, Lou wrote about how the wage premium associated with earning a bachelor’s degree continues to grow, contrary to the popular narrative. It turns out that this wage premium holds if we just look at the younger cohort as well. Based on 2015 data from the Current Population Survey, those in the 25 to 34 age bracket with a bachelor’s degree were earning a median of $50,000, far higher than those with an associate’s degree or some college ($34,600 to $37,000) and those with just a high school diploma ($30,550).

While there is some evidence that young college graduates today have slightly higher underemployment rates than young college graduates in the early 2000s (in this case, underemployment means working in a job that doesn’t require a bachelor’s degree), this is probably to be expected for graduates entering the economy after the Great Recession. But even in this case, underemployment doesn’t last long, with projected rates of underemployment dropping to historical norms by the time young college graduates reach their early 30s.

Looking at the whole picture

The overall point is this: attaining a bachelor’s degree is not an absolute guarantee of financial success – but it offers the best chance of success for young people entering a rapidly changing economy. It’s worth noting that this has not always been the case. In the mid-1970s, the bachelor’s degree wage premium narrowed considerably, as college graduates flooded the market and good-paying work could still be found with a high school diploma.

But in recent years, despite the fact that we have more college graduates in the labor market than ever before, the college wage premium has continued to increase, and these grads continue to be employed at far higher rates than their less educated peers.

All that to say, if you’re worried about that college graduate in your basement, rest easy – they should be out of the house soon enough.

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Automating mining and fast food jobs https://michiganfuture.org/2017/01/automating-mining-and-fast-food-jobs/ https://michiganfuture.org/2017/01/automating-mining-and-fast-food-jobs/#comments Wed, 11 Jan 2017 13:21:32 +0000 https://www.michiganfuture.org/?p=8174 Recent articles on automation in mining and fast foods reinforce that the new reality is that many jobs and occupations in a wide range of industries are likely to disappear sooner rather than later. The mining story comes from the MIT Technology Review. Its entitled This truck is the size of a house and doesn’t have […]

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Recent articles on automation in mining and fast foods reinforce that the new reality is that many jobs and occupations in a wide range of industries are likely to disappear sooner rather than later.

The mining story comes from the MIT Technology Review. Its entitled This truck is the size of a house and doesn’t have a driver. The article reports on mining companies across the planet using machines to do work traditionally done by miners. They write (emphasis added):

Rob Atkinson, who leads productivity efforts at Rio Tinto, says the fleet and other automation projects are already paying off. The company’s driverless trucks have proven to be roughly 15 percent cheaper to run than vehicles with humans behind the wheel, says Atkinson—a significant saving since haulage is by far a mine’s largest operational cost. “We’re going to continue as aggressively as possible down this path,” he says.

Trucks that drive themselves can spend more time working because software doesn’t need to stop for shift changes or bathroom breaks. They are also more predictable in how they do things like pull up for loading. “All those places where you could lose a few seconds or minutes by not being consistent add up,” says Atkinson. They also improve safety, he says.

The fast food story is from Business Insider. It takes on more significance because its about an interview  with then Carl’s Jr. and Hardee’s CEO Andy Puzder, who is President Trump’s Labor Secretary nominee. Business Insider writes:

The CEO of Carl’s Jr. and Hardee’s has visited the fully automated restaurant Eatsa — and it’s given him some ideas on how to deal with rising minimum wages. “I want to try it,” CEO Andy Puzder told Business Insider of his automated restaurant plans. “We could have a restaurant that’s focused on all-natural products and is much like an Eatsa, where you order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person.”

The mining story is about automating relatively high paid jobs, the fast food story about automating lower wage jobs. At some point we are going to have to learn and develop policies that are aligned with the reality that many jobs and occupations in a wide range of industries can and will be automated. And there is nothing public policy can do––and almost certainly shouldn’t try to––to stop this.

All of this is put into perspective in a New York Times’ article entitled The Long-Term Jobs Killer Is Not China. It’s Automation. The Times writes:

The changes are not just affecting manual labor: Computers are rapidly learning to do some white-collar and service-sector work, too. Existing technology could automate 45 percent of activities people are paid to do, according to a July report by McKinsey. Work that requires creativity, management of people or caregiving is least at risk.

This is the reality we need our elected officials to deal with. How to have a mass middle class in an economy where more and more jobs can and will be automated away is not clear. But we need policymakers and advocates engaged in figuring out what to do, rather than promising that they can make the old economy work again.

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Jobs-altering technology https://michiganfuture.org/2016/08/jobs-altering-technology/ https://michiganfuture.org/2016/08/jobs-altering-technology/#respond Mon, 22 Aug 2016 12:03:59 +0000 https://www.michiganfuture.org/?p=7456 One of the new economic realities, that can’t be altered by politics or public policy, is that smarter and smarter machines are going to accelerate creative destruction of jobs, occupations and even industries. The job, occupation and even the industry you work in today are less secure than yesterday, and will be even less secure […]

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One of the new economic realities, that can’t be altered by politics or public policy, is that smarter and smarter machines are going to accelerate creative destruction of jobs, occupations and even industries. The job, occupation and even the industry you work in today are less secure than yesterday, and will be even less secure tomorrow. Both stable occupational skills and predictable career ladders are increasingly toast.

The new reality is that none of us have a clue what the jobs and occupations of the future will be. Today’s job are not a good indicator of what jobs will be in demand when today’s K-12 students finish their careers in the 2050s or 2060s. We simply don’t know how and when smarter and smarter machines are going to change labor markets.

(For those interested in exploring this topic in depth I highly recommend The Second Machine Age by Eric Brynjolfsson and Andrew McAfee of the MIT Center for Digital Business. Or watching the You Tube video Humans Need Not Apply.)

Two recent New York Times articles highlight this new reality. The first is entitled Uber Aims for an Edge in the Race for a Self-Driving Future. The Times reports:

A world in which cars drive themselves may come sooner than once thought.

On Thursday, Uber said that it would begin testing self-driving cars in Pittsburgh in a matter of weeks, allowing people in the city to hail modified versions of Volvo sport utility vehicles to get around the city.

Uber also said it had acquired Otto, a 90-person start-up including former Google and Carnegie Mellon engineers that is focused on developing self-driving truck technology to upend the shipping industry. Those moves are the most recent indications of Uber’s ambitions for autonomous vehicles that can provide services to both consumers and businesses.

And they come after Ford Motor’s announcement this week that it would put fleets of self-driving taxis onto American roads in five years.

Bloomberg in an article on Uber’s Pittsburgh launch writes: “The goal: to replace Uber’s more than 1 million human drivers with robot drivers—as quickly as possible.”

So much for Uber being the leading edge of the so-called gig economy worker. But its not just Uber drivers who are in jeopardy of losing their jobs. Its everyone that drives/pilots a vehicle for a living. In the Humans Need Not Apply video they estimate that is three million Americans and seventy million workers across the globe.

The second article is about AT&T moving from connecting people and delivering content through wires to one where AT&T is providing services through the Cloud. The article is entitled Gearing Up for the Cloud, AT&T Tells Its Workers: Adapt, or Else. (Worth reading. The article deals with the challenges of retraining workers from today’s AT&T skills to tomorrow’s AT&T skills.)

The Times writes:

Long ago, a phone system created wire lines between callers, and operators moved plugs in their switchboards to connect people. Over time, that was automated to become something closer to a computer, with digital fibers and wireless towers. Much of the setup, however, still needed lots of people to tend hardware that had been built for particular tasks, like feeding one neighborhood’s calls into a nationwide backbone of wires, fiber and switches.

Today, Randall Stephenson, AT&T’s chairman and chief executive, is trying to reinvent the company so it can compete more deftly. Not that long ago it had to fight for business with other phone companies and cellular carriers. Then the Internet and cloud computing came along, and AT&T found itself in a tussle with a whole bunch of companies.

AT&T’s competitors are not just Verizon and Sprint, but also tech giants like Amazon and Google. For the company to survive in this environment, Mr. Stephenson needs to retrain its 280,000 employees so they can improve their coding skills, or learn them, and make quick business decisions based on a fire hose of data coming into the company.

The creative destruction that is occurring at Uber and AT&T––more broadly in the information and transportation industries––are examples of what can and will happen in more and more sectors of the economy. Obviously this is not a future we would pick if we had a choice. But unfortunately we don’t. Machines are going to be able to do more and more of the work that humans are currently doing as well as creating new industries that will replace today’s industries.

So the challenge for all of us––particularly our kids––is to develop the agility and ability to constantly switch occupations. Our analogy: are rock climbers, rather than ladder climbers, in a world where known and linear career ladders are rapidly disappearing.

We need a lifelong education system that develops rock climbing skills rather than one that develops narrow occupational skills that increasingly have a shorter and shorter half life.

Bill Wagner, Ann Arbor software entrepreneur, summed up the challenge well in a 2011 AnnArbor.com column:

Preparing people for one job, and one job only, creates a temporary and rigid work force. … Your education must prepare you for a long career that meets constant changes in the job market, and supports your own growth. The only constant during a life-long career is that you’ll need to adapt. The important question for our education system: Are you prepared for all the changes that may come in the future?

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New York City surging https://michiganfuture.org/2015/03/new-york-city-surging/ https://michiganfuture.org/2015/03/new-york-city-surging/#comments Thu, 05 Mar 2015 12:28:33 +0000 https://www.michiganfuture.org/?p=6437 The New York Times reports that New York City has added more jobs over the last five years than during any five year period in the last half century. 425,000 new jobs since the end of 2009. Amazing! By contrast, since the end of 2009 the state of Michigan has added 268,000 jobs. You read […]

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The New York Times reports that New York City has added more jobs over the last five years than during any five year period in the last half century. 425,000 new jobs since the end of 2009. Amazing!

By contrast, since the end of 2009 the state of Michigan has added 268,000 jobs. You read that right: one city has created 157,000 more jobs that our state in what has been ballyhooed as the Michigan comeback.

Its not just Michigan. NYC’s job growth is far outpacing the nation’s. The Times writes: “The dynamism of the city’s economy has fueled a rebound that has been much stronger than for the country as a whole. New York has added three times as many jobs as it lost during the recession. The nation’s gain, however, is well short of twice what it lost.”

What makes this story even more important is the job growth is not coming in finance. The city’s preeminent sector. The Times reports: “Almost every industry in the city has been adding jobs at a healthy pace. Data compiled by the New York State Department of Labor indicates that among the fastest-growing sectors are health services and places that serve food and drinks.” And that: “…fast-growing and well-paying Internet companies like Google, Facebook and BuzzFeed are adding jobs at a fast pace.”

This is more evidence that the low cost/small government places have the best economies conventional wisdom is wrong. As I wrote in a 2011 post:

New York City is probably the highest cost place to do business in America. Not only high state and local taxes, but also high labor costs and, maybe most important, sky high real estate prices. In many ways it is the poster child for big government: big police and fire departments; big park system; public support for the arts; transit, transit, and more transit; one of the few cities with safety net programs over and above the state and federal safety net and on and on and on. Add to that lots of regulation, powerful public employee unions, lots of renters; sky high density; lots of immigrants, gays and folks of different races, religions and ethnicity and you have a recipe for what we are constantly told leads to economic disaster. Wrong!

… Turns out in the real world all those so-called liabilities are assets that lead to prosperity. A big city that works, a government that provides quality basic services and amenities, terrific alternatives to driving, density and welcoming to all. Combine those features with an entrepreneurial culture and you have a place where talent – from across the planet – wants to live and work. And where talent concentrates you get growth and prosperity, not decline and falling income and employment. To get back on the path to prosperity Michigan needs far more – not less – of what New York City has.

 

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Not your father’s middle class https://michiganfuture.org/2015/03/fathers-middle-class/ https://michiganfuture.org/2015/03/fathers-middle-class/#comments Mon, 02 Mar 2015 12:27:26 +0000 https://www.michiganfuture.org/?p=6427 The Upshot section of the New Year Times published a terrific infographic and article on today’s middle class jobs compared to those in 1980. Those that pay between $40,000 and $80,000. Both are highly recommended, especially the infographic. The bottom line is clear: today’s middle class is no longer centered in manufacturing or construction as […]

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The Upshot section of the New Year Times published a terrific infographic and article on today’s middle class jobs compared to those in 1980. Those that pay between $40,000 and $80,000. Both are highly recommended, especially the infographic.

The bottom line is clear: today’s middle class is no longer centered in manufacturing or construction as it was in the 1980s and most of the 20th Century. Today health care is at the center of middle class jobs.

The Times calculates the change per 1000 of middle class workers from 1980-2014. The three occupational categories with the steepest declines? Machine operators and assemblers; skilled production workers; and construction and agriculture workers. The first two, of course, are manufacturing workers. The three occupational categories with the largest gains? Professionals and specialists; managers and administrators; and service workers and sales people. The first two categories––professionals and mangers––are occupations where those with four year degrees or more are concentrated. (Although its not the Time’s topic, these are also the occupations where those who make more than $80,000 are concentrated.)

The infographic contains lists of gains and losses by occupation. If you want to understand today’s American economy take the time to go through the lists. The occupation with the largest gains? Registered nurses. The occupation with the largest decline? Machine operators.

The Times summarizes the data this way:

Most of the new jobs produced by America’s sprawling economy — especially since the turn of the century — are either in highly paid occupations that often require an advanced degree, or, more predominantly, in lower-paid positions providing direct services that cannot be sent overseas and, at least for now, are difficult to automate.

But even with a hollowing out of the job market and a broad stagnation in wages, an analysis by The New York Times has found, a set of occupations has emerged that holds promise as the base of a more robust middle class. Many are in health care, which has grown sharply over the last few decades.

Economists at the Labor Department project that by 2022, as baby boomers age, health care and social assistance will absorb nearly 20 percent of consumer spending, double the share of manufactured goods. The sector is expected to support over 21 million jobs, five million more than today. This includes half a million more registered nurses.

… In 1980, 1.4 million jobs in health care paid a middle-class wage: $40,000 to $80,000 a year in today’s money. Now, the figure is 4.5 million.

The pay of registered nurses — now the third-largest middle-income occupation and one that continues to be overwhelmingly female — has risen strongly along with the increasing demands of the job. The median salary of $61,000 a year in 2012 was 55 percent greater, adjusted for inflation, than it was three decades earlier.

And it was about $9,000 more than the shriveled wages of, say, a phone company repairman, who would have been more likely to head a middle-class family in the 1980s. Back then, more than a quarter of middle-income jobs were in manufacturing, a sector long dominated by men. Today, it is just 13 percent.

The lesson we need to learn is that good paying 21st Century occupations are different from those in the 20th Century. Globalization and technology are driving increasing demand for workers in service sectors and driving demand down for workers in goods producing industries (manufacturing, construction and agriculture).

Unfortunately far too many of Michigan’s political, business and media leadership have not learned that lesson.  Governing Snyder has stated his economic growth priority this way: “Number one would be career tech education for the skilled trades. If you look at it, people know about (becoming a) welder, plumber and electrician. Those are great careers. But now the skilled trades really define most people in manufacturing and agriculture in terms of needing additional training.” Pushing schools to steer our kids towards skilled trades in manufacturing and construction runs counter to the trends/reality of today’s and tomorrow’s economy.

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Louisiana as an education model? https://michiganfuture.org/2015/02/louisiana-education-model/ https://michiganfuture.org/2015/02/louisiana-education-model/#comments Mon, 23 Feb 2015 12:27:01 +0000 https://www.michiganfuture.org/?p=6409 Ever since hurricane Katrina the press, policy makers and other opinion leaders have pointed to Louisiana as a place to look for reforming public education. Primarily because in New Orleans they did away with teachers unions and largely went to providing education by charter schools, rather than a traditional public school district. Michigan has been […]

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Ever since hurricane Katrina the press, policy makers and other opinion leaders have pointed to Louisiana as a place to look for reforming public education. Primarily because in New Orleans they did away with teachers unions and largely went to providing education by charter schools, rather than a traditional public school district.

Michigan has been on the lets learn from Louisiana bandwagon. One problem: Louisiana has terrible k-12 student achievement results. They may have good PR and be “right” for many on education ideology, but when it comes to students learning the results are even worse than Michigan.

And Michigan as we have explored is not doing well at all. The table at the end of this post provides the grades the The United States Chamber of Commerce Foundation gives Louisiana, Michigan and Massachusetts on student achievement metrics in their Leaders & Laggards: A State-by-State Report Card on Educational Effectiveness report.

Across the board Louisiana has Ds and Fs. A little worse than Michigan. Massachusetts gets As. Maybe most important, the nation’s leading business trade association gives Louisiana an F and Massachusetts an A in Postsecondary and Workforce Readiness.

When it comes to urban education, where Louisiana is supposedly making great progress, the Leaders and Laggards report, using NAEP (the so-called nation’s report card) data, provides proficiency scores for 4th and 8th grade reading and math for both African American students and low income students. Louisiana’s African American students proficiency on the four tests ranges from 9-13 percent. For low income students proficiency on the four test ranges from 14-19 percent.

Although still unacceptably low, across the board Massachusetts has far better results for both African American and low income students. Their African American proficiency rates range from 21-28 percent, low income proficiency rates range from 25-31 percent.

The New York Times in a terrific article on Massachusetts education outcomes entitled “Expecting the Best Yields Results in Massachusetts“ describes the state’s approach to improving student outcomes this way:

The three core components were more money (mostly to the urban schools), ambitious academic standards and a high-stakes test that students had to pass before collecting their high school diplomas. All students were expected to learn algebra before high school. … Also noteworthy was what the reforms did not include. Parents were not offered vouchers for private schools. The state did not close poorly performing schools, eliminate tenure for teachers or add merit pay. The reforms did allow for some charter schools, but not many. Then the state, by and large, stayed the course.

Seems like, if the goal is better student achievement and ultimately postsecondary and workforce readiness, Michigan should be looking to A rated Massachusetts––not F rated Louisiana––to learn what policies lead to high student achievement.

 

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Safety net + strong economy https://michiganfuture.org/2015/02/safety-net-strong-economy/ https://michiganfuture.org/2015/02/safety-net-strong-economy/#comments Mon, 09 Feb 2015 13:15:22 +0000 https://www.michiganfuture.org/?p=6364 More evidence that the conventional wisdom that a strong safety net leads to a weak economy is not accurate. As we explored previously that is one of the lessons we should learn from Minnesota. Which has a far more generous safety net than Michigan and the strongest economy in the Great Lakes in terms of […]

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More evidence that the conventional wisdom that a strong safety net leads to a weak economy is not accurate. As we explored previously that is one of the lessons we should learn from Minnesota. Which has a far more generous safety net than Michigan and the strongest economy in the Great Lakes in terms of both employment and personal income.

Richard Florida tackles the topic in a City Lab column entitled “Inequality and the Growth of Cities”. He writes about his own research on American metropolitan areas and reviews research at the national level on the topic by the International Monetary Fund. Finding no evidence that a strong safety lessens economic growth, Florida concludes:

What it boils down to is this: Cities and nations face a choice about inequality. They can permit the gap between the rich and poor to gape even wider, allowing those at the bottom to fall through a porous safety net. Or they can take the high road, combating inequality through redistribution and other mechanisms without giving up their growth. 

The New York Times looks at the effects of a strong safety net on national employment in an article entitled “A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia.” They write:

Some of the highest employment rates in the advanced world are in places with the highest taxes and most generous welfare systems, namely Scandinavian countries. The United States and many other nations with relatively low taxes and a smaller social safety net actually have substantially lower rates of employment. … In short, more people may work when countries offer public services that directly make working easier, such as subsidized care for children and the old; generous sick leave policies; and cheap and accessible transportation.

In addition the article lists “higher minimum wage, stronger labor unions and cultural norms that lead to higher pay” as other policy differences that distinguish Scandinavia from the United States.

Subsidized care for children and the old; generous sick leave policies; cheap and accessible transportation; higher minimum wage; stronger labor unions; and cultural norms that lead to higher pay, of course, are the kind of policies we are constantly told lead to slower economic growth and less employment. Seems like its time to put them back on the more and better jobs agenda.

 

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A Michigan economy not working for many https://michiganfuture.org/2015/01/michigan-economy-working-many/ https://michiganfuture.org/2015/01/michigan-economy-working-many/#respond Thu, 15 Jan 2015 12:41:36 +0000 https://www.michiganfuture.org/?p=6318 Despite all the headlines and headline statistics that say that the Michigan economy is “back” the reality is that many Michiganders are worse off today than they were prior to the onset of the Great Recession. The table at the end of this post displays real median wages for all Michigan full time, year round […]

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Despite all the headlines and headline statistics that say that the Michigan economy is “back” the reality is that many Michiganders are worse off today than they were prior to the onset of the Great Recession. The table at the end of this post displays real median wages for all Michigan full time, year round workers in Michigan and the U.S. and by education attainment in 2007 and 2013. (You can click on the table to expand it.)

Across the board Michiganders have lower wages corrected for inflation today than in 2007––the last year before the Great Recession. Except for those with graduate degrees, wages in Michigan are lower than in the county. And the decline in real median wages in Michigan is substantial greater than in the country. Down about $2,000 nationally compared to about $3,800 in Michigan. Not exactly a Michigan is back story.

In addition to lower real wages, one of the main reasons that the economy is not working for many Michiganders is more and more of us are now contingent workers. Nathan Bomey in a Detroit Free Press article, using data complied by Don Grimes of the University of Michigan, explores how extensive the switch to contingent workers has been in Michigan. Bomey writes:

Although economists have largely credited the auto industry for Michigan’s economic recovery, a closer look at economic data reveals a more nuanced picture. Taken together, about 36% of Michigan’s job gains from 2009 through 2013 came from the temporary staffing sector and self-employment, according to a review of federal jobs data completed by University of Michigan economist Don Grimes for the Free Press.

… Though the temporary help category accounts for only 2.8% of Michigan’s workforce, it added 45,233 jobs from 2009 through 2013, representing a disproportionate 18.6% of the job gains in the state during that period, according to data drawn from the U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

Similarly, the number of Michigan residents who considered themselves self-employed contractors also rose by 18.6% — remarkably, the same percentage as temporary help — during that same time period, increasing by 51,715 jobs, according to U.S. Bureau of Economic Analysis figures. Some of those positions reflect people who are working a regular job and finding work on the side, but the figures indicate that more Michiganders are charting their own path to pay their bills.

The average temporary staffing agency employee in Michigan earned $25,872 in 2013 while self-employed workers reported income of $24,656 — about 45% and 48%, respectively, below the average worker’s wage of $47,131.

“This highlights how the shifting nature of employment has really put a crimp on people’s income,” U-M’s Grimes said in an e-mail.

And many contingent workers suffer from not just low wages but also poor working conditions. In a must read New York Times article entitled “Working Anything but 9 to 5: Scheduling Technology Leaves Low-Income Parents With Hours of Chaos” describes what work is like for an increasing number of Americans. The Times writes:

“Scheduling is now a powerful tool to bolster profits, allowing businesses to cut labor costs with a few keystrokes. … Yet those advances are injecting turbulence into parents’ routines and personal relationships, undermining efforts to expand preschool access, driving some mothers out of the work force and redistributing some of the uncertainty of doing business from corporations to families, say parents, child care providers and policy experts.”

We need to get beyond celebrating Michigan’s improved economy and get serious about realizing Governor’s Snyder’s goal of more and better jobs for all Michiganders. Clearly the state has a long way to go to realize that goal.

 

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Not so rewarding technical training https://michiganfuture.org/2014/11/great-technical-training/ https://michiganfuture.org/2014/11/great-technical-training/#comments Thu, 13 Nov 2014 13:14:49 +0000 https://www.michiganfuture.org/?p=6120 Increasingly the story we are being told about the economy is that there are too many people with four-year degrees and not enough with training for mid-skill jobs. Needing something like an associates degree with an occupational major or occupational certificate. And increasingly we are also being told that getting a four-year degree in a […]

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Increasingly the story we are being told about the economy is that there are too many people with four-year degrees and not enough with training for mid-skill jobs. Needing something like an associates degree with an occupational major or occupational certificate. And increasingly we are also being told that getting a four-year degree in a non-STEM occupation is the road to a debt-ridden life because of out of control tuition, too high student loans and too many college graduates working in jobs that pay too little to pay off those loans. The story continues: A far better path for many would be lower cost training for mid-skill jobs.

Neither story is accurate. We have explored frequently (for more see this recent post) the data on both work and income by education attainment that makes clear that those with a four year degree––including in non-STEM fields––do better than those with two year degrees or some college. In this post I want to deal with the claim that technical training is a lower cost, debt free (or close to it) path to a good paying job and career.

Two recent New York Times articles make clear that technical training is not the panacea many claim to good paying jobs, without taking on lots, if any, student debt. In an extensive article entitled Seeking New Start, Finding Steep Cost: Workforce Investment Act Leaves Many Jobless and in Debt the Times found:

Millions of unemployed Americans like Mr. DeGrella have trained for new careers as part of the Workforce Investment Act, a $3.1 billion federal program that, in an unusual act of bipartisanship, was reauthorized by Congress last month with little public discussion about its effectiveness. Like Mr. DeGrella, many have not found the promised new career. Instead, an extensive analysis of the program by The New York Times shows, many graduates wind up significantly worse off than when they started — mired in unemployment and debt from training for positions that do not exist, and they end up working elsewhere for minimum wage.

The experiences of Mr. DeGrella are featured in the article. The Times reports:

He took each step in line with the advice of the federal government: He met with an unemployment counselor who provided him with a list of job titles the Labor Department determined to be in high demand, he picked from among colleges that offered government-certified job-training courses, and he received a federal retraining grant. In 2009, Mr. DeGrella, began a course at Daymar College — a for-profit vocational institute in Louisville — to become a cardiology technician. Daymar officials told him he would have a well-paying job within weeks of graduation. But after about two years of studying cardiovascular physiology and the mechanics of electrocardiograms, Mr. DeGrella, now 57, found himself jobless and $20,000 in debt. He moved into his sister’s basement and now works at an AutoZone.

In an Upshot article entitled When Higher Education Doesn’t Deliver on Its Promise the Times looks at training for medial assistants. A so-called high-demand occupation that does not require a four-year degree. The Times reports:

But new federal data that track college graduates into the job market tell a far more sobering story. The market for medical-assistant education is deeply troubling. Many people who graduate from such programs struggle to find work. Those who do find work often make little money — too little to repay their debts from the program. Despite the happy poster images, the market for medical-assistant education is actually an allegory for the problems in the parts of higher education that tend to attract low-income and middle-class students: little regulation and uneven — often mediocre — results. The same problems afflict many community colleges, lower-tier four-year colleges and training programs in fields like office management and culinary arts. According to the Department of Labor, the median annual salary for medical assistants in 2011 was $29,100. Yet most recent graduates of medical-assistant training programs earn much less, which suggests the programs are not reliable routes to good jobs as assistants. Among the 100,000 students who earned a medical-assistant certificate in 2008 or 2009, roughly 94 percent attended a program where graduates typically earned less than $20,000 in 2011, the data show.

Somehow conventional wisdom, despite all the evidence to the contrary, has exaggerated the number of mid-skill and/or skilled trades jobs that the economy demands, the pay in those jobs, the costs of preparing for those jobs, and the effectiveness of training programs to prepare their students for good paying jobs and careers. At the same time conventional wisdom is far more negative, once again despite all the evidence to the contrary, about the results for occupations and training for those with four-year degrees.

As we have written often there are good paying jobs and careers available to those with an associates degree with an occupational major or occupational certificate (or their equivalents). You can prepare for those jobs in relatively low tuition, high quality schools––almost always a community college. But for those who have the interest and ability to get a four-year degree that is the most reliable path to a middle class job and, more importantly, middle class or above forty year career.

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