Investment in Education Is Best for the Economy
The best way to help the working class and create jobs is not to raise the minimum wage, but to invest government dollars in education.
(Photo Credit: moyerphotos/Flickr)
Many thanks to Kimberly Amadeo, the About.com U.S. Economy Guide, for taking the time to answer a few questions about the economy and the minimum wage. This is the second of a three-part series addressing issues regarding wages and the economy.
Yesterday, we discussed how simply raising the minimum wage does not always help, and sometimes even makes the situation worse. This invites the question, “what can we do to make things better?”
In your opinion, what is the single most important thing we can do to:
1. Create jobs?
2. Create jobs with a “living wage,” as defined by at least $12 per hour?
Education and job training geared towards employment. First, do more to help high school students select careers that match their skills and interests. So many people have gotten college educations and now find it doesn’t help them get a job because it was in an area that wasn’t in demand. Meanwhile, positions for engineers, computer techs, and robot managers go without.
We should put more priority onto educating our workforce. Skilled workers don’t have to worry about poverty or the minimum wage, because they can earn more. If the minimum wage had been indexed to the CPI over the last 40 years, it would now be $10.41. However, if it had kept pace with executive level pay increases, it would be $23/hour.
Second, retrain the long-term unemployed that find they no longer have the skills needed in the workplace. The longer they are unemployed, the worse this becomes.
Third, switch more federal spending from defense into education. One billion spent hiring teachers creates 17,687 jobs, and pumps $1.3 billion into the economy, as more highly educated people get better jobs on their own, and are able to buy more things with the higher wages they earn. The same amount in military spending only creates 8,555 jobs, because it’s so capital intensive.
Tell Us What You Think
What did you study in school? Is it helping you in your career today? Leave us a comment or join the conversation on Twitter.