Redefining American Education To Rekindle Growth

Americans face daunting challenges beyond the apparent grasp of the principal contenders for president. Rekindling growth and creating enough good-paying jobs will require wholly rethinking how we educate and socialize young people for work.

Economic growth since the financial crisis has been a disappointing 2.1 percent, and this year it has slowed to about 1.6 percent. That is not enough to finance our commitments to seniors, rising health care costs and an adequate national defense, never mind provide for federally subsidized child care and other initiatives proposed by Donald Trump and Hillary Clinton.

Consumers are spending again, but growth is held back by lackluster business investment. And more is at work than high business taxes, onerous regulations and competition from Chinese imports.

With accelerating technological progress — 3D printers, automated checkout machines and pocket phones that double as personal assistants — economists would expect a surge in capital spending and the creation of significant new, higher-paying jobs to implement those innovations. Not just for whiz-kid engineers and industrial designers but also for folks to make and service the devices that replace assembly line workers, store help and clerical workers.

Those haven’t happened for two reasons. Many of the newest machines are fairly inexpensive to install and run, hence businesses can modernize and expand with less capital than in the past. And as retailers and other service enterprises automate and manufacturers switch over from assembling products to making smart machines and robots that do all these things, they face profound skill shortages among American workers.

Consequently, the dollars spent on new capital equipment throughout the economy remain depressed, and the new jobs created to manufacture and deploy new technologies are simply too few to adequately employ the working-age population.

Big tech companies like IBM and Hewlett-Packard are shrinking, and Apple and Microsoft are more challenged to grow, not because they can’t innovate but because smaller enterprises and the self-employed often can do so more nimbly and efficiently. The latter often can provide business services, hardware and software with more flexible product designs and fewer workers.