Education and Economic Recovery

As members of Congress continue to debate the stimulus package, education spending has been offered as a way to support cash-strapped schools and preserve jobs. As a college professor, I have been watching how higher education fares in the plan. Some are arguing that this plan should only be used to help create jobs now. So to some, funding college student aid or assisting public colleges and universities with infrastructure improvements (buildings, upgrades for technology and the like) is not as high a priority as, say, other kinds of job creation projects. As the argument goes, any such spending would be wasteful if there is no immediate impact on getting the economy moving. So arts programs, for example, don't look so good under this analysis.

On the one hand, give the severity of unemployment, foreclosures, and the like, and that people are really hurting, there is a lot to be said for keeping this plan focused. Yet, I cannot help but think that we need not be short-sighted about this. A recent article in the New York Times about the kinds of ways that Japan invested in during their "lost decade" of recession included greater investment in education. While some construction projects were really akin to the "bridge to nowhere" pork spending that became so visible during the U.S. Presidential campaign, those investing in Japan's future economy were better investments. As the Times article suggests, there may be lessons for us here in the U.S. (recognizing the different social and economic system of Japan as compared to the U.S.):

"Economists said the finding suggested that while infrastructure spending may yield strong results for developing nations, creating jobs in higher-paying knowledge-based services like health care and education can bring larger benefits to advanced economies like Japan, with its aging population. “In hindsight, Japan should have built public works that address the problems it faces today, like aging, energy and food sources,” said Takehiko Hobo, a professor emeritus of public finance at Shimane University in Matsue, the main city of Shimane. “This obsession with building roads is a holdover from an earlier era.”

I wonder, then, in the readiness to get people back to work quickly, which we need to do, may come at the expense of investing in the future. Education, it seems to me and a lot of other people, is one of those kinds of investments which pays off, yet takes time to realize over a lifetime. Even if one takes a very practical point of view, getting a BA or an advanced degree has historically reduced people's risk of unemployment. A look at January 2009's unemployment numbers from the Bureau of Labor Statistics suggests as much. While those with less than a high school diploma have a 12% unemployment rate, those with a BA or higher have a 3.8% unemployment rate. Even with disagreements as to whether such data tells the full picture, might that stark difference tell us something?