America's skills crisis carries lessons for Britain

There are few US ills that don't owe something to its faltering educational attainment.

Yesterday's FT contained one of those ominous stories that only grow in significance over time - the findings of a survey by Nielsen that reveals a huge, looming skills shortage in the US as the baby boomer generation retires.

In the next five years, America's top 100 industrial companies face an average training bill of $100m to fill the gap between these older, retiring workers and the younger, less educated cohort coming through to replace them. It's payday - in a very real sense - for an economy that has long been under-investing in its people. And it's a warning sign to economies like the UK that, when it comes to investing in skills, you can't afford to take your eye off the ball.

Despite their modest place on page 22 of the paper, it's hard to overstate the long-term significance of findings like these. The killer reading on the topic is the excellent book by Harvard economists, Claudia Goldin and Larry Katz, The Race Between Education and Technology, which tells the story of America's relationship with education throughout the 20th century.

The authors recall the country's early lead in education, achieved by building one of the world's first universal systems of free primary schooling. And they set out how, since the 1970s, that lead has been squandered: the quality of teaching in the country's school system has decayed, high school graduation rates have flat-lined, and too many students - even among those who make it to college - have failed to reach the end of four year degrees.

There are few American ills that don't owe something to this faltering of educational attainment. But perhaps the most dramatic consequence has been for the living standards of ordinary American workers. The supply of skilled labour may have slowed, but new technologies wait for no man: advances in computing have only accelerated, making education ever more important in the jobs market.

As a result, the returns to skills, at all levels, but particularly at the top, have increased sharply since the 1980s. This increase explains much of the rise in American income inequality in the past 30 years. And even for average workers the results have been dramatic; astonishingly, the real value of wages for the median American worker has barely increased in 30 years.

In America's race between education and technology, then, technology has taken a commanding lead. But what does this mean for the UK? For one thing, it means that the jobs package announced yesterday by President Obama carries a lesson for the Chancellor George Osborne. Around 15 per cent of the proposed new spending is to go into education: $25 billion to modernise 35,000 crumbling schools, alongside $35 billion to prevent the layoff of up to 280,000 teachers. Obama has found an approach that targets both the current and future needs of the American workforce.

None of this is to say that the Chancellor should be finding new money for our schools, above existing budgets. Happily, the UK school system is in nowhere near the same crumbling state as that in the US. But it does remind us that, when it comes to the supply of skills, we have little room to be complacent.

Returns to skills in the UK have continued to rise in the past ten years, both in terms of wage advantages and upward mobility, even while graduate numbers have increased dramatically. Any slowing of educational expansion will likely feed through into higher wage premiums for skills and, from there, into higher income inequality. That matters not just for our long-term economic health but also for the fairness of any eventual recovery.

James Plunkett leads the Resolution Foundation's Commission on Living standards.

James Plunkett is director of policy and development at the Resolution Foundation

Getty.
Show Hide image

Andy Burnham and Sadiq Khan are both slippery self-mythologisers – so why do we rate one more than the other?

Their obsessions with their childhoods have both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

Andy Burnham is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s widely seen as an unprincipled flip-flopper.

Sadiq Khan is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s the hugely popular mayor of London, the voice of those who’d be proud to think of themselves as the metropolitan liberal elite, and is even talked of as a possible future leader of the Labour party.

Oh, and also they were both born in 1970. So that’s a thing they have in common, too.

Why it is this approach to politics should have worked so much better for the mayor of London than the would-be mayor of Manchester is something I’ve been trying to work out for a while. There are definite parallels between Burnham’s attempts to present himself as a normal northern bloke who likes normal things like football, and Sadiq’s endless reminders that he’s a sarf London geezer whose dad drove a bus. They’ve both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

And yes, Burnham apparent tendency to switch sides, on everything from NHS privatisation to the 2015 welfare vote to the leadership of Jeremy Corbyn, has given him a reputation for slipperiness. But Sadiq’s core campaign pledge was to freeze London transport fares; everyone said it was nonsense, and true to form it was, and you’d be hard pressed to find an observer who thought this an atypical lapse on the mayor’s part. (Khan, too, has switched sides on the matter of Jeremy Corbyn.)

 And yet, he seems to get away with this, in a way that Burnham doesn’t. His low-level duplicity is factored in, and it’s hard to judge him for it because, well, it’s just what he’s like, isn’t it? For a long time, the Tory leadership’s line on London’s last mayor was “Boris is Boris”, meaning, look, we don’t trust him either, but what you gonna do? Well: Sadiq is Sadiq.

Even the names we refer to them by suggest that one of these two guys is viewed very differently from the other. I’ve instinctively slipped into referring to the mayor of London by his first name: he’s always Sadiq, not Khan, just as his predecessors were Boris and Ken. But, despite Eoin Clarke’s brief attempt to promote his 2015 leadership campaign with a twitter feed called “Labour Andy”, Burnham is still Burnham: formal, not familiar. 

I’ve a few theories to explain all this, though I’ve no idea which is correct. For a while I’ve assumed it’s about sincerity. When Sadiq Khan mentions his dad’s bus for the 257th time in a day, he does it with a wink to the audience, making a crack about the fact he won’t stop going on about it. That way, the message gets through to the punters at home who are only half listening, but the bored lobby hacks who’ve heard this routine two dozen times before feel they’re in the joke.

Burnham, it seems to me, lacks this lightness of touch: when he won’t stop banging on about the fact he grew up in the north, it feels uncomfortably like he means it. And to take yourself seriously in politics is sometimes to invite others to make jokes at your expense.

Then again, perhaps the problem is that Burnham isn’t quite sincere enough. Sadiq Khan genuinely is the son of a bus-driving immigrant: he may keep going on about it, but it is at least true. Burnham’s “just a northern lad” narrative is true, too, but excludes some crucial facts: that he went to Cambridge, and was working in Parliament aged 24. Perhaps that shouldn’t change how we interpret his story; but I fear, nonetheless, it does.

Maybe that’s not it, though: maybe I’m just another London media snob. Because Burnham did grow up at the disadvantaged end of the country, a region where, for too many people, chasing opportunities means leaving. The idea London is a city where the son of a bus driver can become mayor flatters our metropolitan self-image; the idea that a northerner who wants to build a career in politics has to head south at the earliest opportunity does the opposite. 

So if we roll our eyes when Burnham talks about the north, perhaps that reflects badly on us, not him: the opposite of northern chippiness is southern snobbery.

There’s one last possibility for why we may rate Sadiq Khan more highly than Andy Burnham: Sadiq Khan won. We can titter a little at the jokes and the fibs but he is, nonetheless, mayor of London. Andy Burnham is just the bloke who lost two Labour leadership campaigns.

At least – for now. In six weeks time, he’s highly likely to the first mayor of Greater Manchester. Slipperiness is not the worst quality in a mayor; and so much of the job will be about banging the drum for the city, and the region, that Burnham’s tendency to wear his northernness on his sleeve will be a positive boon.

Sadiq Khan’s stature has grown because the fact he became London’s mayor seems to say something, about the kind of city London is and the kind we want it to be. Perhaps, after May, Andy Burnham can do the same for the north – and the north can do the same for Andy Burnham.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.