Skills-Based Education Can Help Solve The Inequality Puzzle

Income inequality has been a dominant topic of debate in recent months and will likely influence the coming presidential race. A common argument advanced by fans of inequality economist Thomas Piketty is that, relative to Europe, income inequality in the United States is undermining the economic opportunities of low-income Americans. Yet noticeably absent from this conversation is an in-depth comparison of American and European education systems. A close look reveals that despite the best intentions from civil rights activists, American educational pathways are having a profoundly negative impact on earning potential among members of low-income communities, who deserve much better.

America lags behind most European nations in providing young people with middle-skilled, technical training. This is having a deleterious effect on the life prospects of workers from disadvantaged backgrounds. Research from Harvard University shows that only 2 percent of U.S. high school students concentrate in vocational educational programs, compared with almost 50 percent in Europe’s most economically competitive nations. In Austria, Denmark, Germany, the Netherlands, Norway and Switzerland, between 40 and 70 percent of high school students select an educational program that combines academic instruction with real-world job training.

These young Europeans finish high school with the equivalent of a technical degree from an American community college. Should they choose to extend their academic education they have that option, but if not, they have a basic skills floor to build upon. It’s no wonder then—despite some unrelated anti-growth policies American policymakers eschew—that youth unemployment is lower in all these countries than in the United States. Youth unemployment is higher in some countries with better skills-based training, but these places have fewer, broad-based economic freedoms than the United States.

Countries with comparable across-the-board economic freedoms and superior skills-based training outscore America among opportunities for the young. Youth unemployment in Germany was just 7.6 percent, compared to 14.2 percent in the United States, according to data from the Organisation for Economic Cooperation and Development. In Japan, which also encourages occupational training, youth unemployment was just 6.5 percent.

By contrast, in America we encourage our students to load up on staggering amounts of college debt, often for degrees that offer few marketable skills. Millions of middle-skilled jobs go unfilled because of this skills gap (the Bureau of Labor Statistics reported 4.8 million job vacancies in October).

For-profit colleges have sought to fill this gap by offering technical degrees, but some of them have been unfairly targeted by the Obama administration because of high loan defaults among their students. Yet, higher default rates may be due to the fact that for-profit school disproportionately serve low-income populations. These students could have acquired similar skills in public high schools under current funding streams, but have not.

This disappointing trend arose from the well-intentioned purpose of dismantling a stratified educational system of skills-based vs. theoretical-based tiers, in hopes of creating greater opportunities for historically disadvantaged Americans, particularly among communities of color.

Civil rights leaders worried that minority students were siloed into skills-based occupations that hampered their lifetime career trajectory. In practice this meant obliterating vocational training from high schools across the country and shifting the focus to college-preparatory academics. Ethnically homogeneous European countries without America’s troubled racial past did not experience such changes.

“By the end of the 1950s, what was once a perfectly respectable, even mainstream, educational path came to be viewed as a punitive or remedial track designed to hold minority and working-class students back,” writes author Nicholas Wyman in his forthcoming book, Job U: How to Find Wealth and Success by Developing the Skills Companies Actually Need. “In short it had become, as The Economist magazine put it, ‘America’s most sneered-at high-school program.’”

Wyman cites evidence from Ohio State University showing that at-risk youth benefit the most from vocational education because it does a better job than traditional schooling in keeping them engaged and preventing dropout and incarceration. He argues that technical training should not be viewed as a ceiling but a solid floor for students—a set of “stackable” skills to build upon, regardless of future career path. As the Harvard report cited above states: “[T]he ‘college for all’ rhetoric that has been so much a part of the current education reform movement needs to be significantly broadened to become a ‘post high-school credential for all.’”

The stigmatization of skills-based education has been harmful to the African-American community, where youth unemployment is 25 percent. Rev. William Mathis, a New Haven, Connecticut-based African-American pastor, attorney, and civil rights activist who mentors young men, agrees that too many children are shuttling through the system without getting a balanced education grounded in both theoretical and real-world skills. “One should not be exclusive of the other, people should be given options,” said Mathis, 50, who grew up attending public schools in Georgia, where in high school he said he received vocational training as well as traditional academic training. “Being well-rounded is a good thing,” he said. “The economy demands being versatile in a number of areas.”

Republican Sen. Tim Scott, the first African-American U.S. Senator elected in the post-Reconstruction South, said the past 30 years have seen a decline in vocational education that has hit lower-educated Americans, regardless of race. Sen. Scott, a strong proponent of skills-based education and training, was instrumental in passing elements of the Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act, to improve job training, especially for at-risk youth. Now he’s fighting for the Leveraging and Energizing America’s Apprenticeship Programs (LEAP) Act, which would provide a tax credit to employers to help increase the number of registered apprenticeships, which are key job entry points for young workers. “That will give kids the opportunity to make a choice, as opposed to just choosing college or nothing,” Sen. Scott said.

In the near future, two-thirds of jobs will not require a four-year college degree, according to research from Georgetown University. If we are serious about discussing income inequality, we need to get serious about equipping the most vulnerable members of our society with the skills they need to navigate this globalized economy.