January 8, 2017

Sina-cism: It’s the economy, smarty, so get to work

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Cook cited the ratio of 1:2:7 in the popular video “Success in the New Economy” — for every job requiring a master’s degree there are two requiring a bachelor’s degree and seven requiring a certificate or training program that might take just one or two years.
Chris Sinacola

Chris Sinacola

If you are still blaming racism, Russia or Viking runes for Donald Trump’s victory, let me remind you of James Carville’s phrase that helped Bill Clinton unseat President George H.W. Bush in the 1992 election: “The economy, stupid.”

In spite of all that was said and done over the last year, the 2016 election was tipped Trump’s way by blue-collar voters in Middle America dissatisfied with the nation’s overall economic growth and frustrated by the stagnation, decline or disappearance of their wages and jobs.

The narrowness of Trump’s win — and Hillary Clinton’s loss — had something to do with their personal shortcomings. It had far more to do with the uneasiness of voters who wanted change, but who were not fully convinced Trump can deliver that change.

After all, the U.S. economy is complex beyond imagining, its course determined by more factors that any single person — or presidential Cabinet — can hope to comprehend. At best, leaders can take a few modest steps in what they hope is the right direction.

More Sinacola: Some of last year’s top Sina-cism

Some of the most obvious factors affecting the U.S. economy today — and shaping the economies of Massachusetts and Worcester County — are technology, globalization, job training and wages/productivity.

Technology comes first because it is both the reason so many old-economy jobs disappear, as well as the driving force in creating so many new-economy jobs. Economists today see this as an example of “creative destruction,” a concept introduced by Austrian-American economist Joseph A. Schumpeter in his landmark 1942 book “Capitalism, Socialism and Democracy.”

But Schumpeter’s work, grounded in a close reading of Karl Marx, was speaking not specifically about technology, but about capitalism itself. And Schumpeter’s conclusion was that capitalism would eventually self-destruct.

Only years later, during the post-World War II boom, did free-market economists appropriate Schumpeter’s language and begin to argue that creative destruction is one of the ways capitalist economies renew themselves.

I think that claim is correct largely because the years since 1942 have witnessed a technological revolution Schumpeter could not foresee. It’s a very long way from ENIAC to Google, and millions of well-paid, successful Americans can be thankful for that.

But the capitalist and technology framework supporting our American economy in 2017 exists in a global context. That is our second factor: The rise of other peoples and economies. The end of colonialism and the rise of new economic powers — a more-or-less united Europe, India and the giants of East Asia — makes ours an era of fierce, global competition.

Everyone complains that many jobs have gone overseas. True, but millions of good jobs have not, and will not, provided Americans are willing to learn more and work smarter.

Whether they do — whether our nation doesn’t merely survive, but thrives — depends upon the third factor: Education and job training. As Ken Cook outlined in a September edition of Worcester Business Journal, manufacturing leaders in Massachusetts have plenty of employment opportunities, but often lack enough qualified applicants to fill those jobs, most of which do not require a four-year degree.

Cook cited the ratio of 1:2:7 in the popular video “Success in the New Economy” — for every job requiring a master’s degree there are two requiring a bachelor’s degree and seven requiring a certificate or training program that might take just one or two years.

Here government can help: Expand job training. Fund more Job Corps programs. Write tax policy that encourages companies to train their workers, or lets those workers get tax breaks to train for new careers in emerging fields.

And help the least advantaged — including many poor, urban students — by expanding vocational education, and ending restrictions on public charter schools, which spur competition and innovation.

Finally, U.S. productivity, which goes hand-in-hand with wages, has increased just 1.2 percent annually since 2008. In National Review, Robert D. Atkinson argues for a national productivity strategy.

It’s a solid idea, but can only succeed if Trump and party leaders put away rhetoric and pettiness and work together.

I hope Trump and his team succeed. But whatever happens in Washington, Americans must remember that a sovereign people are the ultimate trump card. We, not our leaders, are primarily responsible for our economic success.

The election is over. It’s time to get to work. Whatever your income, class or color, you have access to technologies, tools and training previous generations never enjoyed, and much of it is closer, cheaper and more accessible than you think.

In 2017, resolve to get better educated, better — and specifically — trained. Then get to work. Opportunity is waiting.

Chris Sinacola is a Worcester Sun columnist. His observations on politics, current events, history and more appear every Sunday.

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