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Since the 1970s, however, growth in educational attainment has slowed to a crawl; college-completion rates have grown exceedingly slowly since the early 1970s, and even high-school graduation rates have been flat.
Meanwhile, with remarkable speed, younger people in many other countries have caught up to or surpassed their
American peers in the classroom. Relatively fewer Americans are in the educational vanguard today, and vastly more foreign workers possess the moderate skills learned in high school (and beyond). These factors have put pressure on the middle and lower classes and increased the income premium that’s gone to those Americans who are in the educational vanguard—a vanguard now filled largely by those with graduate degrees, not merely bachelor’s degrees.

The call to redouble our national commitment to educational opportunity and advancement is loud for a reason: educational progress has long been at the heart of the nation’s success, not only helping the economy grow faster, but also helping to ensure widespread benefits from that growth. There would be no better tonic for the country’s recent ills than a resumption of the rapid advance of skills and abilities throughout the population. Clearly there is room for improvement. About 30 percent of young adults finish college today, yet as noted above, that figure is 50 percent among those with affluent parents. It follows that with improvements in the K–12 school system, better home environments, and widespread financial access to college, we eventually could move to a 50 percent college graduation rate. And because IQ worldwide has been increasing slowly from generation to generation—a somewhat mysterious development known as the “Flynn effect”—higher rates still may eventually come within reach.

Yet the past three decades of experience suggest that this upward migration, even to, say, 40 percent, will likely be slow and difficult. (
Over the past thirty years of data, from 1979 to 2009, the percentage of people aged twenty-five to twenty-nine with a four-year college degree rose from 23.1 percent to 30.6 percent—or roughly one percentage point every four years.) And ultimately, of course, the college graduation rate is likely to hit a substantially lower ceiling than that for high school or elementary school. For a time, elementary school was the answer to the question of how to build a broad middle class in America. And for a time after that, the answer was high school. College may never provide as comprehensive an answer
in the coming decades. Over the next decade or two, college education simply cannot be the whole answer to the woes of the middle class, since even under the rosiest of assumptions, most of the middle of society will not have a four-year college degree.

Among the more pernicious aspects of the meritocracy as we now understand it in the United States is the equation of merit with test-taking success, and the corresponding belief that those who struggle in the classroom should expect little out of life. Progress along the meritocratic path has become measurable from a very early age. This is a narrow way of looking at human potential, and it badly under-serves a large portion of the population. We have beat the drum so loudly and for so long about the centrality of a college education that we should not be surprised when people who do not attend college—or those who start but do not finish—go adrift at age eighteen or twenty.
Grants, loans, and tax credits to undergraduate and graduate students total roughly $160 billion each year; by contrast, in 2004, federal, state, and local spending on employment and training programs (which commonly assist people without a college education) totaled $7 billion—an inflation-adjusted decline of about 75 percent since 1978.

As we continue to push for better K–12 schooling and wider college access, we also need to build more paths into the middle class that do not depend on a four-year college degree. One promising approach, as noted by Ron Haskins and Isabel Sawhill in
Creating an Opportunity Society
, is the development of “career academies”—schools of 100 to 150 students, within larger high schools, with a curriculum that mixes academic coursework with hands-on technical courses designed to build work skills. Some 2,500 career academies are already in operation nationwide. Students attend classes together and have the same guidance counselors; local employers partner with the academies and provide work experience while the students are still in school.

“Vocational training” programs have a bad name in the United States, in part because many people assume they close off the
possibility of higher education. But in fact, career academy students go on to earn a postsecondary credential at the same rate as other high-school students. What’s more, they develop firmer roots in the job market whether or not they go on to college or community college.
One recent major study shows that on average, men who attended career academies were earning significantly more than those who attended regular high schools, both four and eight years after graduation. They were also 33 percent more likely to be married and 36 percent less likely to be an absentee father.

Career-academy programs should be expanded, as should apprenticeship programs (often affiliated with community colleges) and other, similar programs designed to build an ethic of hard work; to allow young people to develop skills and make achievements outside the traditional classroom as well as inside it; and ultimately to provide more, clearer pathways into real careers. By giving young people more information about career possibilities and a tangible sense of where they can go in life and what it takes to get there, these types of programs are likely to lead to more-motivated learning, better career starts, and a more highly skilled workforce. Their impact on boys in particular is highly encouraging. And to the extent that they can also expose boys to opportunities within growing fields like health care (and also expose them to male role models within those fields), these programs might even help erode the various stereotypes that seem to be keeping some boys locked into declining parts of the economy.

“Middle-skill” jobs are not about to vanish altogether. Many construction jobs and some manufacturing jobs will return. And there are many, many occupations—from EMTs, lower-level nurses, and X-ray technicians to plumbers and home remodelers—that trade and technology cannot readily replace, and these fields are likely to grow. A more highly skilled workforce will allow faster, more efficient growth; produce better quality; and earn higher pay.

All that said, the overall pattern of change in the U.S. labor market suggests that in the next decade or more, a larger proportion of
Americans may need to take work in occupations that have traditionally required little skill and that have historically paid low wages.
Analysis by David Autor indicates that from 1999 to 2007, low-skill jobs grew substantially as a share of all jobs in the United States. And
while the lion’s share of jobs lost during the recession were middle-skill jobs, job growth since then has been tilted steeply toward the bottom of the economy; according to a survey by the National Employment Law Project, three-quarters of American job growth in 2010 came within industries paying less than $15 an hour on average. One of the largest challenges that the United States will face in the coming years will be adjusting to this reality and doing what we can to make the jobs that have traditionally been near the bottom of the economy better, more secure, and more fulfilling—more like middle-class jobs, in other words.

As Richard Florida writes in
The Great Reset
, part of that process may be under way already, due to the actions of individual companies. A growing number of companies have been rethinking retail workforce development, to improve productivity and enhance the customer experience, leading to more-enjoyable jobs and, in some cases, higher pay.
Whole Foods Markets, for instance, one of
Fortune
magazine’s best companies to work for, organizes its workers into teams and gives them substantial freedom as to how they go about their work; after a new worker has been on the job for thirty days, the team members vote on whether the new employee has embraced the job and the culture, and hence whether he or she should be kept on. Best Buy actively encourages all of its employees to suggest improvements to the company’s work processes, much as Toyota does, and favors promotion from within. Trader Joe’s requires that full-time employees earn at least a median income within their community; store captains, most of them promoted from within, can earn six figures.

The natural evolution of the economy will surely make some service jobs—even in retail—more productive, independent, and enjoyable over time. Yet even in the best case imaginable, productivity
improvements at the bottom of the economy seem unlikely to be an adequate answer to the economic problems of the lower and middle classes, at least for the foreseeable future. Indeed, the relative decline of middle-skill jobs combined with slow increases in college completion suggests a larger pool of workers chasing jobs in retail, food preparation, security, and the like—and hence downward pressure on wages.

Whatever the unemployment rate over the next several years, the long-term problem facing American society is not that employers will literally run out of work for people to do—it’s that the market value of much low-skill and some middle-skill work, and hence the wages employers can offer, may be so low that many American workers will not strongly commit to that work. Bad jobs at rock-bottom wages are a primary reason why so many people at the lower end of the economy drift in and out of work, which in turn creates highly toxic social and family problems. With little economic security and low prospects for advancement, ambivalence toward low-wage work is common, and resentments can come easily to the surface, leading to serial job loss and financial instability.

American economists on both the right and the left have long advocated the subsidization of low-wage work as a means of social inclusion—offering an economic compact with everyone who embraces work, no matter their level of skill.
The Earned Income Tax Credit, begun in 1975 and expanded several times since then, does just that, and has been the country’s best anti-poverty program. Yet by and large, the EITC helps only families with children. In 2008, it provided a maximum credit of nearly $5,000 to families with two children, with the credit slowly phasing out for incomes above around $16,000 and disappearing altogether at roughly $39,000. The maximum credit for workers without children (or without custody of children) was only $438. We should at least moderately increase both the level of support offered to families by the EITC and the maximum income to which it applies. Perhaps more important,
we should offer much fuller support for workers without custody of children. That’s a matter of basic fairness. But it’s also a measure that would directly target some of the biggest budding social problems in the United States today. A stronger reward for work would encourage young, less skilled workers—men in particular—to develop solid, early connections to the workforce, improving their life prospects. And better financial footing for young, less skilled workers would increase their marriageability.

Finally, we should take steps to open the country’s most dynamic cities and affluent communities to more middle- and working-class Americans. The geographic segregation of society by income and education is unhealthy in any number of ways. Within dynamic major cities, we should loosen zoning requirements, allow taller buildings, and take other measures to promote greater density and more housing supply—a strategy that would promote growth as well as reduce the price premium on housing in these areas. Around them, we should improve public transit, to make faster, cheaper commutes available. And in affluent communities that are still being built out, we should seriously consider requiring the construction of some number of low-cost housing options, as contentious as that may be, to promote more class mixing, better economic opportunities, and better access to good schools.

A continued push for better schooling, the creation of clearer paths into careers for people who don’t immediately go to college, better access to affluent communities and dynamic cities, and stronger support for low-wage workers—together, these measures can help mitigate the economic cleavage of U.S. society, strengthening the middle. Combined with wage insurance and the recently passed health-care bill, which sought to make portable, continuous coverage available to everyone, these measures would help bring greater stability to most Americans in an otherwise unstable era. They would hardly solve all of society’s problems, but they would create the conditions for more predictable and comfortable lives—all harnessed to
continuing rewards for work and education. These, ultimately, are the most critical preconditions for middle-class life and a healthy society.

The panic of 1893, the crash of 1929, and the meltdown of 2008 all share a common antecedent: inequality, in the run-up to each of those disasters, was exceedingly high. Recent research has shown that this is a common pattern; highly unequal societies seem more vulnerable to financial crisis. The reasons are murky. Perhaps the middle class extends itself too much as it chases the status objects of the rich; perhaps spending by the rich on some goods, like housing, forces overspending by middle-class families who wish to live in dynamic city-regions or good school districts. Or perhaps too much money sloshing into elite investment accounts itself creates bubbles and busts (the rich save more of their money than the middle class, and invest more of those savings in high-risk instruments; when too much money is chasing limited investment opportunities, investing standards decline).

Up to a point, inequality creates incentives for education, hard work, and entrepreneurialism, and speeds economic growth. And at a more basic level, the ideal of “social justice” cuts both ways; people should of course be allowed to enjoy the fruits of their honest labor. As a society, we should be far more concerned about whether most Americans are getting ahead than about the size of the gains at the top.