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Manufacturing is still critical to the economy United States. Clyde Prestowitz, says it's time to start realizing the positive spillovers that manufacturing creates... Read more  

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Stephen Olson at Chinese Development Institute Conference

 

 Clyde Prestowitz giving presentation to CDI...

 

Steve Olson teaching trade negotiations at the Mekong Institute...

 

Stephen Olson to speak at upcoming workshop organized by the International Institute for Trade and Development on 

"Economics of GMS Agricultural trade in goods and services towards the world market"

Chiangmai, Thailand Sep 8-12.

(06/30/05) Clyde Prestowitz quoted in the Detroit Free Press

(06/30/05) Clyde Prestowitz quoted in the Detroit Free Press
ANOTHER POINT OF VIEW: Jobs: Education isn't only key
Detroit Free Press (MI)
Copyright 2005 Detroit Free Press
June 30, 2005


ANOTHER POINT OF VIEW: Jobs: Education isn't only key
BY PETER SCHRAG

Except for those immediately affected, last week's news that IBM was laying off 13,000 workers in this country and Western Europe, and creating 14,000 jobs in India, was just one more economic blip.

Except for those immediately affected, last week's news that IBM was laying off 13,000 workers in this country and Western Europe, and creating 14,000 jobs in India, was just one more economic blip.

By now the offshoring of yet another chunk of high-tech jobs to low-wage markets overseas is hardly news. But each instance raises more questions about the sufficiency of the conventional wisdom: that the only way to keep the U.S. economy healthy is higher levels of education and training.

Consider what David Lyon, president of the Public Policy Institute of California, said last month in a forecast on California's future: "Providing sufficient human capital, rather than more physical capital, could well be California's biggest challenge in the year 2025 and beyond."

California grew great in part because of its first-class higher education system. The universities provided high-quality research and education for millions of Californians. None of that's changed. The argument for educational opportunity and high quality universities is more relevant than ever. But in the face of the global economy and the nation's deficit-ridden economy, better education for the young and retraining of laid-off workers alone simply aren't enough, no matter how often President George W. Bush and others pretend otherwise.

When the loss was merely manufacturing jobs, economists and business leaders could dismiss the loss by arguing that it left the U.S. economy free to "to do the high-value-added, sophisticated services and high-tech development," said Clyde Prestowitz, president of the Economic Strategy Institute and a trade negotiator in the Reagan administration.

But now it's clear that Indian and Chinese engineers and software developers are perfectly capable of doing many of those jobs as well, and doing them at a fifth of the wages that their U.S. counterparts earn, or used to earn. Even if jobs are not moved, "the threat of movement will operate to keep salaries low," Prestowitz explained.

It's understandable that few people want to challenge the education-is-all wisdom. For the left, it would undercut the case for more school and university funding. For the right, it would reinforce the argument that other reforms are needed if the United States is not to turn permanently into a stratified two-class society.

Among those reforms:

Develop a national energy policy, including higher gas taxes, to spur efficiency and sharply reduce dependence on imported oil and gas.

Restore the estate tax and other levies on high incomes to reduce public borrowing and support improved funding for children's and other social services.

Stop insisting that schools can solve all our economic problems.

Education is a necessary element of a successful high-tech economy; it's emphatically necessary to help reduce social inequities. But it's not enough in a high-tech global market where many jobs can be sent overseas at the click of a mouse.

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