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Education, salaire et qualité de vie, quelles relations ?

Oct 12, 2016 Adair Turner

LONDRES – L'idée que l'éducation et les compétences pour le plus grand nombre sont une condition indispensable pour augmenter la productivité, améliorer le niveau de vie et lutter contre les inégalités croissantes est universellement admise. Mais si on se trompait ?

En terme de croissance de la productivité, pour la plupart des économistes il est évident que le capital humain est aussi important que le capital physique. Dans une certaine mesure c'est tout à fait exact. Les économies modernes ne pourraient fonctionner sans une population bien éduquée, capable de lire, écrire et compter : beaucoup d'économies émergentes sont à la traîne en raison de compétences insuffisantes.

Mais le plus frappant est le petit nombre de gens qualifiés nécessaires pour assurer le fonctionnement des domaines clés de l'activité économique. La valeur de marché de Facebook est de 374 milliards de dollars, mais l'entreprise ne compte que 14 500 employés. Microsoft a une valeur de 400 milliards mais à peine 114 000 employés et GlaxoSmithKline est évaluée à plus de 100 milliards, et compte tout juste 96 000 employés.

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0 Comments on this paragraph, 20 Comments on this article

Paul Griesbach Dec 23, 2016

We have an exceptionally American mission from God to scientifically educate the economically superior beings of the future in order to run the cash registers more productively.
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michael bruce Nov 29, 2016

What this article really underlines is the need to look at the business context in which the development of learning/ education/training takes place. If as in the EU and the USA investment since the GFC, both by the State and consequentially by Business has been attenuated, then the demand for trained people is reduced in these economies. The anemic levels of aggregate demand is also driving the fall off in levels of productivity.
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Srijit Ghosh Nov 15, 2016

Adair Turner is right to point to the ability of our economy to reap larger gains from technological advances at lower costs. This makes automation very attractive and eliminates jobs at one level. On another level, it creates a disadvantageous situation for workers hoping to acquire higher skills to access higher paying jobs. While I understand Turner’s alarm when he looks at how companies like Facebook stay productive by employing a fraction of the larger workforce, I take comfort in recognizing two persisting trends: (a) that companies still want to rely on human beings to offer personal care-based goods or services, and (b) that many economies haven’t given up their booming service sector to automation. In India, for instance, BPOs need the human employees to run the personalized customer care platform. Lastly, emerging economies have not given up hope on SMEs that leverage human beings with very specialized knowledge and utility (also due to lower cost of labor and infrastructural inadequacies) to deliver goods and services (Ex: Dabbawallahs in Mumbai).
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Jan Babela Nov 14, 2016

"If more people become more highly skilled lawyers, legal cases may be fought more effectively and expensively on both sides, but with no net increase in human welfare." I think this is some misunderstanding of justice. Justice is not zero sum competition. If both sides have good lawyers, there is a better chance of fair result.
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Simon Very Nov 9, 2016

Okay, Facebook has on 14,500 employees, but why shouldn't there be market space for many companies like Facebook if the skills (plus of course the imagination/entrepreneurialism) existed to get them running? While most coders aren't going to reach a professional standard they could collaboratively produce cheap and cheerful open source applications that had uses relevant to user communities. MAYBE (and it is just a maybe), upskilling the population might lead to a post-capitalist economy based around makerspaces and sharing networks.
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Krishnan Madathil Nov 3, 2016

There was a time, not very long ago, when the majority of the world's population was illiterate. A special class of people called scribes (Brahmins in India, different terms elsewhere) were employed to do the reading work. They made insane monopoly profits of their skill at reading. Once reading became common, which happened not very long ago in much of the world, previous monopolies crashed.

Such is the case with coding as well. Most people today are code-illiterate; it is only a matter of time before people become code-literate. Now, what that means in an age of automation could potentially be epoch-making.

Large corporations, which hog so much limelight and devour our attention, and are the beacons of world economy, will cease to exist. Mr. Turner lives in the world where companies have to have at least 10,000 to add to human welfare. This will cease to be the case very soon. You will increasingly see smaller, more independent companies of lower headcount having as much impact and much more profitability from being able to scale up to MNC proportions at a fraction of the cost. Technology will catalyze this process.

May I refer to British PM May's forthcoming trip to India. It has been widely commented that it is a trip about getting SMEs to link across borders to the exclusion of people transfers. Well, for SMEs to interact today, there is Alibaba.

Mr. Turner's argument sounds much like a scribe who predicted the end of the world when Gutenberg came out with his printing press Bible.
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Rokon Zaman Oct 20, 2016

There is doubt that we have been progressing towards human free monopoly. Such progression has already started to create concern like Brexit or US election. But, what is the solution? Here is my analysis and views: http://techpolicyviews.blogspot.com/2016/10/time-for-coordinated-initiatives-to.html
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Rokon Zaman Oct 15, 2016

To protect jobs, should we slow down the technology progression? Or, to address the material need of growing human population, reaching to 9.7 billions by 2050, we should rather accelerate technology development to produce more with less inputs, while causing less harm to the environment. Here is my extended view: http://techpolicyviews.blogspot.com/2016/10/job-loss-for-technology-democratize.html
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S Kaleberg Oct 14, 2016

There are some good ideas and insights in this article. Education has been overrated as a solution to the real economic challenge of our times. If we solved the real problem of distribution and cross-subsidy, people would follow the opportunities and get the education that society they need and that society values.

One thing to consider is the importance of public goods like highways and Social Security benefits. Before the highways, only the railroads had real transportation options. The improved highway system let people own cars and travel, and this created all sorts of new businesses. Lowering the retirement age and increasing Social Security benefits, perhaps by raising effective corporate taxes to historical levels associated with higher growth than at present, we could generate new types of demand and the industries to meet them.
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Richard H. Serlin Oct 14, 2016

I think you really have to ask, what would it take with current technology to double a country's, or the world's, GDP. What are the bottlenecks with current technology? Raw materials? Very recyclable, if you have skilled people to run the recycling, because we don't lack the lower skilled. To me it looks like largely a matter of continuous returns to scale for a great deal, with recycling, or with just utilizing undeveloped raw materials. But what prevents this doubling of high tech production. The bottleneck appears to be high skilled people, engineers, managers, technicians,... Power can come from solar and nuclear, if you have the skilled people to greatly ramp up it's production.
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Richard H. Serlin Oct 14, 2016

"If more people become more highly skilled lawyers, legal cases may be fought more effectively and expensively on both sides, but with no net increase in human welfare."

But what if more people become physicians and nurses and dentists? In a reasonably well functioning economy, the price of health care should come down greatly, access and quality should go up. This can make a huge difference.

Globally, too, more educated and skilled people, even if your hypothesis is true, can work in developing countries very lacking in such people and greatly increase production there.

And there's much more you can say.
- Richard H. Serlin Oct 14, 2016
  
  And there's just a lot to this. developing country's clearly have insufficient high skilled workers, so if there at emore in developed countries they will have opportunities to create a lot of wealth in developing countries.
  
  There really is a lot to this issue.
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Avraam Dectis Oct 13, 2016

.
Regarding overt distribution, overt redistribution and inequality:

One possible approach is to push sub median wage earners toward the median with a "top up" program.

The general idea is for an additional sum to accrue to the sub median wage worker as a function of his current wages.

For example, suppose the median wage was 20 and the minimum wage was 8. A top up might consist of giving everyone sub median an additional 4 plus 50% of what they earn over the median.

The minimum wage worker would get 8 plus 4 per hour. The worker earning 14 would get 14 plus 4 plus 3 per hour.

The exact sums would have to be tuned for fairness but a top up would provide a good incentive to take the unattractive jobs as well as increase the likelihood of a civilized standard of living. It would also increase the supply of quality labor and make USA based employment more attractive.

Top up also addresses political concerns because only those working get topped up.

Funding the top up may be the biggest hurdle. I would suggest monetize it and restrain inflation through consumption taxes, as needed.

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Dan Thorn Oct 13, 2016

Well said,
obviously its not the only issue, these things are messy, but why quibble?
It's clear that in the conversation of inequality, education is nearly irrelevant - the 1% don't have any meaningful education advantage.
its also clear that productivity is poorly understood
Its also clear that education and work are often at cross-purposes. we aren't merely robots being programmed to be productive inputs into a corporate balance sheet, we also derive pleasure from education by enjoying a good book for pure entertainment and so on.
Best of all is bravely pointing out that "redistribution" is progress.
Yes it is, here's to more leisure for all!!
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Zsolt Hermann Oct 12, 2016

The article describes the great problem we are having.
We exist in a completely misguided human paradigm built on the belief that life is about producing and consuming goods, accumulating material, physical possessions.

As a result our present education system - that originates from the industrial revolution - is also solely focusing on creating production/consumption robots.

As the article states today most of production - of which the majority is obsolete, trying to "satisfy" overhyped, brainwashed "aggregate demand" that is fuelling constant quantitative growth -can be performed by robots.
And I would not be surprised if somehow people invented robots, systems that can also consume, generate profit somehow bypassing the need of actual human beings in this constant growth production/consumption cycle.

Then according to the logic of our present paradigm there would be no more use for masses of people, they only cause problems with their constant demands.
Thus if there are still leaders, experts out there interested in "real" education they would need to build one that creates real "human beings", creatures that know how to relate to each other, how to build the necessary mutually complementing relationships, collaboration without which people can't survive in a global, fully integrated world.

After all life, contentment, happiness solely depends on the quality of human interactions, on the quality of human inter-relations.
Above the normal, comfortable fulfilment of natural necessities all further consumption, accumulation of wealth only causes trouble.

Let us hope we still find people in decision making, executive positions who are interested in people, interested in human life because if there aren't any than the other option is that they try to find ways of reducing human population to the absolute necessary minimum.
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Petey Bee Oct 12, 2016

FB, MSFT, and GSK aren't the best examples to draw general conclusions from. They generate profits disproportional to their workforce due to monopoly-like advantages coming from branding, lock-in, and patent protection, respectively. I'm not arguing here against those things, just saying for now these examples are somewhat cherry picked.

Also its worth mentioning that the US issues approximately 2 million non-immigrant temporary worker visas a year (3.3MM /year when including spouses and children), many for their specialized skills. Presumably, by educating our population, this may be less necessary and/or current US residents may enjoy better bargaining power - which would relieve some of the political backlash we are experiencing.

Prominent categories for principals (i.e., not family members) are:
"H1B" (511K visas / year)
"TN" aka NAFTA professional workers (712K)
"L1" intracompany transferrees (835K)
"E1" treaty traders (422K) (mostly finance, I believe).

Numbers are from US Dept. Homeland Security, 2014 Yearbook of Immigration Statistics.
- Petey Bee Oct 12, 2016
  
  Ok it would be more appropriate to look at those numbers as roughly the scale of totals, rather than per-year's. Nevertheless the numbers are significant, especially compared to the number of "tech" jobs in the US, which is on the order of 10MM.
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- Petey Bee Oct 12, 2016
  
  Note- important correction, these figures are Admissions rather than Visas, so a person entering multiple times would be counted multiple times. For the latter categories, that will make a big difference.
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dan baur Oct 12, 2016

It's good that you recognize the education industry scam.

However, the labor problem you describe has happened in the past and was solved by a free labor market. People do find their place in society if allowed. And anyone that wants to work and needs money can find something to do in a free market.

Government "solution" has resulted in world wars that just killed the "excess" labor and destroyed economies to promote "rebuilding".

Government "overt redistribution" is bad all around. The better alternative is charitable donations.
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Fredric Bohm Oct 12, 2016

It is possible that increasing productivity may not be the highest form of human activity and that, in the end, chasing productivity and output are as delusional as transforming education into lists of skill sets and merely training people to do little tasks.
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