Same old, same old

There was a time where it was plausible to argue that more education and innovation were the primary solutions to our economic problems. But that time has passed. You cannot tell that, however, to the Wall Street Democrats and their Hamilton Project at the Brookings Institution.

They’re not ready to change just yet, even though most of the Democratic Party has. This shift was signaled by a recent report by the Center for American Progress (CAP) Commission on Inclusive Prosperity, which is co-chaired by Lawrence H. Summers, who served as Treasury secretary in the Clinton administration, and as chairman of the Council of Economic Advisers in President Barack Obama's first term. The report calls for full employment (a "high pressure economy," as Summers calls it), a more welcoming environment for collective bargaining, higher labor standards (overtime, minimum wage, earned sick and paid family leave), changes in corporate governance, and large scale public investment to address middle-class wage stagnation.

This puts Hillary Clinton in a bind, you might say. The Hamilton Project is the brainchild of her longtime adviser, Robert Rubin, who preceded Summers as President Bill Clinton's Treasury secretary, while CAP is closely associated with two other Hillary confidants, John Podesta and Neera Tanden.

This is pretty much the same analysis we heard from the Clinton administration 20 years ago
The new framing paper released by the Hamilton Project details how "advancing computer power and automation technology" creates a challenge for "how to educate more people for the jobs of the future, how to foster creation of high-paying jobs, and how to support those who struggle economically during the transition." This is pretty much the same analysis we heard from the Clinton administration 20 years ago, when the discussion was of a “transition to the new information economy." Let them eat education.

The education-only solution wasn’t appropriate when it was first put forward, and it is not even remotely plausible now given developments since the mid-1990s—and especially since 2000. Wages for the college-educated have been stagnant for the dozen years since 2000 (when the wage boom of the late 1990s receded). That stagnation has affected the bottom 70 percent of all college graduates both in the last recovery and throughout the Great Recession and the recovery from 2009 through 2014. Moreover, the college wage advantage has grown very little since the mid-1990s: This means that the continuously growing wage gap between high-wage and middle-wage workers since then has had very little to do with education wage gaps.