and local levels of government. Another 8 million workers in the private sector owed their jobs to government purchases of goods and services, from fighter bombers to janitorial services. And another 8.5 million private-sector workers held jobs that resulted from individual purchases financed from welfare, social security, and other transfer payments. Altogether, government spending in 1980 generated 34 percent of all civilian employment. Raising government spending, even at the expense of private spending, can actually increase employment. Government estimates show that a billion dollars spent by state and local governments generates 50,000 more jobs than a billion dollars spent by consumers. Altering the composition of government spending can also increase employment. Spending on health, education, and welfare produces more jobs per dollar than defense spending. Thus Reagan's increases in defense and consumer spending and his cuts in social welfare spending will create fewer, not more jobs. The employment generated by government spending has two other advantages. First, public sector jobs generally pay more than those in the private sector. The proportion of professional jobs in government is twice as large as it is in the private sector. The government employs one-third of all college graduates. Government purchases in the private sector benefit defense contractors and the construction industry where large numbers of professional and craft workers are employed. Government transfer payments are often used to purchase health and education services where many additional professionals are employed. Government spending in the private and public sectors of the economy -3 generated two of every five professional and managerial jobs in 1980 and half of all jobs held by college graduates. Second, government jobs provide a greater share of employment for women and minorities than jobs in the private sector. Government employment provides an even larger portion of the professional jobs for these groups. For instance, more than 50 percent of all professional jobs held by black women are in government. Transfer payments that support private service industries, such as hospitals and schools, also generate a greater share of jobs for women and minorities, Raising government spending would not only reduce unemployment, it would provide needed goods and services. Many of the nation's highways, bridges, and hospitals are in need of repair. According to Business Week, this erosion of the public infrastructure may undermine the capacity of private industry to maintain its current recovery. Public opinion surveys reported in Common Cause show that the majority of Americans support the many activities of government, from providing health care and social security to protecting the environment. While big government has the reputation for being inefficient and bureacratic, the American public and American business depend on the goods and services that government provides. Government policy that relies on the private sector for reducing unemployment condems millions of Americans to needless suffering. This strategy should be reconsidered. As economist Robert Heilbroner has said, "Unemployment is not a fact of nature. It is a defect of policy." Russell W. Rumberger is a Senior Research Associate at the Institute for Research on Educational Finance and Governance, Stanford University and coauthor (with Martin Carnoy and Derek Shearer) of A New Social Contract: The Economy and Government after Reagan (Harper & Row, 1983). IFG Institute for Research on Educational Finance and Governance SCHOOL OF EDUCATION STANFORD UNIVERSITY Project Report No. 83-A4 THE EDUCATIONAL IMPLICATIONS Henry. M. Levin Russell W. Rumberger February 1983 Henry M. Levin is Professor of Education and Affiliated Professor of Economics, and Director of the Institute for Research on Educational Finance and Governance, Stanford University. Russell Rumberger is a Research Associate with the Institute for Research on Educational Finance and Governance, Stanford University. The research for this report was supported by funds from the National Institute of Education (Grant No. OB-NIE-G-80-0111). The analysis and conclusions do not necessarily reflect the views or policies of this organization. INSTITUTE FOR RESEARCH ON EDUCATIONAL The Institute for Research on Educational Finance and Governance is a Research and Development Center of the National Institute of Education (NIE) and is authorized and funded under authority of Section 405 of the General Education Provisions Act as amended by Section 403 of the Education Amendments of 1976 (P.L, 94-482). The Institute is administered through the School of Education at Stanford University and is located in the Center for Educational Research at Stanford (CERAS). The research activity of the Institute is divided into the following program areas: Finance and Economics; Politics; Law; Organizations; and History. In addition, there are a number of other projects and programs in the finance and governance area that are sponsored by private foundations and government agencies which are outside of the special R&D Center relationship with NIE. Abstract Many business leaders, government officials, and educators believe that high technology will dominate America's economic future, will upgrade the skill requirements of future jobs, and will require a transformation of our educational system to meet these needs. Despite the popularity of these beliefs, available evidence contradicts them: the expansion of the lowest skilled jobs in the American economy will vastly outstrip the growth of high technology ones; and the proliferation of high technology industries and their products is far more likely to reduce the skill requirements of jobs in the U.S. economy than to upgrade them. Nonetheless, the educational system should strengthen the analytical and communicative skills of students, not because of the needs of high technology, but because such skills will help them deal with the changing political, economic, social, and cultural institutions they will face in their adult lives. Acknowledgment We would like to thank Joe Schneider and Sandra Kirkpatrick for their Comments on an earlier version of this paper, and Stephanie Evans for her secretarial assistance. |