Big business says only education can fix inequality. It’s just not sure what that means.

The U.S. Chamber of Commerce is not a fan of redistributive programs to deal with rising income inequality in the United States — they're like using band-aids to treat a disease, the business lobby's bigwigs said at their annual State of American Business shindig this morning.


Tom Donohue's message this morning. (U.S. Chamber of Commerce Facebook Page)

"Do you want to take the drug that might make you feel better, but might make your nose fall off?" asked Martin Regalia, the chamber's chief economist, arguing that extending unemployment benefits will just prolong the job search (despite manifold evidence to the contrary). To the extent that inequality is problematic — which Regalia disputed, saying the gap has come mostly from gains at the top rather than a decline in the fortunes of the poor — the stopgap fixes won't help. "Unemployment insurance is not likely to affect the distribution in a long-term way at all," he said. Same goes for raising the minimum wage, he added.

So what's to be done to address stubborn residual joblessness? Why, education and training, of course. Longtime chamber president Tom Donohue wondered, in his speech, why Americans weren't more upset about the state of their education system. "Where is the outrage? Where is the urgency?" he lamented. "Where is the political courage to really challenge the status quo in our educational establishment?"

One would think, given his assessment of the magnitude of the problem, that Donohue would have a detailed set of proposals for reform. But when reporters followed up in a news conference, asking what kinds of change he'd like to see, Donohue rambled vaguely.

"We paint our K-12 schools with the same brush. There are a lot of K-12 schools where our kids get great educations. The real question is, what are we going to do with that 30 percent, whatever the number, 40 percent that are disadvantaged?" he started out. "They lack equality of opportunity, because of those schools. And when you look at those schools, it's sort of like anything else we do, it's like any business. It's leadership, it's quality people, it's a clear set of objectives, it's a way of measuring what we're doing." 

It's certainly not a funding problem, Donohue added.

"We spend more money on education than we ever did and most anybody ever did, and we need to spend it smartly," he said (the first part of that isn't quite right — the U.S. has cut education spending in recent years). "I think charter schools bring something to the party. I think some standards — look, the Core standards don't tell you what you have to teach people, they tell you what people have to come out of school learning! And I think the 'how' is there, whether it was the Republican education department or whether it's Democrats, although the union issues are a little different. What we have to do is pretty clear."

What is the "how" though, if not more money? Donohue feels sure that some schools must be doing something right, and everybody else should just do that.

"What I'd like people to focus on is that this is not a black-and-white deal. We've got a lot of really good ones: Why don't we see what they're doing, and see if we can do it over here," he said, wrapping up. "And that brings you to a lot of social issues too." Indeed!

Whatever it is, it's not anything deep or systemic.

"If we can get everybody first mad, and then concerned about this, on a specific number, not on the whole system, that we can begin to make progress," Donohue finished.

The wandering answer stood in contrast to Donohue's demands on domestic energy production, trade, regulatory reform and changes to Obamacare. And it's not as if the chamber does nothing on education — it's pushed for the Common Core standards he mentioned, and put out a thoughtful report on how businesses can engage with school systems locally.

Everybody agrees that improving education is really important for economic competitiveness. But the generalized prescription of better training as a remedy for inequality isn't the whole answer. The question of whether skills are the sole source of the wage gap is in serious dispute — factors like de-unionization, the decline in the value of the minimum wage, globalization and deregulation of key industries are at play as well.

Most of those forces have been good for big business, though. And without laying out even a few bullet points of the chamber's education agenda, it's fair to ask whether Donohue's "training" mantra is more about deflecting attention from solutions that are hard for companies to stomach toward those that aren't their responsibility to deal with.

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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