Trans-Pacific Partnership Necessitates Education Reform
Feb 8, 2016
On Thursday, the Trans-Pacific Partnership was officially signed by 14 countries, including the United States. The TPP is set to be one of the largest free trade agreements in the history of the world, reducing over 1,800 different trade restrictions and tariffs in economies all around the Pacific. But with any radical change comes great resistance. Politicians and activist groups within the United States have called the TPP a threat to the economy, claiming that it would ship U.S. jobs abroad and impair economic growth.
Economists are virtually all in agreement that free trade is, on the abstract whole, a good thing. It leverages what is known as comparative advantage between nations — the relatively basic idea that some nations are more efficient at producing certain goods and services than others. The United States, which has led the world in technology and high-skill manufacturing, has a lot to gain in this regard. And by reducing restrictions and tariffs on U.S. exports, the TPP is set to give these industries an even greater boost.
But a natural and necessary consequence of comparative advantage is that other nations will specialize too. In particular, developing nations — where average worker productivity is lower and technology not nearly as robust — should see growth in low-skill manufacturing jobs in order to match growing U.S. high-skill exports.
Here is where the anxiety comes from. Free trade means specialization, and specialization means that U.S. low-skill manufacturing will shrink. On the whole, the U.S. economy will benefit, but the grand economic restructuring threatens to leave employees in low-skill sectors behind. That does not mean there will be a shortage of jobs. Quite the contrary: technology, advanced manufacturing and services require a lot of labor and growth in these sectors means many more opportunities for jobs — often with higher average pay to boot.
Rather, the problem lies in education. Workers in shrinking sectors will need a great deal of education and retraining in order to meet growing demand for skilled labor, but an education system that has become increasingly unaffordable for average citizens — that has marginalized and stigmatized later-adult education — prevents workers from adapting to and reaping benefits from the new economy.
Rather than sticking to a cumbersome protectionist model that preserves inefficient jobs at the expense of greater growth, politicians need to recognize the radical new possibilities that a specialized economy will bring. Greater state and federal funding for vocational training and university will not only allow workers to adapt to the new economy, but also break through the stratified economic system that has impaired educational achievement for decades. There is no use obstinately sticking to an outdated economic structure — instead, the United States needs to recognize the TPP as an opportunity to take control, innovate and provide the opportunity that so many Americans deserve.
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A version of this article appeared in the Monday, Feb. 8 print edition. Email Richard Shu at [email protected]