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Wednesday, July 14, 2004 - Page updated at 12:00 AM

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Bruce Ramsey / Times editorial columnist

A highly educated workforce ... is not really necessary

Consider this statement, from an initiative that will be on our November ballot:

"To compete successfully in the 21st century economy, Washington's citizens must be equipped with the best education and skills in the nation."

Could anyone doubt that the best education for the public leads to economic success? William W. Lewis doubts it. "The importance of the education of the workforce has been taken way too far," he writes in his new book, "The Power of Productivity" (University of Chicago Press, $28).

Lewis is not a proponent of ignorance. He has a Ph.D. from Oxford in theoretical physics. His son is a cardiologist and his daughter a lawyer. He does not deny the well-known correlation between individual education and income, in which schooling opens the door to elite jobs. What he denies is the importance of ever-more doses of schooling to the job performance of the average American.

Lewis, now retired, was a partner for 20 years at McKinsey & Co., worldwide management consultants, and founder of the McKinsey Global Institute. His book interprets a McKinsey study that took a dozen years. The study asked why rich countries were rich and poor countries poor. The question had been asked many times. The unusual thing was the study's method, which concentrated on individual businesses. The McKinsey team would compare an Indian bank to a Brazilian bank, or a Russian homebuilder to a Japanese homebuilder.

Right away, one thing was obvious. The key to relative wages is output per worker — and not just manufacturing workers. Japan, for example, beats America in the productivity of steel and auto workers, but America beats Japan in retailing, wholesaling, food processing and services. Japan has Toyota and Nippon Steel; America has Wal-Mart, Costco, Office Max and Tyson Foods. We are more productive than Japan in most of the things an economy does, and therefore have a higher living standard.

Each "world-class" industry has particular advantages. Retailing has big-box stores, which spread faster in America because zoning allowed them and Americans pushed them. Homebuilding has the subdivision, which allows houses to be built on a production line. Homebuilding also has the mortgage, which is taken for granted here but doesn't exist in India or Russia.

Americans have many advantages, but what we do not have is a country in which students spend more time in school and pay more attention to the teacher. The American level of book learning is none too good. All during the time of the study, Lewis writes, "U.S. managers complained regularly about the inability to hire workers who could read, write and do arithmetic." And yet, he writes, "In sector after sector, the U.S. workforce achieved higher labor productivity than anyplace else on earth."

Americans mostly learn their skills on the job. But anyone may do that. One of Lewis's studies was of apartment builders of Houston, who employ barely educated workers from rural Mexico. Their productivity, he writes, is "world-class."

Why in America?

Our edge, Lewis says, is competition. We open our doors to both the carrot and the stick. Here innovators can offer new things. They can also push rivals to the wall. People like to talk about the carrot — economists call it "incentive" and egalitarians call it "greed" — but in Lewis's view the stick does most of the work. That is because a carrot alone may be ignored, and often is. Not so the stick. Those who ignore the stick end up like Ernst Home Centers.

What of education? I called Lewis and asked him. He allowed that education is important to train people for certain high-knowledge jobs like the one he had.

But he said, "The promoters of education, many of them educators, have overstated their case." Economic development is the modern mantra, and they have tried to tie education to it. "It is an easier argument," he said.

The better reason for mass education is to pass on a culture. But we ill-educated Americans have a tin ear for academic-sounding arguments like that, and the promoters of education want to make a sale.

Bruce Ramsey's column appears regularly on editorial pages of The Times. His e-mail address is bramsey@seattletimes.com

Copyright © 2004 The Seattle Times Company

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