Do Free Trade Success and Manufacturing Education Go Hand in Hand?

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Global Trade

The US has had not one, but two huge policy developments come around this week. The US Senate voted Tuesday to pass the Currency Exchange Rate Oversight Act of 2011 (S. 1619) with 63 for and 35 against, much to the chagrin of a number of Republicans including John Boehner. (Subsequent action by the People’s Bank of China to depreciate the yuan further stoked the flames of a potential trade war, and could become a follow-up post in and of itself.) Then on Wednesday, the Senate and House both voted   to pass the South Korea free trade agreement which has spurred controversies of its own.

What stands at the core of this flurry of policy activity free trade spins off many thoughts, opinions and writings about how the US can compete in today’s global marketplace. Today, we’ll focus on just a tiny sliver of the issues surrounding free trade and economic advantage — how the country’s workforce and culture of education compares to others in Asia and Europe; namely, South Korea and Germany.

The New York Times ran a story about President Obama’s budding buddy-buddy relationship with South Korea’s president Lee Myung-bak a relationship that’s uncharacteristic of Obama, as he tries to keep his personal ties with leaders as cool as possible. While most of the article is a non-story about this “man-crush, as the paper puts it, it mentioned key differences between Koreans and Americans:

  • More South Koreans graduate from college than Americans
  • South Korean schools are hiring more and more teachers to satisfy parental demand; American teachers are increasingly being laid off to cut costs
  • 90 percent of South Korea’s population has access to a high-speed broadband network, compared to only 65 percent of Americans

While these differences seem largely anecdotal, they point to a different educational approach. In the EU’s largest exporter and richest country by GDP, educational approaches are also much different than in the US, especially regarding vocational and technical training. Germany has higher corporate taxes, higher numbers of unionized workforce, and more vacation days per worker, yet is able to pay its workers more and still have a $184 billion trade surplus (as of 2010). Marko Slusarczuk, an analyst at the Institute for Defense Analyses, recently expounded on a why that is, in a Manufacturing and Technology News article:

  • Germany splits its students into a two-track system as early as 4th grade; you’re either on the academic or vocational track (Berufsfachschulen), onto which two-thirds of students are placed, while less than 20 percent of American students choose vocational/technical programs
  • There’s no social stigma in Germany over pursuing the trades, while the opposite has become true in the US over the past several decades
  • Every German vocational student undergoes a rigorous apprenticeship program, while in the US, most apprenticeship programs require students to be at least 18, which does not ensure maximum participation, and the for-profit nature of many trade schools is at odds with how apprenticeships are run through companies

Slusarczuk’s point is that our future manufacturing base and subsequent success is dependent upon government setting an example for more effective education priorities. Instead of pushing students into four-year college programs, or a jobs (spending) bill, they must put more focus on reversing the mentality Americans have regarding education, especially if we want to compete with the likes of South Korea, Germany and others. If we keep entering faulty free trade agreements, the education and apprenticeships in those types of countries put our economic prosperity at a major disadvantage.

Education, vocational training and manufacturing should not, in other words, be mutually exclusive definitions.

–Taras Berezowsky

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