Jamie Dimon, the CEO of banking giant JP Morgan Chase, says that raising wages and closing the skills gap are the two most promising paths to a brighter economic future. Dimon has long advocated for raising the minimum wage. Lately, he’s also become a fan of community colleges. In his annual musing to bank shareholders, Dimon calls the American Dream “frayed”. He notes that eight out of ten people have had to hit up their savings to cover recent inflationary costs.
It’s both odd and refreshing to see a bank president acknowledge that the problem lies in the enormous wealth gap that Americans have accumulated in recent decades. And that the simplest solutions are just to pay workers better and to provide them with better training.
What Dimon doesn’t appreciate is that part of the wealth gap comes from businesses that believe they have no particular role in preparing the workforce they’re looking for. They are perfectly comfortable being the beneficiaries of everyone else’s investments.
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This approach is nothing less than corporate welfare. Business owners decry public assistance as generous handouts to the undeserving, but fail to recognize that their wealth is, in part, the product of unrelenting (and unreimbursed) public investment in the development of their workforce.
Dimon is also a proponent of skill-based hiring. That is, hiring people for the skills they possess, rather than the degrees they’ve earned. One would hope that there is some overlap among those who have earned degrees. But Dimon says it’s time to recognize workers who have skills they’ve acquired through other means – like self-teaching, experiential learning, and even at community colleges. (I get the impression that when Dimon says “degrees” he’s referring to bachelor’s degrees or better.)
Community colleges are at a crossroads
The impact of the wealth gap is most apparent among the people who have found themselves on the short end of the stick. A four-year degree is certainly a pathway to the middle class, but it is painfully expensive. For prospective students who lack the means to pay for four years of tuition and all the other ancillary costs of attendance, entering the workforce directly may be just as financially lucrative as attending a community college.
For those students who may consider a community college, the post-graduation earnings don’t make a very compelling case for attendance. That’s the long and short of it. If the goal is to increase enrollment, community colleges must differentiate their outcomes from those a person can experience by directly entering the workforce. That means developing programs that lead to high-wage, high-demand, skill-intensive jobs. And it will help achieve the wealth transfer that Dimon believes is necessary. If community college administrators cannot or will not address this critical failing of the institutions they lead, then American community colleges will be relegated to the ash heap of history.
Photo Credit: Jennifer Boyer, via Flickr
