The Upswing: How America Came Together a Century Ago and How We Can Do It Again

by Robert D. Putnam

The twin pauses in high school and college growth in the 1970s, clearly visible in Figures 2.6 and 2.7, halted the long, steady increase in the supply of skilled workers. At the same time, what economists call “skill-biased technological change” (or SBTC) began to increase the relative demand for ever more highly skilled workers. High school education was fine for the assembly lines that dominated economic growth from the 1920s to the 1970s, but it was inadequate for the high-tech labs that replaced those assembly lines in the last decades of the twentieth century. Most economists agree that technological change has been an important contributor to the recent growth of inequality. Nevertheless, if the educational push that had begun in the Progressive Era had been renewed and accelerated after the 1970s, the magic combination of growth and equality might well have continued. But instead we Americans collectively took our feet off the educational accelerator in the 1970s and began to coast. Almost immediately, the long, gradual upward trend in equality was reversed, as we saw in Figure 2.8. In broad outline, this is probably now the single most widely accepted explanation for the Great Convergence and Great Divergence.70 However, it works much less well in explaining the waning and waxing gap between the top 1 percent and the rest of the American labor force, especially the explosive widening of that gap in recent years.