Presidential Candidate Advisors Say Climate, Skills Gap Top Issues
Image by Bruce Gilbert
No matter who winds up in the White House, energy policy, the rise of China and India, and the increasing skills gap between U.S. workers and the rest of the world are the top issues facing the next administration, according to professor Austan Goolsbee and Roger Altman, ’69.
“One could argue that climate change is the single biggest issue that the world as a whole shares other than terrorism,” said Altman, chairman, co-CEO, and cofounder of Evercore Partners in New York, and an advisor to presidential hopeful Hillary Clinton. Goolsbee, Robert P. Gwinn Professor of Economics, is an advisor to Barack Obama. The two spoke to more than 100 alumni and friends of Chicago Booth in New York City in October at an event sponsored by the Initiative on Global Markets.
Goolsbee agreed that energy policy would be a hot issue in coming years. “We’re likely, in the near future, to have a price associated with carbon emissions, and we’re going to have to deal with the cost this imposes on the economy,” he said. “There are a lot of coal-fired power plants in the U.S., China, and India, and we’re going to have to come to terms with that issue.”
China and India will be tremendous growth engines, Altman said, and it’s likely that the United States will not be the world’s largest economy indefinitely.
“Even if China becomes the world’s largest economy in 20 to 25 years, it wouldn’t be anywhere near the wealthiest country at the time. Its per capita income would be a quarter of ours, but given its 1.5 billion people, its GDP would be larger,” Altman said.
Goolsbee said, “Our goal is to remain a rich country, to have a high standard of living. To do that, we need to invest in skills, have high productivity, be well-managed, and have savings and investment.”
The Skills Gap
Goolsbee and Altman agreed the United States needs to confront the increasing skills gap of its workforce relative to the rest of the world.
“The income gap between college-educated Americans and those with high school or lesser education is widening very fast, so the premium on skills and education driven by globalization and technology is getting larger and larger,” Altman said. “As a nation, we’re going to have to do a better job of getting our college completion rates up.”
Goolsbee said U.S. college attendance has stagnated. “It’s not that we’ve gotten worse, but everyone else has invested massively in education. In college education, we rank 32nd, and America is not ready for a world where we’re the 32nd highest- paid place.”
It’s a change from the America most people are familiar with, he said. “For 100 years, kids were about twice as rich as their parents were—standards of living doubled about once a generation,” Goolsbee said. “But recently, median family incomes have been stagnant, and high costs of energy, education, and health care have seriously cut into them. At current rates, if you take the growth rate for the last five years, that’s no longer the case. Incomes have grown very little, and education and health care costs have gone up. At current rates it could take up to 1,000 years before median income doubles again.”