Greenspan: colleges can help solve jobs dilemma

Black Issues in Higher Education, April 8, 2004

Federal Reserve Chairman Alan Greenspan told a congressional hearing last month that support for community colleges is an area where government investment in education has paid off. He said community colleges were likely to provide critical support to boosting job skills in the future as more and more workers see the need to upgrade their skills throughout their careers.

"As our economy exhibits increasing signals of recovery, job loss continues to diminish," he told the U.S. House of Representatives' Committee on Education and the Workforce. "In all likelihood, employment will begin to increase more quickly before long."

Greenspan said it was understandable that Americans felt a heightened job insecurity given the loss of more than 2 million jobs, and that even in the current recovery, job growth has been weak.

But Greenspan said the answer to the jobs dilemma was not to resort to raising trade barriers to keep foreign goods out of the country, because this would remove the pressure for U.S. companies to become more competitive and push America's standard of living lower.

"Time and again through our history, we have discovered that attempting merely to preserve the comfortable features of the present, rather than reaching for new levels of prosperity, is a sure path to stagnation," Greenspan said.

Greenspan did not name those who are pushing such trade barriers, but Sen. John Kerry, the expected Democratic presidential candidate, has attacked the Bush administration's free-trade policies and promised to review all trade proposals to make sure they contain protections for American workers.

The chairman said a "new round of protectionist steps" represented "alleged cures" which he said "would make matters worse rather than better."

Instead, Greenspan said the country should explore avenues to make sure that all Americans have a choice to get a good education and then be able to return to school to improve their job skills.

At some point, the problem of the pending retirement of 77 million baby boomers would have to be addressed, he said, and repeated his warning that Congress will have to trim future Social Security benefits.

--Associated Press