Posts Tagged ‘higher education’

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Special mention

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Back in 2011, thousands of Chilean students participated in protests against the high cost of higher education. The most famous took place in front of La Moneda, the president’s palace, dancing to Michael Jackson’s “Thriller.”

According to the latest statistics from the OECD report, “Education at a Glance 2017,” the costs of a college education in Chile were still very high in 2015-16.

But they’re still not as high as in the United States, where it costs more to go to college than anywhere else in the world.

Of the 35 member countries in the OECD, the United States has the highest average tuition at both public and private colleges, for Bachelor’s as well as Master’s degrees.

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Average public tuition in the United States for a Bachelor’s degree is $8,202 annually, compared to Chile’s $7,654, the country with the second-highest tuition cost.

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In terms of private education, the comparison is not even close: average tuition in the United States for a Bachelor’s degree is $21,189, far higher than in Australia, where the price is $8,827.

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The United States also has the distinction of having the most expensive Master’s degree programs—again, in both public and private institutions.

It’s enough to turn U.S. college students into heavily indebted, protesting zombies.

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The 2017 Social Progress Index is out and according to Michael Green [ht: ja], the CEO of SPI, the United States is “flatlining,”

primarily due to its falling scores on measures of tolerance and inclusion. . .

Green said that in order for under-performing countries like the US to improve their scores in 2018 and 2019, they’ll need to embrace long-term investments in protecting people’s rights.

“The US is not under-performing because of the Trump administration or the Obama administration,” he said. “It’s about the story of long-term under-investment in the justice system, in the education system, in healthcare. Those are the real challenges.”

Overall, the United States ranks 18th out of 128 nations.

The only area in which the United States outperforms other nations of similar wealth is higher education, with a large number of colleges and universities. But that doesn’t include cost and thus accessibility, which is reflected in a low score on inequality in the attainment of higher education.

And then there are all the other categories in which the United States comes up short in comparison to the rest of the world: nutrition and basic medical care (36th), water and sanitation (27th), homicides (70th), access to information and communications (27th), environmental quality (33rd), political rights (32nd), freedom over life choices (65th), and discrimination and violence against minorities (39th).

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That’s why the overall U.S. score is only 86.43, which puts it behind many other high-income nations: Denmark, Finland, Iceland, Norway, Switzerland, Canada, Netherlands, Sweden, Australia, New Zealand, Ireland, United Kingdom, Germany, Austria, Belgium, Spain, and Japan.

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The authors of the report note that, while social progress generally improves as national income rises, there’s no one-to-one correspondence between them. Thus, the United States underperforms on the Social Progress Index compared to its per capita national income.

What is clear, from the sample of countries in the chart above, is the United States has a much more unequal distribution of income compared to countries that rank higher in the SPI.

That’s one of the real reasons why, independent of Trump and Obama, the United States is flatlining when it comes to social progress.

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Funding for public higher education has been decreasing in recent decades and, as schools rely increasingly on tuition for revenue, student debt has been rising.

That much is pretty well known. What is less a matter of public knowledge and debate is the link between growing racial and ethnic diversity and the decline in funding. I, for one, hadn’t considered it before. I knew the cuts in higher education hurt working-class Americans but I hadn’t thought about those cuts in relation to the increase in minority populations.

Until I read the article by Scott Carlson [ht: mfa], in the Chronicle of Higher Education [ht: mfa], who explores the issue in some depth. Carlson looks back at the history of public higher education (including the GI bill and the Reagan-era cuts in Pell Grants), the dog-whistle politics that have limited access for minority- and first-generation students (beginning when Ronald Reagan was governor of California and continuing with William J. Bennett, President Reagan’s secretary of education), and the undermining of the idea of public colleges and universities as an affordable way for working-class youth—white, black, and brown—to obtain a high-quality postsecondary education.

Since Carlson’s article will soon be out of reach behind a paywall, I want to quote at length his discussion of what has been happening in Arizona:

If the federal government doesn’t expand access to education, more of that burden will fall on states. In many of them, individuals and families now pay for a greater share of college costs than taxpayers do. Some places, like Arizona, have been going the way of California years ago.

Arizona’s legislature is whiter, more male, and more Republican than its population. And lately, that state — which has a clause in its constitution proclaiming that higher education “shall be as nearly free as possible” — has passed deep cuts in funding and big increases in tuition.

One of the leaders of that drive is John Kavanagh, a Republican state representative and community-college professor who has made headlines for his anti-immigration stance and remarks about Hispanics and Muslims. In an interview with The Chronicle, he was more measured, saying that the state has had to raise tuition to close a budget gap.

In 2012, he sponsored a bill that would require all students, regardless of income, to pay at least $2,000 toward tuition, in part to ease the burden on middle- and upper-middle-income students. He believes students should have “some skin in the game,” and bristles at the notion of poor students’ paying less, thanks to tuition revenue that gets redistributed as aid.

“I don’t think it’s a good policy to take money from one student to pay for another student’s tuition,” he said. “There is no reason that even a poor student can’t pay a nominal tuition, given that they are going to earn a lot more money than people who don’t have college degrees.”

But Alfredo Gutierrez, president of Maricopa Community College’s governing board and a former Democratic state senator, doesn’t buy the straight argument against subsidies. The state has been extraordinarily hostile to education, he says, a pattern he believes is tied to race. State funding for the Maricopa system had been going down since 2009, he says, until it got none last year. Half of Maricopa’s students are nonwhite.

“The deterioration to the K-12 system, the community-college system, and the universities will ultimately have to be paid for,” Mr. Gutierrez says. “If this trajectory that we are on continues, this will be an extraordinarily ignorant, uneducated state — certainly not a place that can deal with the economy of the future. And it will create a permanent underclass. There will be little ability to escape poverty.”

But Arizona, he predicts, is on the cusp of change. The Latino population is growing so fast that in six to 10 years, Arizona could flip over politically, possibly taking the state in a different direction, one that is more willing to invest in the education of immigrants and minority groups.

“Perhaps we have lost a generation,” he says, “but there is still a real opportunity to make a change.”

But Arizona is not alone. The deterioration of public education at all levels has been occurring across the country and, like much that has been happening in the United States in recent decades, it represents an attack on those least able to shoulder its effects: the children of the working-class, in all their racial and ethnic diversity.

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Special mention

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We’ve been learning a great deal about the conditions and consequences of the obscene levels of inequality in the United States—now, in the past, and it seems for the foreseeable future.

Right now, inequality is escalating within public higher education, especially in research universities that are chasing both tuition revenues and rankings. Thus, the editorial board of the Badger Herald, the student newspaper at the University of Wisconsin, found it necessary to criticize the lifting of the out-of-state student enrollment cap because it betrays the Wisconsin Idea and is making the university both “richer and whiter.”

Instead of increasing enrollment by targeting low-income and underrepresented Wisconsin students, UW now joins the ranks of public institutions that are happy with increasing the — already substantial — socioeconomic divide on campus. Making UW a bougie playground for the greater Chicagoland area is not the way to keep Wisconsin a world-class institution.

The Wisconsin students are right.* As recent research by Ozan Jaquette, Bradley R. Curs, and Julie R. Posselt confirms, public research universities are increasingly relying on tuition increases to fund their activities.** Thus, they are admitting more nonresident students—both for their out-of-state tuition payments and to raise the universities’ academic profile—and, as a result, the proportion of historically underrepresented students and especially of low-income students is declining. Moreover,

The shift towards nonresident students suggests that public research universities have increased the value they place on students who pay high tuition and have high test scores. This shift is indicative of a deeper change in organizational values, away from the public good emphasis on access and towards the self-interested emphases of academic profile and revenue generation. As scholars, campus leaders, or policymakers, we must ask ourselves, whether these are the values we want our flagship public institutions to promote?

We also need to look at the way inequality played out in American history, and make the appropriate connections to the present and future. In a recent paper, Suresh Naidu and Noam Yuchtman examine the situation of labor markets during the first Gilded Age. Their argument, in a nutshell, is that labor markets in the late-nineteenth and early-twentieth centuries are as close as we have seen in U.S. history to the unregulated labor market that is presumed and celebrated within neoclassical economics. But, the authors explain, those Gilded-Age labor markets were characterized by high levels of conflict—between labor movements and employer organizations (over wages and, when workers went on strike, replacement workers or scabs)—which, in turn, called on increased levels of judicial intervention as well as domestic policing and military intervention, generally on the side of the employers.***

And the implications for the United States, in the second Gilded Age:

Looking around today, it is obvious that inequality and conflict over the distribution of wealth and income remain salient a century after the first Gilded Age. History is never a perfect guide, but the late 19th century suggests that even as markets play a greater role in allocating labour, legal and political institutions will continue to shape bargaining power between firms and workers, and thus the division of rents within the firm. What remains to be determined – and battled over – is which institutions are empowered to act, and whose interests they will represent. Regardless, latent labour market conflict seems likely to be a prominent feature of our new Gilded Age.

Finally, what can we way about inequality looking forward? According to Robert Shiller, it “could become a nightmare in the decades ahead.”

The reason for this dire prognosis is that the structures that create high levels of inequality in the first place serve as barriers to policies that might actually lessen the amount of inequality. According to Angus Deaton, “Those who are doing well will organize to protect what they have, including in ways that benefit them at the expense of the majority.” Historically, the only exceptions in capitalist democracies emerge in times of war, “because war mobilization changed beliefs about tax fairness.”

And contra Robert Solow (“We are not good at large-scale redistribution of income”), capitalist societies have consistently shown to be very good at large-scale redistribution of income toward the top—just not particularly interested in moving in the opposite direction, in redistributing income to those at the bottom.

In fact, neither Shiller nor the nine other economists who contributed to a recent project on long-term forecasting “expressed optimism that inequality would be corrected in the future, and none of us ventured that any major economic policy was likely to counteract recent trends.”****

Shiller uses Satyajit Ray’s 1973 movie “Distant Thunder”—about the Bengal famine of 1942-43, when millions died, almost all from the lower classes—to illustrate our current dilemma. There was plenty of food in the Bengal Province of British India to keep everyone alive but “the food was not shared adequately.”*****

Systems of privilege and entitlement permitted hoarding of food by people of status whose lives went on much as usual, except that they had to brush off starving beggars and would occasionally see dead bodies on the street.

It’s clear that, today, there are plenty of goods—food, clothing, and shelter—to go around but they’re not being shared equally. Not by a long shot. The problem is, existing “systems of privilege and entitlement” permit the accumulation of wealth on one end and misery on the end—just as they did during the first Gilded Age and, unless things change, will continue to do so for the foreseeable future.

Meanwhile, the lives of people of status go on much as usual, in their “bougie playground”—except they have to brush off the contemporary equivalent of starving beggars and occasionally see the analogy today of dead bodies on the street.

 

*It should perhaps come as no surprise that a prominent mainstream economist, Rebecca Blank, Chancellor of the University of Wisconsin-Madison since 2013, is the one who sought (and won) an end to the cap on out-of-state and international students.

**As Stephanie Saul reports,

According to the College Board, the average cost of attending a four-year public university, including room and board, increased from $11,655 in 2000 to $19,548 in 2015, in inflation-adjusted dollars. In the City University of New York system, tuition at four-year colleges is now $6,330, having increased by $300 each year since 2011, when it was $4,830. . .

“What Sanders figured out — it’s not the $65,000 cost of attendance at some of our pricier privates driving the debt bubble, but rather the disinvestment and privatization of public higher ed,” said Barmak Nassirian, the director of federal relations and policy analysis for the American Association of State Colleges and Universities.

***This is one of the examples I use in my graduate-level course on the Political Economy of War and Peace—that the United States has its own history of intrastate wars (which, like many such wars in recent times, have been class wars) and that, as the authors explain, “military and law enforcement institutions of the United States, in particular the Army, the National Guard, and the FBI, can trace their origins to the federal troops, state militias, and private Pinkertons deployed in 19th century labor conflicts.”

****The key point Shiller does not address is the role mainstream economics has played both in creating the current levels of inequality and in creating barriers to imagining and enacting policies and strategies for doing away with the grotesque levels of inequality we are witnessing today.

*****Amartya Sen famously argued that democracy prevents famines. That may be true. But it doesn’t prevent hunger or the other economic and social catastrophes that stem from the high levels of inequality we’ve witnessed during the first and second Gilded Ages in the United States.

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The existence of public colleges and universities is the way the American working-class has traditionally been able to achieve a higher education and broaden their individual and social worlds. It started with the land-grant universities and then expanded, especially in the 1960s, with enormous increases in facilities, professors, and public financing. The children of U.S. workers were thus able to enroll in state institutions that, in many cases, provided them a high-quality, affordable education.

As we all know (and, if we didn’t, Bernie Sanders has been quick to remind us), that is no longer the case. The decrease in state funding for public colleges and universities, which has led them to increase tuition and fees and to chase out-of-state (and, increasingly, out-of-country) students, together with stagnant incomes for the majority of the population, has made public education less and less affordable for many workers and their children. The result is that many students have been forced to choose lower-quality schools (including for-profit colleges and universities), extend their time in school (because they have to hold one or more jobs while going to school), and take on more and more debt (both student debt, to finance their education, and consumer debt, to make other purchases).

In creating the chart above, I calculated the cost of public four-year colleges and universities (as reported by the College Board) as a percentage of the average income of the bottom 90 percent of Americans (from the World Wealth and Income Database). Thus, for example, in 1975-76, annual tuition and fees amounted to about 7 percent of 90-percent incomes; adding room and board increased that figure to 24 percent. Now, tuition and fees alone are 28 percent and the total cost (including room and board) is up to 59 percent.

In other words, right now, it costs the American working-class almost 60 percent of one year’s income to pay for one of their children to attend one year in a public four-year college or university.

What’s the American working-class to do? The same as in many other rich countries: demand free higher education for all high-school graduates who want to attend an in-state public college or university (and, while they’re at it, forgiveness for the student debts they’ve been forced to take on in order to attend increasingly out-of-reach public colleges and universities).

Fast Food Workers Protest For Increased Wages Ahead Of McDonald's Annual Shareholder Meeting

One week ago, the McDonald’s Corporation reported a 35-percent increase in profits (from $811.5 million in the period last year to $1.1 billion) in the quarter that ended 31 March. A few days later, former McDonald’s President and CEO Ed Rensi published an opinion piece in Forbes to explain why raising the minimum wage would be a huge mistake.

Let’s do the math: A typical franchisee sells about $2.6 million worth of burgers, fries, shakes and Happy Meals each year, leaving them with $156,000 in profit. If that franchisee has 15 part-time employees on staff earning minimum wage, a $15 hourly pay requirement eats up three-quarters of their profitability. (In reality, the costs will be much higher, as the company will have to fund raises further up the pay scale.) For some locations, a $15 minimum wage wipes out their entire profit.

Recouping those costs isn’t as simple as raising prices. If it were easy to add big price increases to a meal, it would have already been done without a wage hike to trigger it. In the real world, our industry customers are notoriously sensitive to price increases. (If you’re a McDonald’s regular, there’s a reason you gravitate towards an extra-value meal or the dollar menu.) Instead, franchisees can absorb the cost with a change that customers don’t mind: The substitution of a self-service computer kiosk for a a full-service employee.

What Rensi doesn’t mention is that U.S. taxpayers are subsidizing McDonald’s profits.

As Ken Jacobs reports,

Workers like Terrence Wise, a 35-year-old father who works part-time at McDonald’s and Burger King in Kansas City, Mo., and his fiancée Myosha Johnson, a home care worker, are among millions of families in the U.S. who work an average of 38 hours per week but still rely on public assistance. Wise is paid $8.50 an hour at his McDonald’s job and $9 an hour at Burger King. Johnson is paid just above $10 an hour, even after a decade in her field. Wise and Johnson together rely on $240 a month in food stamps to feed their three kids, a cost borne by taxpayers.

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In fact, according to a study by Jacobs, Ian Perry, and Jenifer MacGillvary (pdf) for the UC Berkeley Labor Center, 52 percent of fast-food workers make so little that they’re are on some form of public assistance.*

That’s the social cost of McDonald’s (and other fast-food corporations’) private profits.

 

*Note also in the chart above the following observation about nominally non-profit higher education in the United States: “high reliance on public assistance programs among workers isn’t found only in service occupations. Fully one-quarter of part-time college faculty and their families are enrolled in at least one of the public assistance programs analyzed in this report.”

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One of the consequences of Bernie Sanders’s campaign for president is that economists and economic ideas that are often overlooked or marginalized are making the news.

Consider, for example, Gerald Friedman [ht: ja], a University of Massachusetts Amherst economics professor.* He’s front-page news on CNN, and that’s because he has provided “the first comprehensive look at the impact of all of Sanders’ spending and tax proposals”—including spending on infrastructure and youth employment, increasing Social Security benefits, making college free, expanding health care and family leave, raising the minimum wage, and shifting income from the rich to the working-class through tax hikes on the wealthy and corporations.

“Like the New Deal of the 1930s, Senator Sanders’ program is designed to do more than merely increase economic activity,” Friedman writes. It will “promote a more just prosperity, broadly-based with a narrowing of economy inequality.”

Emmanuel Saez, Professor of Economics at the University of California, Berkeley, is also in the news, because of his research on tax rates. In a 2011 paper he wrote with Peter Diamond, Saez argued that, in order to achieve a fair distribution of the tax burden in the midst of rising inequality, very high earners should be subject to high and rising marginal tax rates on earnings. While the top income marginal tax rate on earnings today is about 42.5 percent, they estimate the optimal top tax rate (which would maximize tax revenue from top-bracket taxpayers) to be 73 percent, even higher than Sanders is currently proposing.

“My feel is that the reasoning behind Sanders’s tax plan is not so much tax revenue generation from top earners but rather make top tax rates so high so as to discourage ‘greed,’ defined broadly as extracting income at the expense of the rest of the economy as opposed to real productive behavior,” Mr. Saez wrote in an email. “I think pretax top incomes would finally start to decline.”

Friedman and Saez are economists who are never cited in the mainstream media. But their ideas are now receiving a public airing precisely because of Sanders’s extraordinary success in the current campaign.

 

*Here’s the appropriate disclaimer: I did my doctoral work at the University of Massachusetts Amherst, although Friedman was not there at the time. However, we have traded course syllabi and discussed how best to teach the first Great Depression.

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Readers will remember that, in Evangelii Gaudium, the leader of the Catholic Church developed a scathing critique of trickle-down economics and of the existing economy of inequality and exclusion.

Ironically, thanks to the reporting of Paul Moses [ht: js], based on a recent report by the New America Foundation (pdf), we’ve learned that many Catholic colleges and universities are engaged in their own acts of exclusion.

at a time of escalating worry over access to higher education for the children of the least affluent Americans, the study found that five of the 10 most expensive private universities for low-income students, and 10 of the top 28, are Catholic.

Some Catholic colleges “seem to have departed from what you would assume the principles of their faith would have compelled them to do,” said Kati Haycock, president of the Education Trust, a nonprofit organization that advocates for low-income students.

“It’s disturbing that institutions give money in these very difficult times to students who don’t need it,” Haycock said, and “don’t focus their resources on those who absolutely need it the most.”

Some Catholic colleges have placed a high priority on meeting the needs of very low-income families, while others have limited resources to do so. However,

some of the Catholic colleges that charge the most have robust wealth in the form of their endowments. Saint Louis University has a $956 million endowment; the University of Dayton, $442 million; Catholic University, $264 million; Saint Joseph’s, $193 million; and Loyola of Maryland, $177 million, the National Association of College and University Business Officers reports. Among the other Catholic universities with high net prices for low-income students, Villanova University has an endowment of $419 million and Notre Dame, $6.9 billion.

According to the New American Foundation, my own university, with a $6.9 billion endowment, has an enrollment that includes just 12 percent of Pell Grant students and a net price of more than $15 thousand for low-income students.