Posts Tagged ‘states’

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For the first time in American history, students in more than half of all U.S. states are paying more in tuition to attend public colleges or universities than the government contributes.

The privatization of public education has been under way for decades but this inflection point was hastened by deep cuts states made to their higher-education appropriations in the midst of the Second Great Depression.

For the United States as a whole, according to a new report from the State Higher Education Executive Officers Association, students and their families were forced to come up with almost half (46.2 percent) of total educational revenue for public colleges and universities in 2017. They had to pay only 28.8 percent of the total in 1992, a share that had risen to 36.2 percent in 2007.

Increasingly, public higher education in the United States is public in name only.

And the privatization of the public educational system is costing the American working-class dearly. In 2016, net tuition for one student (full-time equivalent) came to 10.9 percent of median household income. That’s almost double what it was in 1992: 5.7 percent. Even as recently as 2007, it was only 7.9 percent.

While public financing for higher education has improved in recent years, the overall trend of less public support and students having to shoulder more of the burden continues.

After the crash of 2007-08, educational appropriations dropped 24 percent over four years, to $6,525 in 2012. This was largely due to accelerating enrollment growth (especially in community colleges) and the lack of proportional funding increases. Reversing this decline, appropriations have now increased for five straight years: 2.0 percent in 2013, 4.9 percent in 2014, 5.0 percent in 2015, 1.6 percent in 2016, and 2.5 percent in 2017. However, in 2017 states appropriated almost $2,000 less per student than they did in 2001, and $1,000 less than before the crash.

The same question applies today as when I wrote about the problem of higher education back in 2016:

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).

 

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Tomorrow, voters in five states—Alaska, Arkansas, Illinois, Nebraska and South Dakota—will vote on ballot initiatives proposing an increase in the states’ minimum wages.

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According to Ben Casselman, if the initiatives are approved, 684,000 low-wage workers may see an increase in their wages in the next couple of years.

S*&P-revenues

OK, it’s not a very good chart (the yellow line should be labeled the share of income to the top 1 percent, and the blue line the annual percentage change in state tax revenues). But the argument is, in fact, serious: Standard & Poor’s [pdf] finds a strong correlation between growing income inequality and the fiscal crisis of the states.

The argument is pretty straightforward: rising income inequality since the late 1970s has been accompanied by two trends in the tax revenues received by the various states: a slowing in the rate of growth of tax revenues (from 1980 to 2011, average annual state tax revenue growth fell to 5 percent from 10 percent) and by a growing volatility in state tax revenues (from a standard deviation of 3.55 during 1950-1979 and 1.04 during 1990-1999 to 5.78 from 2000 to 2009).

And the explanation for this relationship?

the higher savings rates of those with high incomes causes aggregate consumer spending to suffer. And since one person’s spending is another person’s income, the result is slower overall personal income growth despite continued strong income gains at the top.

On top of that,

Those at the top obtain more of their income from capital gains, which on the whole, fluctuate much more than income from wages. Tax revenues reflect this — both as a consequence of higher top-end tax rates and because the top end is where the income growth has occurred –- and are, therefore, more volatile.

Thus, we should understand the following: when Standard & Poor’s downgrades the credit rating of one or another state, it’s actually downgrading the rise of income inequality within and across the states.

state min wage

Here, based on a study by Arindrajit Dube [pdf] is a chart designed by Alissa Scheller (for the Huffington Post) of what each state’s minimum wage would be if it met the minimum standard of being equal to one-half the median wage in each state.

As Dubit explains,

A natural target is to set the minimum wage to half of the median full-time wage. This target has important historical precedence in the United States: in the 1960s, this ratio was 51 percent, reaching a high of 55 percent in 1968. Averaged over the 1960–1979 period, the ratio stood at 48 percent. Approximately half the median full-time wage is also the norm among all OECD countries with a statutory minimum wage. For OECD countries, on average, the minimum wage in 2012 (using the latest data available) was equal to 49 percent of the median wage; averaged over the entire sample between 1960 and 2012, the minimum stood at 48 percent of the median (OECD 2013). In contrast, the U.S. minimum wage now stands at 38 percent of the median wage, the third-lowest among OECD countries after Estonia and the Czech Republic.

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Special mention

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Map of the day

Posted: 28 February 2014 in Uncategorized
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MedicaidMap

The map above indicates the net loss of federal funds by 2022, in millions, for the 20 states choosing not to participate in Medicaid expansion, assuming all other states participate.

As the Huffington Post explains,

Following a 2012 Supreme Court ruling that made Medicaid expansion under the Affordable Care Act optional for states, 20 states have opted out of the reform, rejecting billions of dollars of federal funding for low-income residents. Texas and Florida will lose more than $9 billion and $5 billion, respectively.

See, also, Al Madrigal’s lambasting of the states that rejected expanded Medicaid coverage under the Affordable Care Act.