over the hill and out of cash

I am over the hill by any reckoning, but it seems I am in concert with the country. According to the National Center for Public Policy and Higher Education, the United States is already one of the few countries where younger workers aged 25 to 34 are less educated than older workers. This was in a study showing how higher education costs have been skyrocketing – a lot more than even health care costs, which I figure comes out to about absurd insanity times two.

This is doubly unfortunate because I work in one of very few industries besides entertainment that has a positive trade balance for the U.S. Thomas Friedman’s famous flat world book noted that we have more than half of the institutions of higher education and we get lots of foreign students – who generally pay more tuition. This works out for them because the value of a U.S. degree back home is not only marketable but readily monetized – I heard that Koreans can expect 10% higher salary with an American degree.

The National Center report was focused on how unaffordable colleges and universities are becoming for Americans – we could conceivably still provide a positive trade balance simply by educating others – but I suspect that a country where the young are less able and acute will not maintain its high-end brand for long. I also suspect that our two leading exports are inextricable linked: the branding of American education derives in significant part from the entertainment industry – especially Hollywood – which projects, promotes and packages our lifestyle for world consumption. The even more craven portrayal of the recording industry – think bling – reinforces an image of wealth that is part and parcel of the American experience. And while the hip-hop world hardly celebrates education, where but an American university can an aspiring Ghanian, Korean or Kuwaiti find the lifestyle promoted in all the music and movies? We can only pray that our brand remains strong, otherwise a lot of schools are going to go under.

Or, they will do what other industries did – move abroad for cheaper labor. University professors are not generally paid as well as auto workers, but they are paid less in Asia and Africa, so I wouldn’t be shocked if certain schools expand little exchange programs and study centers into fully functioning educational maquilladoras. Students will save on travel, universities will save on staff costs.

Our school is promising a detailed look at the state of American education and there is great concern here about the corporatization of academia. The bottom line remains the bottom line – where does the money come from? Schools rely on poorly-paid part-time faculty and yet tuition rises faster than health care costs – we don’t even have snake oils like Viagra and Prozac to blame. We don’t have private jets either, and our Boards are unpaid. So where is the money? My guess is that we grew based on government grants and loans that are now shrinking – just as home values grew on low interest rates. And unfortunately, the two are linked: home mortgages likely financed a lot of education.

As a historian, I see the huge influx of government capital that created this industry in the 1940s and 1950s (and the spectre of Vietnam that fed it into the 1970s) as an historical event that is not likely to repeat. I don’t expect the universities to join the banks, brokerages and automakers in the Washington soup line with their begging bowls. But things can’t remain as they are. And they won’t. The Moving Finger writes…

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