Robert ReichBack to OpinionRobert Reich

Stop starving public universities and shrinking the middle class

Last week Rick Santorum called the president “a snob” for wanting everyone to get a college education. (In fact, Obama never actually called for universal college education but only for a year or more of training after high school).

Santorum needn’t worry. America is already making it harder for young people of modest means to attend college. Public higher education is being starved, and the middle class will shrink even more as a result.

Over just the last year 41 states have cut spending for public higher education. That’s on top of deep cuts in 2009 and 2010. Some public universities, such as the University of New Hampshire, have lost over 40 percent of their state funding; the University of Washington, 26 percent; Florida’s public university system, 25 percent.

Rising tuition and fees are making up the shortfall. This year, the average hike is 8.3 percent. New York’s state university system is increasing tuition 14 percent; Arizona, 17 percent; Washington state, 16 percent. Students in California’s public universities and colleges are facing an average increase of 21 percent, the highest in the nation.

The children of middle and lower-income families are hardest hit. Remember: The median wage has been dropping since 2000, adjusted for inflation.

Pell Grants for students from poor families are falling further behind; they now cover only about a third of tuition and fees. (In the 1980s, they covered about half; in the 1970s, more than 70 percent.)


Student debt is skyrocketing – the New York Federal Reserve Bank estimates it at $550 billion. Punitive laws enforce repayment, and it’s almost impossible to shed student loans in bankruptcy. There is no statue of limitations for non-repayment.

And yet, Santorum’s rant notwithstanding, good-paying jobs in America are coming to require a college degree. Globalization and rapid technological change are putting a premium on the ability to identify and solve new problems. A college degree is also a signal to prospective employers that a young person has what it takes to succeed.

That’s why the median annual pay of people with a bachelor’s degree was 70 percent higher than those with a high school diploma in 2009 (the latest Census data available).

But public higher education isn’t just a private investment. It’s a public good. Our young people — their capacities to think, understand, investigate, and innovate — are America’s future.

We used to understand this. During the great expansion of public higher education from the 1950s to the 1970s, tuition at public universities averaged about 4 percent of median family income (compared to around 20 percent at private universities).

Young Americans received college degrees in record numbers – creating a cohort of scientists, engineers, managers, and professionals that propelled the economy forward and dramatically expanded the middle class.

But starting in the 1980s, as in so many other areas of American life, we took a U-turn. Tuition at public universities began climbing. By 2005, it was more than 10 percent of median annual family income. Now it’s approaching 25 percent – still a good deal relative to private universities (where it’s nearly 70 percent), but high enough to discourage many qualified young people from attending.

Public higher education has been the gateway to the middle class but that gate is shutting – just when income and wealth are more concentrated at the top than they’ve been since the 1920s, and when America needs the brainpower of its young people more than ever.

This is nuts.

What’s the answer? Partly to make public universities more efficient. Every bureaucracy I’ve ever been associated with (and I’ve been in some very big ones) has some fat to be trimmed. Yet universities are necessarily labor-intensive enterprises; research and teaching can’t be outsourced abroad or turned over to computerized machine tools.

Another part of the answer is to raise tuition and fees for students from higher-income families and use the extra money to subsidize medium and lower-income kids. Even now relatively few pay the official sticker price; many receive some discount proportional to family income. But this won’t solve the underlying problem, ether.

A big part of the answer has to be more government support for public education at all levels. This requires more tax revenues – especially from Americans who are best able to pay.

Most Americans still believe in the ideal of equal opportunity. And most harbor the patriotic notion that we have responsibilities to one another as members of the same society.

The two principles lead to an obvious conclusion: America’s richest citizens have a duty to pay more taxes so kids from middle and lower-income families have chance to make it in America.

A pending initiative in California would raise taxes on millionaires and use the proceeds to fund public education at all levels. It’s a good idea, and it comes at the right time. Other states should follow.

Published by arrangement with RobertReich.org.

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.

 

Comments

  • jan

    Considering the wealthy’s disinterest in paying their fair share of taxes, all I can say is good luck on that one.  

  • Richards_1025

    You need to take a course in Economics….then try a course in Accounting. I can assure you….the REAL cause to the problem…is DEBT!!!
    Obama has, in 4 years, exceeded the debt that the last 44 preisdents COMBINED accumulated. GET Obama the hell out of dodge!!!

  • Laurette

    The real problem-and it shows up in higher education- is America’s short term thinking.  It’s a very bad habit over the past 30-40 years.  The economic situation, created by the Bush-Cheney administration, can not be turned around in 3-4 years. It took ten years to create this debt that Obama mostly inherited.  It will take ten years to clear it again.  Americans need to start thinking long term solutions again..and that seemed to be Robert Reich’s most important point.  Thank you for that.

  • Bigothunter

    It is this kind of arrogant and illiterate lies that have come to characterize the republican discourse…You do not need to be a rocket scientist to understand that Clinton’s administration ended leaving a booming economy and ZERO national debt. It took 8 years of bakcward republican policies to throw our nation into the ditch Obama inherited in. That DEBT has been created by none other than a republican administration and its supporters like YOURSELF! Fortunately americans do not buy any more your selfrighteous KKK-style of argument!!!!

  • Bigothunter

    It is incomprehensible that college/university education is considered a priviledge in the USA, the wealthiest nation in the planet. Yet it is considered a fundamental right in many countries not nearly as rich. Government’s best spent money is, unquestionably, in education, which after all is the backbone and the foundation of the nation. Educating the people is building a brighter future for the country.

  • jan

     Not really surprising.  Look at all the third world countries who have elected women to be president or prime minister and who had a black leader long before we ever got around to it.  If you stop to look, there’s a lot to be disillusioned about when it comes to the USA.   

  • jan

     Not really surprising.  Look at all the third world countries who have elected women to be president or prime minister and who had a black leader long before we ever got around to it.  If you stop to look, there’s a lot to be disillusioned about when it comes to the USA.   

  • Athena

    When
    I was in college I did a presentation on this. The topic was “What is
    the biggest threat to America”. Over 10 years ago, annual hikes in
    tuition far exceeded inflation percentages. Average tuitions were
    becoming 30% of annual median incomes or up to 1 person’s annual
    salary. Yet wealthy families percentage wise paid the same as
    middle/lower class because they had higher household outlays. Back
    then, I could see that the middle class was going to be greatly
    affected.
     

  • Athena

    When
    I was in college I did a presentation on this. The topic was “What is
    the biggest threat to America”. Over 10 years ago, annual hikes in
    tuition far exceeded inflation percentages. Average tuitions were
    becoming 30% of annual median incomes or up to 1 person’s annual
    salary. Yet wealthy families percentage wise paid the same as
    middle/lower class because they had higher household outlays. Back
    then, I could see that the middle class was going to be greatly
    affected.
     

  • mc

    I don’t know how helpful all these universities. They talk big but do very little when it comes to employment opportunities. Students’ loans are on the rise.
    Cost of education is going up and chances of getting decent jobs are going down. It is so sad that politicians do not touch this topic as they do with the rest of the problems.

  • guest

    This is election time and the politicians from both parties are so careful in touching sensitive issues such as economy, education, and jobs that they do not overstate anything that would jeopardize their political gain.