Funding education is about keeping America competitive
Critics of recent teacher walkouts dismissed the protests as a simple pay dispute. But salary grievances are just a symptom of larger problems in America’s education system. At a time of growing concern over America’s ability to compete in the global economy, public schools, once seen as an engine of social mobility and economic opportunity, are under increasing financial strain.
Teacher walkouts helped draw attention to funding problems for K-12 education across several states. But the situation is equally dire for America’s public colleges and universities. State governments have systematically divested from public education over the past decade. Between 2008 and 2015, higher education spending per student dropped in 46 states.
Importantly, the downward trend isn’t just a result of widespread austerity. Over that same period, higher education was theonly major line itemthat saw cuts.
What’s the problem?
Shortfalls in state funding have to be made up for somewhere. Colleges and universities have opted for steep tuition hikes. Average tuition for four-year public institutions has increased over $10,000 since 2002. That’s about 65 percent.
Take Arizona, the scene of recent #RedforEd demonstrations. A Center on Budget and Policy Priorities report shows that Arizona made the fourth-largest spending cuts on higher education since 2007. Not coincidentally, tuition over that period almost doubled (increasing 90 percent).
The costs of higher education, once heavily subsidized by state governments, are now being passed on to students and their families. Unfortunately, American families can’t keep up. Tuition increases significantly outpace growth in household incomes. Thanks in part to the Great Recession, median incomes in the United States have barely budged over the past 10 years.
Hence, a sharp increase in student loan acquisition. Those unable to afford the higher price tag are turning to the federal government for aid. The Federal Reserve reports that total student loan debt exceeds $1.4 trillion. That’s the equivalent of 7 percent of current U.S. GDP — a record high.
How did we get here?
Incentives to cut higher education spending in favor of other fiscal priorities are plain to see. For one thing, the short-term political benefits of cuts outweigh the long-term costs. Faculty and administration salaries make for an easy political target. The tenure system, seen to protect inflated contracts, long has been a source of contention.
More recently, higher education suffers widespread criticism for “administrative bloat.” Never mind that evidence says otherwise. The argument is that universities are wasting money and need to get their fiscal priorities in order.
It’s no surprise, then, that state governments have found it politically expedient to cut higher education funding in favor of other fiscal priorities. After all, the costs of doing it won’t be fully visible until future generations.
The result has been a lost decade in higher education provision. Funding shortfalls have led to cuts in staffing, program offerings and scholarships. This means that colleges and universities aren’t just more expensive for the consumer. The “product,” in a word, is suffering.
What’s at stake?
The debate over education funding has larger implications. During the 2016 presidential election, we heard a lot about how America is lagging behind its global competitors, and President Trump hammered has this message. We are told that trade agreements such as NAFTA infringe unfairly on U.S. sovereignty. That other countries take away American jobs. That the trade deficit is unsustainable.
Yet, while elected officials point to problems overseas, they ignore the solutions at home.
The great promise of higher education — in the United States and around the world — is that it increases economic opportunities and spurs innovation. The hope is that education helps graduates climb the ladder of social mobility. Now that ladder has been kicked away from many families opting to forego college rather than take on additional debt.
One result is the current shortage of skilled labor. Fewer students are acquiring the skills needed to fill job openings, especially in key services industries. These sectors — information technology, finance, engineering — are among America’s last great comparative advantages. The ability of the United States to compete in global markets depends on keeping these industries fed with talent. And yet the economy is falling significantly behind.
The ill effects of these shortfalls are not yet fully visible. But history will show how severely state governments have miscalculated. If governments want to see the U.S. economy grow and remain competitive, they need to put the keys back in the ignition. As of now, higher education budget cuts have shut off the engine of economic innovation.