As we saw a week ago, Doug Holtz-Eakin, speaking on behalf of John McCain, said that the inability of the number of people graduating from college to keep pace with the growth in the skills premium for college graduates is the sole cause of growing inequality. As I said at the time, this is wrong. The evidence is clear that other things are going on. But it’s also clear that this is one factor. And given that it really is an important part of the puzzle, and that the McCain team thinks it’s the entire puzzle, you’d think that John McCain would have a real higher education policy. But he doesn’t. Until now. But today, via Steve Benen, McCain unveils his “plan” for affordability:
As president, Mr. McCain would take a bully pulpit approach to student aid, aides say. Rather than propose any new federal money, he would jawbone and publicly try to coax colleges to slow their rate of tuition increases using the federal tax exemptions they receive as leverage….
Mr. McCain is also calling for the Pell Grant, which assists low-income students, to be high enough to cover in-state undergraduate tuition…. Mr. McCain, however, has not proposed any new money for the Pell program.
Long story short, I think we can expect inequality to keep growing.
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October 30th, 2008 at 10:18 am
Frickin idiots. Poor Holtz-Eakin.
October 30th, 2008 at 10:24 am
There was recently a paper out about education levels in Fiji. It looked at what happened with the education levels when highly skilled ethnic Indians left due to government policies that were hostile to them. It found that the education level went up. It attributed this to the population seeing the value of enough education to get them out.
The reverse may be happening in the US. With a healthy H1B program the value of a degree is lessened. It suppresses wages enough at the most noticeable levels causing people to lower their opinion of the value of a degree.
I unfortunately can’t find the site on which I read about the study.
October 30th, 2008 at 10:27 am
Wow, more unfunded mandates. FAIL.
I worked in the financial aid office of my school (private) and like clockwork every year, tuition went up 3-4% to cover expenses and inflation. Colleges aren’t going to run into the red because McCain says so.
October 30th, 2008 at 10:35 am
McCain should hire Kenan Thompson’s latest SNL character. FIX IT! Step 1: Fix! Step 2: It! Step 3: FIX IT!
October 30th, 2008 at 10:43 am
This seems similar to McCain’s positions on a lot of issues, which follow the pattern:
1. He claims he’s strongly in favor of it.
2. He’s opposed to government action in general.
3. Therefore, he isn’t actually giving you any reason to vote for him based on that position, but he does his best to obscure that by telling you how great it is.
Perhaps the most spectacular example is renewable energy. McCain mentions it in all of his stump speeches, and his campaign gets annoyed at the other side for pointing out the many times he’s voted against funding it, because really, he’s in favor of it. But the fact is that he’s more in favor of government “staying out of the way,” which is at least a philosophically consistent conservative view, but it isn’t “support” in the sense that most people understand it.
October 30th, 2008 at 10:46 am
McCain takes this “bully pulpit” approach to almost every problem. He’ll solve the financial crisis by criticizing “greed and excess” on Wall Street and in Washington. He’ll fix Iraq by telling the locals to “stop the bullshit” and get along. In no case are specific policies or actions proposed–McCain’s moral suasion is supposed to be all-powerful. Which makes it weird that he likes to attack Obama for being too eloquent. If you think the bully pulpit is the chief tool of a president, wouldn’t you want someone eloquent in the job?
October 30th, 2008 at 11:01 am
No, you just want a bully. McCain fits the bill.
As for the subject at hand, the corporate world puts far too much emphasis on obtaining a degree. For jobs that used to require a bachelor’s, now you need a master’s. Etc. A friend of mine used to work as a contractor for Fed Ex. He had an associates in computer programming. Amazingly, Fed Ex decided to replace his position with a full time employee. Yeah, I know, crazy, but apparently it still happens, or did back in 2000.
Anyway, he applied for his own job and was turned down because he wasn’t qualified… to do the job he was doing… because he didn’t have a bachelor’s degree. He was, however, kept on for three more months… to train his replacement… who had a bachelor’s degree but couldn’t step into the job and start programming on day one. Which is what he was expected to be able to do on his first day with his associates degree.
October 30th, 2008 at 11:12 am
Isn’t this the same plan that he had for Iraq, where he was going to get the sunnis and shias in a room and tell them to stop the bs? This would be funny if it wasn’t sad.
Five days left…
October 30th, 2008 at 11:27 am
>With a healthy H1B program the value of a degree is lessened.
This has to be one of the dumbest things I’ve read this week.
The number of working Americans is something far north of 100 million people.
The number of people on H1Bs is probably far less than a million. Somehow those 60-100k people admitted per year (for a maximum of 6 years) for high-tech jobs invisible to most Americans are the reason Americans devalue education? What an enormous amount of symbolic power we wield: my very presence as a Canadian man or Indian woman or Taiwanese man sitting in a Silicon Valley office park is making 100 native-born Americans in the midwest lazy. What an enormous clout we wield.
How I wish that power translated into green cards, so that my H1B bretheren and I might provide Americans with a lifelong motivation for sloth and slack.
October 30th, 2008 at 11:30 am
Gee, where have we heard this BS before? Oh, wait, I know. When Bush was running for office and promised to “jawbone” those Middle Eastern countries to open that ol’ oil spigot for our benefit.
And that worked so well.
October 30th, 2008 at 11:54 am
I think it’s interesting that McCain wants to give the academy tough love but is not interested in cajoling the oil industry to spread the profits around. I’m a college professor, and I can say with some confidence that we don’t get into the business for the money (for the quality of life and occasional semester of four-day-weekends? yes!) Schools aren’t sitting on bundles of money and (with the exception of some outrageous athletic coach salaries) the employees are hardly living the fab life.
Curbing tuition will only result in universities hiring more adjuncts for less pay (and no benefits) and further pressure on graduate students to cover more and more classes. Students in one of my past institutions could actually graduate without having taken a single class from a member of the research faculty. I’m not bagging on adjuncts and grad students (having been both), but their position at the university is tenuous and temporary, and this means a less cohesive curriculum and a more frazzled teaching staff. This is a recipe for decreasing the quality of education and the value of a university degree.
October 30th, 2008 at 12:02 pm
You beat me to it, I was going to say the same thing.
October 30th, 2008 at 12:32 pm
I doubt higher education has all that much to do with increased productivity. Most of the skills needed to fill a position are learned through on the job training. College is mostly a way to exercise one’s intellect, improve the quality of leisure time activities, expose oneself to a wide range of ideas and perspectives, and set up connections (these are all good things). There is some relevant economic skill acquisition, but not all that much.
The real sources of inequality are things like the decline in unionization, deregulation, and the general conservative social climate and that allows companies to cut costs through outsourcing, wage and benefit freezes, etc. instead of increasing productivity and efficiency. The way to reduce inequality would be simply to force companies to pay their employees relatively high wages and then compensate for the higher costs through, you guessed it, increased productivity. And if a particular company can’t make it work than another company will, (simple selection) and the result is a society of highly paid workers with a relatively equitable distribution of wealth like in the generation after WWII.
In fact, higher education may at this point be a contributing factor to increased inequality as many students learn in an intro to econ class that the free market is the greatest thing ever and companies should be able to do whatever they want. This usually translates into conservative politics (sometimes adopted by Democrats), which is the death knell for the middle class.
October 30th, 2008 at 1:00 pm
Yowsa: The actual numbers don’t have to be very high. The *possibility* of hiring a lower-wage H1B worker can drive down wages of everyone else, even if they aren’t hired very often.
This was one of the real-world functions of segregation in the past — having an underclass meant having a pool of cheap labor that applied economic pressure to the wages for whites.
October 30th, 2008 at 1:35 pm
But this is exactly the right approach. For those who haven’t caught on, whenever the government makes college more affordable through grants or loans or tax credits, colleges raise tuitions to extract that extra wealth for themselves. Students compare colleges primarily on the basis of prestige, location, and fit, but generally not on price unless the price is so high as to be unaffordable or so low as to be nearly free, and this allows colleges to extract nearly all of the value of student aid programs.
If I were President, I’d pressure the IRS to promulgate a regulation stating that colleges with a per capita endowment (that is, endowment per student) above a certain size may maintain their tax-exempt status only so long as they charge less than $X per year in tuition (and all living expenses, estimated book costs, and all the other direct costs that students bear to go to college), where X is inversely proportional to their endowment per undergraduate student. If I were clever, I’d do the same for law school, business school, engineering programs, and so on.
I guarantee you that this would do TONS more to reduce the cost of college than any amount of government-granted financial aid.
October 30th, 2008 at 1:36 pm
Excuse me — I would pressure the Treasury to promulgate the regulation, not the IRS.
October 30th, 2008 at 1:39 pm
>he would jawbone and publicly try to coax colleges to slow their rate of tuition increases
That will only work if the jawboning is done as Sampson used the jawbone, otherwise, it is just empty talk.
October 30th, 2008 at 4:31 pm
Matt needs a headline writer.
October 30th, 2008 at 6:03 pm
We can expect inequality to keep growing as long as we keep importing millions of people with very little education.
This problem doesn’t go away over the generations, either. A new and monumental study of Mexican-Americans by the UCLA Chicano Studies Center found that only 6% of fourth generation Mexican-Americans (i.e., their grandparents were born in America) have college degrees, versus 35% of their non-Hispanic white counterparts.
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