Educational Funding and Governments

[Pengwuino]

So hopefully I can redirect the discussion from:

https://www.physicsforums.com/showthread.php?p=3229442

to here.

I read an interesting article last night

http://www.theatlantic.com/national/archive/2011/03/an-anti-college-backlash/73214/

One of the things that stuck with me is this part:

Since when have colleges become so controversial? They used to embody humankind at its most elevated; now, they're just another institution to be wary of.

I attended college in the 1970s, when higher education wasn't newsworthy. When you went away to college, you really went away. I checked into a sylvan campus far away from everything, signed up for a meal plan, submerged myself in the library stacks, and essentially disappeared. Society took little note of academia's somnolent doings because there was little to take note of. Student activism on any significant scale was moribund. The Vietnam War was over.

This is in contrast to Universities today where college is something someone seems to do on the side. I recently read another article saying that students average study time per week has dropped to something ridiculous like 5 hours a week.

So the argument for funding education seems to be that it is an investment in the future. I'm starting to disagree completely on this most fundamental "common sense" ideas. I've read other articles that point to studies that show the average college graduate increasing their mathematical and written presentation skills by a minuscule amount. Also, consider that productivity actually increased during the recession (http://www.bls.gov/news.release/pdf/prod2.pdf). To me, this paints a certain picture. 1) The American economy is not desperate for college graduates in order to grow the economy and 2) the American economy's greatest strength is not from the fact that so many people have college graduates, but because we have so many exceptional college graduates.

To me, it's the best citizens who grow the economy, not the fact that we have the most college graduates. Think about it! We've recently come off a decade of unmatched economic growth because of the dot-com era and explosive growth in online business. Was the reason for this because we had a lot of college graduates? No! It was because we had great minds at work! If our college graduates on average show little improvement in ability, how can the average graduate be seen as someone who grows the economy any more than a high school graduate? Why should we fund education if we are allowing this to happen? To me, the upper echelons of college graduates, the ones who build themselves up and improve and truly are educated productive members of society, are the reason America is so successful. However, too much money goes towards funding students who shouldn't be in college.

Europe's economy has countries that, per capita, rival and even surpass the American economy and they have no followed this concept of mass-produced college graduates.

 

[russ_watters]

I recently read another article saying that students average study time per week has dropped to something ridiculous like 5 hours a week.

I saw such an article recently and I'm pretty sure it was talking about freshmen. Regardless, how hard college is - and how hard you have to work at it - depends on the school and the major.

I've read other articles that point to studies that show the average college graduate increasing their mathematical and written presentation skills by a minuscule amount.

Well, similar to above, the choice of major is key. There are a ton of people who go to college and don't get a useful degree/don't gain much in the way of useful skills. They do, however, get a piece of paper that says they spent four years doing something and finished it. That alone has value toward getting a job.

Also, consider that productivity actually increased during the recession (http://www.bls.gov/news.release/pdf/prod2.pdf).

Isn't that all on a per-hour basis? That would be expected as the very first people you would lay off are the unproductive ones, which makes the average rise rapidly.

To me, this paints a certain picture. 1) The American economy is not desperate for college graduates in order to grow the economy.

Nothing you have said or shown thus far really speaks to that point. While "desperate" is a loaded word, the unemployment rate for college graduates tends to run half that of high school graduates and 1/3 that of non-high school graduates: http://www.calculatedriskblog.com/2009/06/unemployment-rate-and-level-of.html

And more important even than that is getting quality people for quality jobs. Speaking from a low-management position in an engineering company, we're having serious difficulty finding such people, with positions running unfilled for 6+months. That's desperate, though that isn't the case in general for the typical college grad who just has a relatively useless BA.

and 2) the American economy's greatest strength is not from the fact that so many people have college graduates, but because we have so many exceptional college graduates.

Ehh... I guess I half agree, but would say you need both.

 

[WhoWee]

This is in contrast to Universities today where college is something someone seems to do on the side. I recently read another article saying that students average study time per week has dropped to something ridiculous like 5 hours a week.

My guess would have been 8 hours per week average - 1 hour M-F and 3 hours spread over the weekend.

 

[Pengwuino]

They do, however, get a piece of paper that says they spent four years doing something and finished it. That alone has value toward getting a job.

So are you saying that sticking with something for 4-6 years is signs of a marketable skill in of itself? If so, I do see the point.

Isn't that all on a per-hour basis? That would be expected as the very first people you would lay off are the unproductive ones, which makes the average rise rapidly.

That is true, that doesn't really speak to my point, never mind.

Nothing you have said or shown thus far really speaks to that point. While "desperate" is a loaded word, the unemployment rate for college graduates tends to run half that of high school graduates and 1/3 that of non-high school graduates:

Sure but this has all been the result of periods of fast economic growth centered on high-tech job creation which pulls in a lot of college graduates. However, the point I am most interested in is whether or not you NEED all the college graduates we have. And when I question that, I really mean I question that mass production of college graduates, many of whom could be far better served in vocational school.

In my mind, most educational funding is directed towards educating people who will have marginal impact on the actual growth of the economy. Now, I really do believe that article tested students at their senior year (otherwise I would have called into question the legitimacy of such a statement because everyone knows your freshman year is a joke for most students). With this in mind, why are we going through such great pains and destroying government budgets with funding higher education in it's current state? That's what I am concerned about. To me it's like investing 50% of your money in blue chip and up and coming tech companies, while investing the other half in something doomed to fail (uhm... GM?) where you could have put it in something more sensible like bonds.

To be clear, I really do feel a majority of the university system is a good investment, but a TON of money is spent on educating people who will have marginal impacts on economic grwoth. That's why I'm starting to reject the notion of keeping funding where it is as anything more than half investment, half money-bonfire. This money is far better spent on increasing access to vocational schools where people who just flat out want a better paying job can get those better paying jobs.

 

[Pengwuino]

My guess would have been 8 hours per week average - 1 hour M-F and 3 hours spread over the weekend.

This was actually exactly the number that I believe was cited for the 1980s.

 

[russ_watters]

So are you saying that sticking with something for 4-6 years is signs of a marketable skill in of itself? If so, I do see the point.

Not quite sure about the wording of that: I'm saying being able to stick with something for 4-6 years and finishing it is a marketable skill. In other words, it's not a sign that you learned a marketable skill, it is the marketable skill.

However, the point I am most interested in is whether or not you NEED all the college graduates we have.

We don't. There are a lot of jobs that really don't require it and a lot of people who show their worth without it. But that doesn't make it not in demand.

And when I question that, I really mean I question that mass production of college graduates, many of whom could be far better served in vocational school.

I'm not sure vocational school is a good alternative to a college - it's more an alternative to a "normal" high school and/or junior college/associates degree afaik.

With this in mind, why are we going through such great pains and destroying government budgets with funding higher education in it's current state? That's what I am concerned about.

I didn't think we spent all that much on higher education, but I guess I'm not sure.

This money is far better spent on increasing access to vocational schools where people who just flat out want a better paying job can get those better paying jobs.

Don't education grants/student loan programs also apply to technical/vocational schools? Just a quick google, but the GI bill applies to such schools: http://www.militaryhub.com/education-schools-vocational.cfm

 

[Pengwuino]

Not quite sure about the wording of that: I'm saying being able to stick with something for 4-6 years and finishing it is a marketable skill. In other words, it's not a sign that you learned a marketable skill, it is the marketable skill.

Blah I need to review what I say. Yes, that is what we agree on. I meant to say something else that implied what you said, but then got all screwed up. Although that brings up something else. Universities are falling down this slope where less and less is demanded. Going to a university for 4 years doesn't say much when all that means is you drove to campus 3 days a week and fell asleep in a lecture hall while the government paid for your living expenses. Hell, I know people who won't stop attending college because that means they'll lose their financial aid and have to get a job.

We don't. There are a lot of jobs that really don't require it and a lot of people who show their worth without it. But that doesn't make it not in demand.

Ah but that's not entirely my point. I'm talking about higher education as an investment on the public's dime. Is the relationship linear between investment in all higher education and economic development? Which will create more economic growth, $100M investment at Berkeley, or $100M at one of the lower rung universities?

I didn't think we spent all that much on higher education, but I guess I'm not sure.

It's a size-able chunk. The CSUs in California, by my calculation, have an operating budget total of around $4 billion. This is mainly paid for by the State (although less so now). Compared to the actual budget problem here, that really isn't saying much though on second thought. Even when you bring the UCs into the picture, the operating budget doesn't really make higher education seem like a drain (and consider the UCs have bigger endowments, less reliance on state governments and more external funding) come to think of it.

Although the size of the investment isn't really my point, it's whether it can really be considered an investment in the first place.

Don't education grants/student loan programs also apply to technical/vocational schools? Just a quick google, but the GI bill applies to such schools: http://www.militaryhub.com/education-schools-vocational.cfm

Yes, we do fund all sorts of stuff like that, which actually is a horrid scam in its present form. Remember a little while back the small uproar over one of these online colleges hiring people whose sole purpose was to convince the government to give them money? So actually, I say the whole system is in need of reform, not just universities.

 

[Shackleford]

Not surprising you'd say raise taxes on the rich. That's your (type) solution for everything. It's foolish at best. You need to scrutinize what the money is being spent on. We have a limited federal government. The Founding Fathers knew something every liberal, quasi-socialist, Marxist, Leninist, whatever, doesn't understand. Government has a natural tendency for self-aggrandizement. Bureaucracy grows ad infinitum. How does it do this? By taking on new "responsibilities" and programs. How does it fund such things? By taking more of our money. Where is economic growth? In the private sector, not government.

Limited essential functions of government. The government "taking care of everyone" is a pretense for political power. Government is never beneficent. Don't be fooled. We have the worst of the worst in elected office raiding the treasury. Who should take care of the poor, elderly, and truly disabled? Charities, strangers, and family, especially family. In one particular subculture, the government has replaced the father. The more comfortable someone is made in their poverty, the longer they will stay and not work their way out of it.

All of these issues are interrelated. Universities fund all kinds of useless programs non-essential to learning. How do I know? I looked at my school's line-item budget. I also sent an email to the student body president when he was trying to garner student support to go to Austin and whine about a 6% state funding cut.

 

[Pengwuino]

... who said anything about raising taxes?

 

[russ_watters]

Ah but that's not entirely my point. I'm talking about higher education as an investment on the public's dime. Is the relationship linear between investment in all higher education and economic development? Which will create more economic growth, $100M investment at Berkeley, or $100M at one of the lower rung universities?

It's a size-able chunk. The CSUs in California, by my calculation, have an operating budget total of around $4 billion. This is mainly paid for by the State (although less so now). Compared to the actual budget problem here, that really isn't saying much though on second thought. Even when you bring the UCs into the picture, the operating budget doesn't really make higher education seem like a drain (and consider the UCs have bigger endowments, less reliance on state governments and more external funding) come to think of it.

Well, I'm looking around for stats. According to this, the government spent $536B on k-12 education in 2005 from all government sources. http://www2.ed.gov/about/overview/fed/10facts/edlite-chart.html#1

I'm having trouble finding how much the government spends on higher education, but "mainly paid for by the state" would surprise me.

Although the size of the investment isn't really my point, it's whether it can really be considered an investment in the first place.

Well, the reason I'm pressing for it is that in order to know if it is an issue worth caring about, I need to know how much we spend. If we spend 50 billion on higher and 500 billion on k-12 (for example), then I wouldn't see government spending on higher ed to be a big issue.

Secondly, in order to properly evaluate an "investment", you need to compare what you get out of it to what you pay for it. That's what an ROI is!

 

[russ_watters]

This says federal spending on higher ed is $10B: http://www.bloomberg.com/news/2011-02-14/higher-education-funding-cut-by-89-billion-over-10-years-in-obama-budget.html

This says states spent $83B in 2006: http://chronicle.com/article/Study-of-State/41370

So the government spends a little more than 5x as much on k-12 as on secondary.

 

[turbo]

This says federal spending on higher ed is $10B: http://www.bloomberg.com/news/2011-02-14/higher-education-funding-cut-by-89-billion-over-10-years-in-obama-budget.html

This says states spent $83B in 2006: http://chronicle.com/article/Study-of-State/41370

So the government spends a little more than 5x as much on k-12 as on secondary.

Is this broken down better? If you need to spend a pile of money to feed poor children, that is money that is going toward infrastructure and some employees, instead of being directed to buying educational assets.

 

[Office_Shredder]

This says federal spending on higher ed is $10B: http://www.bloomberg.com/news/2011-02-14/higher-education-funding-cut-by-89-billion-over-10-years-in-obama-budget.html

It says the federal government cut 10 billion dollars of spending. It says that Pell grants alone cost 35 billion dollars, and seems to indicate that the plan is to spend about 77 billion dollars

 

[russ_watters]

Is this broken down better? If you need to spend a pile of money to feed poor children, that is money that is going toward infrastructure and some employees, instead of being directed to buying educational assets.

I don't understand what you are trying to say.

 

[russ_watters]

It says the federal government cut 10 billion dollars of spending. It says that Pell grants alone cost 35 billion dollars, and seems to indicate that the plan is to spend about 77 billion dollars

Oops, I misread - I thought it was to $10B, not by $10B. I think it is saying $77B is the total. So that makes higher ed spending a little less than 1/3 of k-12.

 

[ParticleGrl]

This is in contrast to Universities today where college is something someone seems to do on the side. I recently read another article saying that students average study time per week has dropped to something ridiculous like 5 hours a week.

To be fair- college costs are a different beast than they were in the 70s (or even 80s, or even 90s). While I only spent maybe 10 hours a week dealing with courses/etc, I worked a full time job and a part-time job to help pay for school. At the ivy league institution I attended, this was not uncommon among middle class students attending the school. Financial aid+loans covered tuition and about half my books. If I wanted to eat, and to rent a room, I couldn't focus full time on studies. How many students in the study had work-study jobs? How many had jobs outside campus? How many were doing volunteer work necessary for landing a good internship or applying to a medical school?

Also, consider that productivity actually increased during the recession (http://www.bls.gov/news.release/pdf/prod2.pdf). To me, this paints a certain picture. 1) The American economy is not desperate for college graduates in order to grow the economy and 2) the American economy's greatest strength is not from the fact that so many people have college graduates, but because we have so many exceptional college graduates.

Think about how this productivity rise happened. Highschool graduates were fired at a much greater rate than college graduates, what does that say about their relative productivities?

Also, keep in mind you should expect productivity to rise in a recession. More people out of work means better people are willing to accept lower wages. Further, as demand for materials drops, they become cheaper. If it used to cost $100 in materials for a worker to produce a $200 product, and it now costs $50 in materials for a worker to produce the same $200 product in the same time, you've increased your worker productivity by 50%.

Consider- the easiest way to answer the question "how valuable is a college degree" to the economy is to look at wage premiums. The beauty of market prices is that they encode a great deal of information in a single number- the price (or wage in this case.)

A college graduate will STILL make more money over their lifetime than a high school graduate- the market puts a high value on it. Further, in this recession college graduates are less likely to be unemployed- which means they are deemed as more essential by companies. Using wage premiums, I would make the argument that people with masters degrees are the most valuable to companies (probably because of professional masters degrees), followed by college graduates, followed by phds, followed by high school graduates, and last and least- high school dropouts. According to the market, business majors add more value to the economy than physics majors (so do electrical engineers and computer scientists).

To me, it's the best citizens who grow the economy, not the fact that we have the most college graduates.

Define best citizens?

We've recently come off a decade of unmatched economic growth because of the dot-com era and explosive growth in online business.

And the people leading the way in this brave new world of online business- college graduates. Particularly people with CS and marketing degrees (hence their higher wage premium).

Europe's economy has countries that, per capita, rival and even surpass the American economy and they have no followed this concept of mass-produced college graduates.

Europe funds higher education to a much larger extent than the US- in most of Europe a college education is free. I think in the US college degrees are something like 40% of the population, and in Europe its something like 35%. Significant, but not a huge difference.

 

[Pengwuino]

Define best citizens?

The ones who create the big ideas that lead to giant "booms" such as what has happened with the internet. That's what many people are worried about in the US. When will the next big leap happen that creates vast numbers of jobs and economic growth happen? What sector? Is it possibly never going to happen again?

And the people leading the way in this brave new world of online business- college graduates. Particularly people with CS and marketing degrees (hence their higher wage premium).

But which ones? That's the point. All college graduates are not the same. I think everyone remembers the era when CS was THE major. You get your CS degree and you expected 6 figure incomes within a few years. But EVERYONE thought that, at every university, and at least here, we had CS students who were just god awful still graduating and when things fairly quickly settled down, I personally heard of many CS grads SOL when it comes to decent work.

Europe funds higher education to a much larger extent than the US- in most of Europe a college education is free. I think in the US college degrees are something like 40% of the population, and in Europe its something like 35%. Significant, but not a huge difference.

I would be surprised that the gap isn't wider considering the differences in European and US systems.

 

[ParticleGrl]

The ones who create the big ideas that lead to giant "booms" such as what has happened with the internet.

And how do you plan to identify these people, and educate them without also educating a fair amount of the populace? If you spend 100 billion a year on higher education, how many Tim Berners-Lees do you need to make back that investment?

But which ones? That's the point. All college graduates are not the same. I think everyone remembers the era when CS was THE major. You get your CS degree and you expected 6 figure incomes within a few years. But EVERYONE thought that, at every university, and at least here, we had CS students who were just god awful still graduating and when things fairly quickly settled down, I personally heard of many CS grads SOL when it comes to decent work.

CS majors still get good work- in lists of starting salary by major, computer science and computer engineering are both consistently in the top 5. This means that the degree is highly valued in the market. Basic economic theory suggests that this means the average CS major adds lots of value to the economy. Much more so than the average high school graduate.

 

[turbo]

I don't understand what you are trying to say.

As family incomes decline/stagnate, more and more children qualify for free lunches, and many school districts have started breakfast programs, too, increasing the load on taxpayers even more. Cooks, servers, janitorial services, kitchen staff, all cost money. For some kids, the food they get at school is a very important part of their total nutrition.

Getting a total cost of educating public school kids not so enlightening without a break-down, especially when schools are being used to provide social services as well as education.

 

[BobG]

Also, keep in mind you should expect productivity to rise in a recession. More people out of work means better people are willing to accept lower wages. Further, as demand for materials drops, they become cheaper. If it used to cost $100 in materials for a worker to produce a $200 product, and it now costs $50 in materials for a worker to produce the same $200 product in the same time, you've increased your worker productivity by 50%.

You'd expect that logically, but it usually isn't true in practice. Believe it or not, companies do prefer to hang on to experienced workers even in a recession, mainly because they know recessions are temporary and they'll soon need those experienced workers again. In practice, productivity usually decreases slightly during a recession in spite of layoffs. In other words, companies keep as many workers as they can afford even when they don't currently have meaningful work for them because of a reduced demand for the products they normally produce.

I'm not sure increased productivity in this recession supports the original post, but the fact that productivity actually increased does make this recession different from most.