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Sunday, September 06, 2009
Dismal Science Fiction
x-posted: howtheuniversityworks.com
Another scarily bad article from The New York Times on the economics of higher education is making the rounds. Purporting to explain why college costs keep rising, columnist Ron Lieber does a job so superficial, so thoughtless, so unresearched and unfact-checked--in sum, so embarassingly bad--it really wouldn’t have passed editorial review in many responsible college dailies.
Lieber has just one main source for his piece, a college president MBA with nonacademic experience in management consulting. He tells Lieber that problems one and two with college costs are faculty productivity and faculty resistance to closing departments. Third, he admits that there might also be a bit of an explosion in administrators and service personnel.
Hm--no mention of facilities wars? Marketing? Technology? Venture capitalism and patent questing? Declining public investment? Sports? Administrator salary? Grad programs to scam the rankings?
No mention of who benefits from those unmentioned soaring costs, either: wealthier students and parents, administrators, the business community, local elites consuming the sports spectacle (what, you thought those were students packing the seats at Division 1 basketball games?)
Lieber’s fake journalism here is bad faith on the scale of your Glenn Beck, Sean Hannity and other right-wing loons. Obviously, first, he doesn’t know squat about where colleges really spend their money, and isn’t much interested in finding out. His college president isn’t a source of knowledge on the issue; he’s just a quotation farm for Lieber’s half-baked preconceptions. By Lieber’s own admission, he didn’t actually look for a scholar who knows something about these questions--he just went looking for someone, anyone, in university management with an MBA.
Second, he doesn’t fact-check his source’s claims. By any measure, for instance, faculty are INSANELY “productive,” teaching more students at less cost to the employer than at any point since the one-room schoolhouse.
Anyone who knows anything about faculty labor costs knows a) that research faculty in many traditional arts and science fields get a lower return on their years of education than police officers, kindergarten teachers and bartenders and b) about 3/4 of all faculty aren’t even tenurable, much less research faculty, commonly working at “wages” that amount to philanthropy.
Lieber similarly fails to look into the facts of department reorganization--how many such efforts have been made? how many have been defeated by faculty? at what cost? And of course this would really be straining his brain cells, but he’s describing the sort of reorganization that happens all the time at for-profits and community colleges: how’s that working out for students?
In case you’re interested, I’ve an excerpt from HTUW that tries to think a bit about the main questions Lieber is trying to raise, ie, where the money goes and Who Benefits From the Tuition Gold Rush? Read more here, and if you really want to see how colleges generate revenue from student misery, read this mind-bending case, Extreme Work-Study (pdf).
The Real Drivel
As regular readers know, I already played the drivel and junk-analysis cards with the New York Times earlier this year. Plenty of people who agreed that the pieces were lousy or off-base thought playing the drivel card wasn’t necessarily a great rhetorical choice on my part, and maybe they were right. I mean, geez, there were ideas in Mark C. Taylor’s piece. They were bad ideas, poorly informed, contemptuous of most other faculty and perhaps a touch self-interested (Taylor is a distance-education entrepreneur), but at least they were ideas. And once you dismiss one piece as drivel, however epic its badness, what have you got left for something that’s next-generation worse?
But Lieber? Come on, New York Times: with all the unemployed journalists floating around, you can’t find one that gets perma-temping and can put it into words for a mass readership?
I’ve also tried to note when Grey Lady gets it right, by the way. Krugman has a great piece on why even good economists have been getting it wrong. He emphasizes the love of modelling over actual research--which is part of the story of why the few economists who’ve taken on higher education have done such a poor job (pdf, pp 15-27).
Comments
We can probably look at it this way: around 60 percent of costs might involve wages, 30 percent utilities, bldg. maintenance, etc., and 10 percent for extraordinary costs, including scholarships.
If the budget for wages has to go up by around 20 to 30 percent because of the employer’s contribution to SSS and pension plans, as well as salary increases (perhaps 10 pct a year), thirteenth-month pay and other benefits, leaves, and so on, and then add around 5 to 10 pct increase for utilities and inflation, then costs will have to go up from 10 to 15 pct. per annum because of such.
Was that all just random speculation, or do you have any sources for those numbers?
It’s based on one uni. You may find more examples by Googling for “university budget” and looking at the budget reports of various unis.
Percentages will differ, as well as forecasted increases in cost due to inflation, etc. Revenues from various sources may also lessen reliance on tuition, and so on. But from what I gathered, the cost of education should generally go up faster than that of several businesses if most of the costs go to wages and given labor laws concerning employers’ contributions to employee benefits.
Here’s one example:
http://www.newsobserver.com/print/wednesday/other/story/1427838.html
specifically the seventh paragraph.
Again, feel free to look for university budget reports online. Percentage of costs, increases, etc., will of course, vary.
From a piece I’m shipping out today:
“in 2007 U.S. campuses spent almost $13 billion on construction. In 2008, they spent $19 billion (35th Annual Education Construction Report, National Institute of Building Sciences), representing $5400/employee, $7100 per FTE employee. In 2005-2006 US public and private universities together spent $37 billion on research ($13,700 per FTE employee) $29 billion on hospitals ($10,700 per FTE employee), $12 billion on public service ($4400 per FTE employee) and $28 billion on “auxiliary enterprises”($10,400 per FTE employee). [NCES Digest 2008]. Excluding the hospital expenses and leaving out the obviously handsome profits of the for-profit sector, US campuses are currently accumulating around $10,000 per FTE employee in endowment growth, spending about $7000 per FTE employee on new construction and allocating over $28,000 per FTE employee to research, public service and “auxiliary enterprises.”
http://nces.ed.gov/programs/digest/d08/tables/dt08_362.asp?referrer=list
http://nces.ed.gov/programs/digest/d08/tables/dt08_364.asp?referrer=list
Several of the figures can be broken down into salaries and wages, etc., and the percentages will likely mirror what I wrote. For one example, take a look at the column for instruction. Notice that salaries and wages make up almost 70 pct of total instruction expenses. If up to 30 pct is added to that 70 pct allocation due to thirteenth-month pay, general and merit increases, contributions to SSS, health plans, and pension plans, etc., then add 10 pct increases for other costs, then it is likely that tuition will have to go up 10 to 15 pct per annum.