Providing economic trends data that you do not find often has been one objective of The Middle Class Forum. As the Forum Features indicate data has been provided for escalating housing costs, health care costs and wealth disparity, as well as other long term trends. But outside of an economic report card that included a failing grade for student debt, I have not provided much data on escalating education costs.
The National Center for Public Policy and Higher Education provided some trends data for education costs that goes back to 1982. This data is important to note in several ways. According to this data education costs have skyrocket even more than housing costs or even health care costs. Here’s the graph as reported in The New York Times.
I have not been able to track down the methodology to figure out how they made their calculations. The New York Times also later presented a retraction of sorts that the data did not account for inflation. I also could have sworn the original graph included housing costs that looked inaccurate, and perhaps that’s why it disappeared. But this data still is noteworthy.
From the data I have provided in the past the relative rates of increase for medical care, median family income and consumer price index seem about right. Medical care costs have inflated by the greatest rate and so on. Thus even if the absolute values are unreliable, but the relative relationships are accurate, then education costs have inflated even more than medical care and housing costs.
Or have they? Substitution bias may be a ludicrous defense in terms of inflated housing costs, there might be some truth as applied to education. In other words, students are substituting community college for more expensive colleges, thus mitigating the inflation in education costs. I do not know if this is accounted for in the National Center’s study because I can’t track down the methodology.
But even if community colleges are providing a cushion is this really the direction we want to be heading in? Our education system has likely been the saving grace behind our economic system to date. Before the recent crash we generated so much extra capital because: 1) we’ve exploited other economies at least since the days of the Banana Republics; 2) we allowed credit to expand without productivity and 3) our progressive education has fueled increased productivity.
Unless we go about starting up a few more foreign wars our capability to exploit other economies may be tapped out. Our greed-induced credit well has dried up. Do we want to let education slip as well?
Tags: Free Market Merit, Middle Class Economics, Unbalanced Trends
