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Wednesday, June 3, 2009

A Little Learning is an Expensive Thing

When I enrolled as a Freshman at Harvard, in September of 1950, the tuition was $400. Not $400 for a credit, or for a course, or for a semester, but $400 for the entire year. When I graduated in 1953, the tuition just had been raised to $600. Although a good job, taking inventory a Robert Hall clothing store, paid only $1.25 an hour, while babysitting paid seventy-five cents, a student could still think of working his or her way through college. If you were politically connected, you could even get a job in the Summer on a road gang building the Mass Turnpike, and that paid real money – six or seven dollars an hour. The Harvard class of 2013, which will enroll this coming September, is looking at annual tuition of $33,696. Unless you win American Idol, working your way through Harvard is no longer an option. What on earth is going on?

Well, first of all, the dollar isn’t worth what it was in 1950. Using the calculator function on the home page of the Bureau of Labor Statistics, we find that my $400 tuition is the equivalent of a tuition of $3539.25 today. But that still means that Harvard tuition, after adjusting for inflation, has risen 952%!

Why does it cost Harvard almost ten times as much now as it did in 1950 to educate an undergraduate? To be sure, there are some fields, such as evolutionary biology, in which much more is known now than was known then, and we might imagine that it costs more to pass that improved knowledge on to the next generation, but there are other fields, such as Sociology and Economics, in which the quantum of knowledge has markedly decreased. In my own field of Philosophy, noticeable changes in what is known usually occur only every half millennium or so. We need a better explanation.

We might imagine that the faculty was badly underpaid in 1950, and has simply managed in the interim to rectify a gross injustice, but that doesn’t seem to be true either. When I started my teaching career in 1958 as an Instructor in Philosophy and General Education at Harvard, after earning my doctorate and spending six months on active duty at Fort Dix and Fort Devens, I was paid $6,500 a year. The same BLS calculator tells us that this is the equivalent of a salary of $47,960.55 today. An Instructor then was the equivalent of an Assistant Professor today [i.e., someone with a new Ph. D.], and the low end of the Assistant Professorial pay scale these days at Harvard [and I was, I assure you, at the low end of the Instructor scale in 1958] is somewhere in the mid 50’s. So some small portion of the whopping increase in Harvard tuition can be accounted for by a modest rise in the real wages of the professoriate.

Still, 952% is quite a jump in the cost adjusted price of tuition. How do we explain it?

` Several years ago, when the high cost of elite education was once again the subject of some hand wringing in journals of opinion, I came across a Harvard administrator’s justification for the increase that enthralled me. He pointed out that the share of household income required to pay for a Harvard education had not risen, and he seemed to think that constituted some sort of justification for the soaring tuition costs. What an extraordinary argument. In effect, he was saying that Harvard had a right to a certain share of a household’s income, so that any gains in real wealth that families might have experienced, as a consequence of sending more members of the household into the labor market, or as a result of increased worker productivity, should rightfully be taken away by Harvard.

Here is another possible explanation – Harvard will deny it, of course, if they deigned to notice my humble blog, but it is at least worth considering. The year I applied to Harvard, 2597 other young men applied [Radcliffe was then a separate entity]. Sixteen hundred fifty-one, or roughly 64%, were admitted, and 1173 actually showed up in September. [I looked this up once when writing an article on “College as Rat Race” for Dissent magazine.] Twenty-nine thousand young men and women applied for admission to the class of 2013. Seven percent, or twenty-one hundred, were admitted, to form what will be a class of sixteen hundred fifty-eight.

Elementary neo-classical economics, of the sort routinely taught at Harvard and elsewhere, predicts that a dramatic rise in demand for a product whose supply is held constant by a monopoly will result in a sharp rise in price. In short, Harvard charges that sort of tuition for its degree because it can.

Is a Harvard education worth $135,000 [assuming, against all the evidence, that Harvard does not raise tuition for the class of 2013 along the way]? That depends, of course, on how one evaluates an education. As an intellectual experience, the answer is of course no. But as an economic investment? Almost certainly yes. The real purpose of higher education in America today is to sort each age cohort of young people into the available jobs in the economy. Since there are relatively few jobs with high wages and good benefits, and many, many more young people capable of filling those jobs than there is room for [see my previous blogpost on this subject], elite college degrees are used as filters. Regardless of what one has learned as an undergraduate, or indeed whether one has learned anything, a Harvard degree gives one a big advantage in bagging one of those good jobs. Everyone knows this, so parents are willing to sacrifice greatly to secure a place for a son or daughter in the Freshman class at one of the handful of elite schools.

This is one of the reasons I walked away from a professorship at Columbia thirty-eight years ago and spent the remainder of my career at a big, sloppy second tier public university with – as it turned out – the country’s best Marxist Economics department and the best Afro-American Studies department as well. It was the best professional decision I ever made.

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