University Funding Cuts Bring Economic Failure
Budget crisis. This phrase has been seen throughout the media here in the United States, and was sparked at the national level by the protests against Governor Walker’s response to the Wisconsin budget deficit. This set off a flurry of budget panics in other states, as well as within the federal government. One of the responses to the collective budget crisis was the cut in expenditure to state funded universities. Despite the common argument that “somebody has to take the hit,” decreasing the funding of university systems should be the last resort of any budget cut, if relied upon at all, because there are serious long-term economic repercussions, including but not limited to a decrease in state and federal taxable income, as well as increased economic and social stratification and decreased economic and social mobility.
The first major problem caused is the obvious decreased university budget, which is the first step in a vicious financial circle. The 2011-12 Budget and Fee Schedules for the University of Wisconsin System details on the first page a base general purpose revenue (GPR) of $1,001,508,980—a figure $125.1 million less than the previous year, and which it later states must be reduced by an additional $250 million due to the 2011 Wisconsin Act 32 and the 2011-13 biennial budget (University of Wisconsin System). Because of the lack of state funding, a university system is forced to make up lost income by raising tuition costs and increasing segregated fees. The University of Wisconsin System, for example, had to increase tuition by 8.3% at the Madison Campus for the 2011-12 year, according to the UW System Resident Undergraduate Tuition History published on their website (University of Wisconsin System). There it can also be found that the UW Colleges campuses also hiked tuition by 5.5%, which is the first tuition hike for the 2yr colleges since the 2006-07 year (University of Wisconsin System). This, however, decreases the accessibility of higher education for people of lower income households for whom a difference of a few hundred dollars per semester is the difference between being able to attend university and not. This directly supports a decrease in social and economic mobility for many people in the U.S., but it doesn’t end there. Through decreased access to higher education, the number of attending students is thus reduced to those who can afford it, which in turn decreases the available income to the university, and thus its budget; here the cycle repeats.
In addition to tuition hikes, and to try to keep those hikes to a minimum, a university will also cut the number of classes it offers, which itself has several repercussions. First off, reducing the number of courses offered narrows the education a university can provide, thus decreasing the overall quality of education provided in the sense that a university is designed to provide a broad and well-rounded education. Second, behind every course dropped there is a professor no longer teaching it. In the case of UW Marathon County, the majority of the dropped courses were taught by adjunct professors, who taught part-time; now they’re forced to find employment elsewhere. Even full-time professors feel the budget cuts in the form of salary reductions. According to 12/9/2011 UW Board of Regents meeting, UW Eau Claire Chancellor Dr. Brian Levin-Stankevich mentioned that this is the third year in a row that staff and faculty salaries were reduced (UW System Board of Regents). He also mentioned that, because of this, and only just this year, faculty members are being recruited out of UWEC—in the case of one of their nurses, mid-semester. UWEC isn’t the only college in the UW System suffering a loss of faculty because they’re being recruited out; Chancellor Mike Lovell of Milwaukee stated that 41 of their top faculty have been recruited away (UW System Board of Regents). In the case of dropped sections of courses, classroom sizes increase, which leads to the same common arguments expressed by grade-, middle- and high school parents everywhere regarding decreased quality of education associated with increased class size. It’s certainly not difficult to see how professors’ increased work load and decreased salary may lead even the most ideal professor into a lull of apathy towards his or her work, which would in turn have the effect of decreased quality of education provided at the faculty level.
If the number of attending students decreases due to a decreasing number of students able to afford college, a new problem would arise: a decrease in students graduated. Assuming a university has a 25% 4-year graduation rate, and an undergrad student base of 8000, 2000 students are expected to graduate. Assume, however, that the student base drops to 6000. The number of graduating students decreases to 1500—an immediate drop of 500 graduating students. Simply looking at the number of graduating students doesn’t give a complete picture, however, as to a university’s ability to produce well-qualified job candidates. Chancellor Mike Levell of UW Milwaukee brought up a very important point at the 12/9/2011 UW System Board of Regents meeting when he spoke about investments made by large businesses. He brought up that they donate millions of dollars for the purpose of building facilities to train students in the specific technologies these businesses are looking for when they seek qualified candidates, but unfortunately, due to the budget cuts, they are unable to staff these facilities (UW System Board of Regents). Needless to say, if the facilities cannot be staffed, then they cannot be used for their intended purpose, which, as Chancellor Levell stated, “…raises concerns about the University’s ability to fulfill their end of the investment.” (UW System Board of Regents) Well, it’s easy to see at this point how, were state cuts in university funding to become the paradigm of balancing state budgets, this might lead to a dramatic decline in the number of college graduates being produced by public universities, which in turn decreases the overall number of qualified individuals able to fill high paid, high education jobs. Because those jobs need to be filled, companies would be forced to look overseas for qualified candidates—that is assuming the company doesn’t simply decide to offshore those jobs altogether. Given the trend over the past ten years or so of businesses offshoring jobs to save money on taxes and payroll, it would be the most likely solution for companies, financially speaking. This, however, decreases the number of taxpayers in the U.S., as it moves those jobs overseas, which in turn creates special tax loopholes that are exploited in order to reduce the taxes paid by large corporations, or in the case of GE, as published by countless news sources just this past spring, eliminate taxes completely.
The decreased accessibility to higher education caused by tuition hikes leads to its own set of consequences, two of which are 1) a direct line to the decrease in social and economic mobility for those in low income households, which leads to increased economic stratification; and 2) a shift in educational paradigm from the university to the tech school. Although I’m not ridiculing the role of the technical college, one must understand that where a university provides, or is supposed to provide, a broad and well-rounded education, a technical college is a trade school, where a student, for a significantly less price, studies for a shorter period of time to learn a specific trade, thereby entering the workforce sooner. Although this sounds like a shortcut to the American dream, many of the jobs for which a technical college prepares students are moderate to low-income positions and/or subject to very high turnover rates; many of these jobs won’t pay a high enough wage for the tech school graduate to pay taxes. As university tuitions increase, the greater the practicality of attending a technical college becomes due to their lower cost of education and quicker graduation. Needless to say, this would have great appeal to a great many people out there, and already does. It’s not difficult to see how this could potentially lead to a supply and demand issue where by a flooding of candidates for skilled service and manufacturing sectors significantly raises the supply of qualified candidates for those jobs, but the demand for candidates may not increase along with the demand for jobs. Because of this, there would be a cloud of unemployed citizens just waiting to grasp one of those jobs like a seasonal shopper looking for a parking space at Wal-Mart. Once again, we have a group of unemployed who are not paying taxes due to lack of income. Also, we see, once more, the increasing social and economic stratification, and decreasing social and economic mobility produced by preparing low to moderate-income citizens for low to moderate service sector jobs with an increasing chance for unemployment, while only those who can afford college can seek out higher education to fill the needs of businesses offering high paid, high education positions.
All in all, I think it’s easy to see that common sense would tell us that we’re only shooting ourselves in the foot by decreasing state funding of university systems, and that politicians who would seek to reduce state spending on higher education don’t understand that those costs are actually an investment on our future, not just as individuals, but an investment in the integrity of the future economic stability, American jobs and much more. Although I understand that “somebody has to take the hit,” those hits shouldn’t jeopardize the long-term stability of the economy.
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