NBC News: Tuition, fees, continue to rise

[dismalist]

Salaries of regular faculty have done nicely, thank you. https://www.highereddatastories.com/2014/07/changes-in-faculty-salaries-over-time.html

The brute number is higher, sure. But the purchasing power isn't: that 20k in 1975 is equivalent to 103k today; the all-faculty 32k in 1985 is 82k today; 50k in 1995 in 91k today; 66k in 2005 is 94k today; and the 77k in 2012 is 93k today. You might expect that the increased productivity drove wages down, as here; but then that's decoupled from the cost of the service to the consumer, which has increased dramatically.

[There are of course additional cost drivers. I mentioned regulation, the source of administrative bloat. In addition, one can expect that consumers -- students -- are willing to pay for more amenities than earlier students.]

Sure, but it doesn't look like the increased cost of the service is due to stagnant productivity at the instructional level, since that doesn't seem to be where the money is going.


Or am I misunderstanding something?

Click on "Constant 2013". Real wages have risen through 2012 for all except "no rank", i.e adjuncts, and perhaps "lecturer".

But this is exactly what the Baumol effect would predict -- real wages rising in education along with real wages in the rest of the economy in spite of stagnant productivity in education. If they didn't, colleges wouldn't be able to hire enough professors. Again, hiring adjuncts is an escape attempt.

I also wouldn't claim that professors are the only people in higher ed who exhibit stagnant productivity. I'm sure administrators do as well.



 

[Wahoo Redux]

I also wouldn't claim that professors are the only people in higher ed who exhibit stagnant productivity. I'm sure administrators do as well.

What "stagnant productivity" are you referring to?

What is "stagnant" about academia?

Certainly we could do things better----but what human activity couldn't be done better?

Are you one of these academics who is antagonistic towards academia, dismalist?

Generally I dismiss commentary that I think is more attitude than commentary, but I was just wondering if you could be specific here.

[dismalist]

I also wouldn't claim that professors are the only people in higher ed who exhibit stagnant productivity. I'm sure administrators do as well.

What "stagnant productivity" are you referring to?

What is "stagnant" about academia?

Certainly we could do things better----but what human activity couldn't be done better?

Are you one of these academics who is antagonistic towards academia, dismalist?

Generally I dismiss commentary that I think is more attitude than commentary, but I was just wondering if you could be specific here.

Academia is an industry like any other. All should be looked at in the same way.

Turns out there are many industries, typically service industries, which are susceptible to the cost disease.

Run a Beethoven symphony with four or five people. Get a barber with faster clippers. Teach faster and there won't be a cost disease.

[Anon1787]

So: productivity is higher, real wages are lower, but overall costs are much higher. That sounds more like a counterexample to Baumol's cost disease, at least as I remember learning it.

Productivity in education today is of course higher than say in 1950, but not nearly by as much as in say automobile manufacture or clothing manufacture. This is the cost disease.

Salaries of regular faculty have done nicely, thank you. https://www.highereddatastories.com/2014/07/changes-in-faculty-salaries-over-time.html

The adjunct share is a response to the cost disease -- an attempt to ameliorate it, made possible by the vast army of people with graduate degrees, who didn't exist in say 1950.

I don't see faculty salaries doing nicely. Your link shows that real wages dipped during the high inflation of the late 1970s (like now), rebounded, and then slowly increased. The net real wage increase was about 10% over the 37 year period (which is almost 2 generations). That seems more like wage stagnation.

[dismalist]

So: productivity is higher, real wages are lower, but overall costs are much higher. That sounds more like a counterexample to Baumol's cost disease, at least as I remember learning it.

Productivity in education today is of course higher than say in 1950, but not nearly by as much as in say automobile manufacture or clothing manufacture. This is the cost disease.

Salaries of regular faculty have done nicely, thank you. https://www.highereddatastories.com/2014/07/changes-in-faculty-salaries-over-time.html

The adjunct share is a response to the cost disease -- an attempt to ameliorate it, made possible by the vast army of people with graduate degrees, who didn't exist in say 1950.

I don't see faculty salaries doing nicely. Your link shows that real wages dipped during the high inflation of the late 1970s (like now), rebounded, and then slowly increased. The net real wage increase was about 10% over the 37 year period (which is almost 2 generations). That seems more like wage stagnation.

Compared to what?

Seriously, there is complaint that everybody's real wage stagnated on average. Right now, 10% seems like a lot.

[ciao_yall]

It takes about as much energy as it did in the old days to make a baby, and I don't hear anyone complaining about "stagnant productivity."

¯\_(ツ)_/¯

[Parasaurolophus]

Compared to what?

Seriously, there is complaint that everybody's real wage stagnated on average. Right now, 10% seems like a lot.

Even if we grant that faculty are luckier than average in having seen a 9-10% total increase in real wages over fifty years, that almost certainly just shows that huges swathes of the economy really suck for people. It's very unlikely that will show that things are generally hunky-dory.

Except that as far as I can see, appealing to Baumol actually means it's much worse than that, since we've seen such huge productivity gains across the economy in the last fifty years. Baumol's, if I remember it rightly, would predict a concommitant increase in worker salaries in those sectors as the additional profts are passed on (/down). But what we've seen is precisely that the financial gains realized from increased productivity are not passed down to ordinary workers; they're concentrated in the hands of owners and managers instead, who chase more productivity with increased automation and outsourcing, all of which has led to a race to the bottom for workers.

The same seems true in higher ed, where the increased revenues from tuition go towards lots of things, but not faculty--especially since an increasingly large share of the instructional workforce is composed of underpaid part-timers. From what I saw with an admittedly cursory search of studies on tuition costs in higher ed, the share attributable to Baumol's seems to be around 10%. Which... isn't all that much.

[dismalist]

Compared to what?

Seriously, there is complaint that everybody's real wage stagnated on average. Right now, 10% seems like a lot.

Even if we grant that faculty are luckier than average in having seen a 9-10% total increase in real wages over fifty years, that almost certainly just shows that huges swathes of the economy really suck for people. It's very unlikely that will show that things are generally hunky-dory.

Except that as far as I can see, appealing to Baumol actually means it's much worse than that, since we've seen such huge productivity gains across the economy in the last fifty years. Baumol's, if I remember it rightly, would predict a concommitant increase in worker salaries in those sectors as the additional profts are passed on (/down). But what we've seen is precisely that the financial gains realized from increased productivity are not passed down to ordinary workers; they're concentrated in the hands of owners and managers instead, who chase more productivity with increased automation and outsourcing, all of which has led to a race to the bottom for workers.

The same seems true in higher ed, where the increased revenues from tuition go towards lots of things, but not faculty--especially since an increasingly large share of the instructional workforce is composed of underpaid part-timers. From what I saw with an admittedly cursory search of studies on tuition costs in higher ed, the share attributable to Baumol's seems to be around 10%. Which... isn't all that much.

Except that as far as I can see, appealing to Baumol actually means it's much worse than that ...

Yup. Regulation and amenities.

But what we've seen is precisely that the financial gains realized from increased productivity are not passed down to ordinary workers; they're concentrated in the hands of owners and managers instead, who chase more productivity with increased automation and outsourcing, all of which has led to a race to the bottom for workers.

Yup. Capitalism has got to go! :-)

[Durchlässigkeitsbeiwert]

Academia is an industry like any other. All should be looked at in the same way.

Turns out there are many industries, typically service industries, which are susceptible to the cost disease.

Run a Beethoven symphony with four or five people. Get a barber with faster clippers. Teach faster and there won't be a cost disease.

These examples [intentionally?] obscure the full picture.

It indeed takes the same number of performers to "run a Beethoven symphony", but nowadays a single performance can reach millions of listeners. Before talkies, many cinemas used to have live music performances to accompany movies. Afterwards, the same effect was achieved by having a movie score recorded once -  a rise of productivity by a factor of many thousands (that definitely hasn't translated into wages).

Similarly, claims that teaching productivity is stagnant seem to contradict existence of a multi-billion LMS market. If LMSs do not improve productivity enough to offset their costs, there is definitely no point to keep paying for them.

[marshwiggle]

Even if we grant that faculty are luckier than average in having seen a 9-10% total increase in real wages over fifty years, that almost certainly just shows that huges swathes of the economy really suck for people. It's very unlikely that will show that things are generally hunky-dory.

A 10% increase in real wages means "relative to other workers". Should faculty make 5x what unskilled workers make? 10x? 50x? If real wages continue to increase, it means that employment category is increasing in value over everyone else. Eventually, they will be higher paid than anyone else. That is unsustainable.

Academia is an industry like any other. All should be looked at in the same way.

Turns out there are many industries, typically service industries, which are susceptible to the cost disease.

Run a Beethoven symphony with four or five people. Get a barber with faster clippers. Teach faster and there won't be a cost disease.

These examples [intentionally?] obscure the full picture.

It indeed takes the same number of performers to "run a Beethoven symphony", but nowadays a single performance can reach millions of listeners. Before talkies, many cinemas used to have live music performances to accompany movies. Afterwards, the same effect was achieved by having a movie score recorded once -  a rise of productivity by a factor of many thousands (that definitely hasn't translated into wages).

Similarly, claims that teaching productivity is stagnant seem to contradict existence of a multi-billion LMS market. If LMSs do not improve productivity enough to offset their costs, there is definitely no point to keep paying for them.

This brings up the only realistic way to have big gains in real wages; if teaching becomes much more remote and automated, so every prof can teach hundreds (or more) of students, then real wages can rise a lot. (However, the downside is that there will be many fewer profs needed; that's where the money comes from.)

[Durchlässigkeitsbeiwert]

A 10% increase in real wages means "relative to other workers". Should faculty make 5x what unskilled workers make? 10x? 50x? If real wages continue to increase, it means that employment category is increasing in value over everyone else. Eventually, they will be higher paid than anyone else. That is unsustainable.

It does not. Otherwise average real wage now would have been exactly the same as 1789.
If total output of the economy increases by 10% everybody can have 10% rise in real wage even if the distribution pattern stays the same.

This brings up the only realistic way to have big gains in real wages; if teaching becomes much more remote and automated, so every prof can teach hundreds (or more) of students, then real wages can rise a lot. (However, the downside is that there will be many fewer profs needed; that's where the money comes from.)

This assumes that productivity gains directly accrue to the people working in the industries responsible for them. This is rarely true.

Regarding productivity in the education:
- "teaching productivity" is not the only output. There were impressive gains in the "research productivity" in the recent decades. In some places people tenured 30 years ago on portfolios thinner than present-day job applicants.
- at current prices, teaching-only faculty (lecturers, adjuncts etc) are normally paid a very small portion of a tuition collected for even modestly-sized class. So, productivity bottlenecks in academia seems to be outside the classroom.

[ciao_yall]

But what we've seen is precisely that the financial gains realized from increased productivity are not passed down to ordinary workers; they're concentrated in the hands of owners and managers instead, who chase more productivity with increased automation and outsourcing, all of which has led to a race to the bottom for workers.

Yup. Capitalism has got to go! :-)

To be replaced with full-blown Communisim or Socialism in which a few well-placed corrupt oligarchs secretly hold all the wealth? Sounds lovely.

[marshwiggle]

A 10% increase in real wages means "relative to other workers". Should faculty make 5x what unskilled workers make? 10x? 50x? If real wages continue to increase, it means that employment category is increasing in value over everyone else. Eventually, they will be higher paid than anyone else. That is unsustainable.

It does not. Otherwise average real wage now would have been exactly the same as 1789.
If total output of the economy increases by 10% everybody can have 10% rise in real wage even if the distribution pattern stays the same.

Something has to get cheaper. If it's goods, then that requires manufacturing productivity to increase. If it's service, labour productivity has to increase. My plumber and I can both have 10% real gains IF my plumber can do 10% more jobs in the same amount of time. If the population is stable, that means 10% fewer plumbers.

This brings up the only realistic way to have big gains in real wages; if teaching becomes much more remote and automated, so every prof can teach hundreds (or more) of students, then real wages can rise a lot. (However, the downside is that there will be many fewer profs needed; that's where the money comes from.)

This assumes that productivity gains directly accrue to the people working in the industries responsible for them. This is rarely true.

Regarding productivity in the education:
- "teaching productivity" is not the only output. There were impressive gains in the "research productivity" in the recent decades. In some places people tenured 30 years ago on portfolios thinner than present-day job applicants.
- at current prices, teaching-only faculty (lecturers, adjuncts etc) are normally paid a very small portion of a tuition collected for even modestly-sized class. So, productivity bottlenecks in academia seems to be outside the classroom.

Teaching productivity has been limited by the expansion of the student population. Decades ago, when education was more selective, less resources were required per student. (It's like oil; as the easier-to-access sources have dried up, sources like shales and tar sands require much more effort to extract, which keeps prices from falling.)

My hunch is that the institutions that are most selective, and thus have been least affected by the changes to the general student population, have probably seen real wages rise by more than the average, for that reason. The places taking the weakest students will have seen below average real gains.

[dismalist]

Academia is an industry like any other. All should be looked at in the same way.

Turns out there are many industries, typically service industries, which are susceptible to the cost disease.

Run a Beethoven symphony with four or five people. Get a barber with faster clippers. Teach faster and there won't be a cost disease.

These examples [intentionally?] obscure the full picture.

It indeed takes the same number of performers to "run a Beethoven symphony", but nowadays a single performance can reach millions of listeners. Before talkies, many cinemas used to have live music performances to accompany movies. Afterwards, the same effect was achieved by having a movie score recorded once -  a rise of productivity by a factor of many thousands (that definitely hasn't translated into wages).

Similarly, claims that teaching productivity is stagnant seem to contradict existence of a multi-billion LMS market. If LMSs do not improve productivity enough to offset their costs, there is definitely no point to keep paying for them.

That's true about Beethoven symphonies. My sense is that technological improvements in higher ed are another amenity. That is nice for students and they are paying for them, but do not have effects like music reproduction technology.

This brings up the only realistic way to have big gains in real wages; if teaching becomes much more remote and automated, so every prof can teach hundreds (or more) of students, then real wages can rise a lot. (However, the downside is that there will be many fewer profs needed; that's where the money comes from.)

This assumes that productivity gains directly accrue to the people working in the industries responsible for them. This is rarely true.

Regarding productivity in the education:
- "teaching productivity" is not the only output. There were impressive gains in the "research productivity" in the recent decades. In some places people tenured 30 years ago on portfolios thinner than present-day job applicants.
- at current prices, teaching-only faculty (lecturers, adjuncts etc) are normally paid a very small portion of a tuition collected for even modestly-sized class. So, productivity bottlenecks in academia seems to be outside the classroom.

Precisely. The Baumol effect is to explain price changes, not wage changes. Wages in education are determined outside education. The stagnant productivity industry has to raise prices to pay those wages.

But I don't see gains in research productivity either. It's not numbers of publications one is after, it's the number of important ones. That's not anybody's fault. It just means one gets the low hanging fruit first.

In any case, labor productivity in education refers to all employees, not just faculty. And I don't see administrators' productivity improving while their numbers are rising.

[marshwiggle]

Similarly, claims that teaching productivity is stagnant seem to contradict existence of a multi-billion LMS market. If LMSs do not improve productivity enough to offset their costs, there is definitely no point to keep paying for them.

That's true about Beethoven symphonies. My sense is that technological improvements in higher ed are another amenity. That is nice for students and they are paying for them, but do not have effects like music reproduction technology.

For courses that use the LMS for completely automated grading, then there is the same potential for scale as for music reproduction. However, as long as grading has to be done by a human, then it scales linearly with the number of students, which prevents gains in productivity.

Saving a bit of administrative time, which the LMS may achieve, will result in very modest gains.