USA Today maintains a wonderful database on sports spending for more than 220 public colleges and universities across the country (they obtained the data through public records requests). This database, along with reporting total revenue and total expenses for athletic departments, also reports data on an institution’s “total subsidy;” that is, the amount of money athletic departments receive from students (in the form of fees as distinguished from tuition payments) or directly from the institutions. About three years ago, CCAP wrote a white paper that
examined athletics subsidy patterns (for 2008) for a sample of 99 schools across the 11 FBS conferences. That report found significant differences across conferences in the proportional size of subsidies relative to total athletics revenues.
The chart below updates our 2010 analysis to include the latest data (for 2011) available from USA Today. The sample of schools included in this chart is the same sample (with the same conference affiliations) as in our 2010 paper. We kept the same conference affiliations to avoid confounding the effect of conference realignment (as opposed to the effect due solely to intra-institutional athletics-subsidy trends) on average conference subsidies (four schools in our sample—Utah, Colorado, Nebraska, and Boise State—were no longer affiliated with their 2008 conferences in 2011). The data still show enormous differences in subsidy patterns across conferences: whereas athletic subsidies accounted for three percent of total revenues in the SEC (which had more than $1 billion in revenues for 2011), athletic subsidies were more than 72 percent of athletic revenues in the MAC. Compared to the 2008 subsidy levels, the SEC, Big Ten, Big 12, ACC, Big East, and WAC saw modest decreases in subsidy levels (all less than 2.5 percentage points). The Pac-10 (now Pac-12), MWC, Conference-USA, and Sunbelt saw modest increases in the proportion of athletic revenues from subsidies (only the MWC saw an increase of more than three percentage points). The MAC, the conference with the highest level of subsidies, saw no change between 2008 and 2011.
Minnesota Public Radio’s “The Daily Circuit” featured CCAP’s new study on college graduate underemployment
in a lengthy segment yesterday. Discussants included PayScale’s Katie Bardaro and Rutgers’ Carl Van Horn.
Take a listen:
A segment for the
Wall Street Journal‘s “MarketWatch” recent featured good paying jobs which don’t require
workers to have a bachelor’s degree. For those students who may be worried about the cost of college (particularly given the risk of being underemployed after graduation), these types of jobs may be the occupational route for some students who are looking for alternatives to a job that needs a four-year degree.
In yet another dismal talking point about the job prospects for college graduates, they’ve been declining for six years.
As worrisome as the trend is, it’s probably understating the problem. It only
counts full-time workers, not part-time workers, and doesn’t address the underemployment of graduates. Especially since 2008, I’d expect
the trend to be more drastic.
The slide since 2000 could bolster Bryan Caplan’s claim that education works as a signaling mechanism; students are realizing smaller returns from higher education in the marketplace. Instead of gaining useful skills, the ever-increasing tuition teaches and prepares students for less.
Choosing to earn a graduate degree distorts the data as well; students who can’t find work after graduation decide to attend graduate school instead of joining the labor force in a low-paying, mismatched. If we look at graduate enrollment for 20-to-24-year-olds since 2006, it’s constantly increased:
I’m unsure how to explain the average wage increase during the mid-2000s; perhaps more graduates chose employment over graduate school (and more debt), whereas more graduates chose graduate school instead of low-paying employment. Thus, with fewer graduates in the job market who took low-paying jobs, the wage increase wasn’t weighed down. Or, the market simply had an increased demand for graduates; from 2003 to 2006, United States GDP grew by $2 trillion.
If universities are over-educating students for jobs that don’t exist (regardless of whether economic growth lags or increase), students become over-educated, underemployed, and debt-ridden. They successfully avoid some pain in the short run for greater pain in the long run.
In the end, however, the case for the 10K-B.A. is primarily moral, not financial. The entrepreneurs who see a way for millions to go to college affordably are the ones who understand the American dream. That dream is the opportunity to build a life through
earned success. That starts with education.
Actually, I would be more likely to agree if I were allowed to swap out the “10K-B.A.” for “MOOCs.” It’s not that I think MOOCs will someday displace
the truly elite liberal arts education (I doubt it) but that the approach MOOCs are taking (though they still have far to go) is probably the best way to expand educational access now to millions around the world who otherwise wouldn’t have anything remotely resembling the quality these online courses can offer them.
This may just be an indicator that the fiscal challenges for many institutions of higher education have faced post-financial crisis. Or it might a signal that the sector is facing
long-run structural challenges. Either way, this report from InsideHigherEd is probably not without some significance:
Moody’s Investors Service downgraded 34
higher education institutions in 2012 while upgrading only 3, the ratings agency reported Friday, an indicator of ongoing financial challenges facing colleges and universities. Analysts chalked up the downgrades to problems raising net tuition revenue, continued state budget cuts, and enrollment troubles.
In an effort to collect more information, The Chronicle of Higher Education recently expanded a project on tracking adjunct pay across the nation. The Adjunct Project relies on adjuncts to submit information about their salary to create a robust, easy-to-search database by state and university. Considering
the record of colleges and universities releasing information, the project provides access to a goldmine; the site gives analysts a peek at the market rate for adjuncts and factors affecting salaries.
One reason that could explain the dearth of information on adjuncts (and the hesitation of institutions to make the data easily accessible):
”The prospect that people will flood to California and to other higher-paying adjunct environments, if they can, is quite likely,” says Ms. Hanzimanolis, who is now teaching at three institutions: De Anza, City College of San Francisco, and Cañada.”
Making it more difficult to find salary information means that low-paying institutions don’t need to compete against high-paying institutions for adjuncts, thus keeping pay low. However, with budget cuts and staff reductions during the last few years, competition among adjuncts willing to relocate might not work ideally. Until an oversupply of adjuncts disappears (or adjuncts refuse to work for little pay), salaries won’t increase until the higher-paying institutions start to hire the above-average and average adjuncts. Or, if adjuncts leverage their position for a better job at their respective institutions, little might change.
Another bright side of this project: It could spur colleges and universities to self-report the data to protect institutional integrity. Inaccurate data could result from a lack of due diligence, deliberate errors from slighted adjuncts, or a lack of context could make the institution look worse. While not questioning the project’s integrity, large databases are prone to error. Though universities aren’t always trustworthy for data, either.
If the project eventually builds a thorough database, it could be used to compare adjunct salaries on the state level, unionized vs. non-unionized faculty, competition among universities in close proximity, etc. It’s depressing that such basic information has barriers to prevent quick and easy access; institutions of
higher education wax poetically about the call to disseminate knowledge and educate the public, but tend to obscure that part of their mission when faced with scrutiny.
As CCAP releases a new study today, the media coverage has already been strong. “Why are Recent College Graduates Underemployed? University Enrollments and Labor-Market Realities” has been discussed in USA Today, National Review, Inside Higher Ed, The Chronicle of Higher Education, CNN Money, and The Pittsburgh Tribune-Review, to
name a few.
Briefly, the study by Richard Vedder, Christopher Denhart, and Jonathan Robe finds that nearly half of recent college graduates are underemployed, holding jobs that require less than a four-year college degree. That finding, coupled with data from the Bureau of Labor Statistics, suggests that public policy directs too much state and federal funds to higher education, resulting in overinvestment and
burdening graduates with large amounts of student-loan debt.
Instead of ensuring taxi drivers and retail sales clerks hold college degrees (15 percent and 25 percent, respectively), our system of educating students and preparing them to enter the workforce might need a reformation ranging from fewer students at four-year institutions to alternative methods to verify competency.
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