Keynesian Economic Theory As Applied to 21st Century Higher Education

I spent Labor Day of 2017 traveling the American South, primarily a stretch of marshes and swampland called the Low-Country. I made for Savannah, and stopped to see some old estates and cobble stone streets. The Riverfront was a bustle with locals and tourists to celebrate the 4th annual Bacon Fest. I didn’t stay long, I wanted to keep moving. Crossing over the Savannah River and into South Carolina on Highway 17, the pathways start to become shaded by low hanging trees and even lower Spanish Moss. The humidity is so thick you could cut it with an oyster shell. And there’s this smell. It’s pungent, salty, and downright rancid at some intervals. It comes from the pluff mud, the dark marsh soil left behind after the tide recedes. Each island, beach town and state park are only accessible by way of zig-zagging along the low-country coast.

I spent the night in North Charleston at a truck stop so I could shower in the morning and make a fresh start. Alongside these two lane roads and state highways are any number of stereotypical findings. Fruit and veggie stands, maintained by a married couple with nothing but a piece of paper in their hands to beat the excruciating heat. Auto body shops next to scrap yards next to mobile homes next to RVs. I couldn’t figure out where one would work and live out of those four options, but to each their own. Signs that indicated where you could find “Acres For Sale” or “Oyster Shell Recycling” and even “Clean Dirt.” Of course, every few miles you find a gas station and a dollar store and about a dozen churches. For Protestant Christians on the South Carolina coast, there is no shortage of places to go for worship. In between all of this, you discover little soul food dives and adorable corner stores. I made a pit stop at the Carolina Cider Company in Yemassee before I turned to go south toward Beaufort. Artisanal pastries and handcrafted soaps give you something to sniff on while you shop. I took home some Praline Pecans and a jug of Peach Cider. I wasn’t exactly focused, though. I was still digesting what I had been listening to on the radio. NPR had a special hour long discussion about the state of the economy and the American workforce on a program called The Takeaway from WNYC.

I encourage anyone that’s interested to listen to the podcast themselves, but I have taken the liberty of annotating and summarizing the highlights. The economy itself is steady, but not spectacular. The labor market is strong, but productivity in the workforce is weak. Unemployment is still holding firm at about 4.5%, a sign of continuity between Obama and Trump. President Trump can, and frequently does, tout the high marks in the stock market as a sign of economic growth, but the Dow Jones and the Nasdaq do not translate into the real economy. Wages have remained stagnant, with 78% of full time workers saying they live paycheck to paycheck. That number is up from 75% last year. As Congress sets out to do tax reform, it’s important to note that the GOP plan for big tax cuts won’t dramatically increase growth. Tax cuts stimulate the demand side of the equation, and do not necessarily supply a high-paying factory job to blue collar workers in small towns. Furthermore, those factory jobs might well be good for the small town and the locality, but not for the economy.

Next on the docket is some downright frightening facts and figures about post-secondary education. Employers aren’t seeing the necessary technical skills or critical skills in the incoming workforce. One of the guests on the program ascribed that to the fact that the nature of work has changed but the nature of school hasn’t. In fact, she said, “everything has changed” except the established 4 year institutions. Now, community colleges and less selective, regional 4 year colleges are leading the way for the “new traditional” student. By 2018, according to the Bureau of Labor Statistics, 63% of all jobs will require some post-secondary education. One third of undergraduates are adults, 70% of undergraduates work, 1 in 5 work full-time jobs. Part-time students make up more than one third of undergrads, and most of them are working full time. About 36 million Americans have credits but no credential, most of them carry some form of debt. A full 50% of all undergraduates enter with remediation needs.

So, the age-old thinking that education is a path to a better future regardless of accident of birth or circumstance is quickly dwindling. And yet the structure of Higher-Ed is proving remarkably durable. Institutions are out of step and struggling to rethink students and faculty. The places that are innovative in this regard offer structured programs with the end in mind. At community colleges, these are called guided pathways. The unsung heroes of the American economy are the regional 4 year campuses that are less selective and more realistic, because they recognized early and responded to the critical shift: you can no longer have separate educations for work and educations for life, you need both. The days of going to college and wandering the cafeteria to find oneself are over, and the slowest ones to change their thinking on this are the research institutions, the Big 10 schools. The Michigan States and the U of Ms of the world serve slightly different purposes and depend on slightly different revenue streams, primarily high-dollar private donors for research investment. So they may not have the greatest incentive to change, but the entire college model is changing quickly. Most students are shouldering the debt themselves, many have children of their own. How long do you imagine people with families to feed and bills to pay are going to wait for a tenured professor to find their flash drive?

“Did you want a bag?” A sweet gray haired woman was asking me from behind the counter.

“Yeah” I said under my breath, looking over at the fresh pies that illuminated the case.

“Let me asking you something,” I leaned on the counter with both my elbows. “How’s the economy down here? How’s business been?”

“Well,” she sighed. “It’s usually better during spring and autumn. Cooler weather gives people more reason to take the drive. But to tell the truth, this whole week has been real busy. Not just this morning neither, the past week too…people be in and out all day long. And you know what I think it is?”

She’s leaning toward me now, and took one look around the place before saying “I think it was that hurricane. It wiped out parts of the Gulf that are usual vacation spots. I think people ended up down here because of the flood waters out there.”

I giggled, raised to her my pint of peach cider and said “well, here’s to the high tide.”

Cheers,

Daniel J. Neebes

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