There’s a great column this week from James Surowiecki in the New Yorker where he talks about the education bubble the U.S. might be facing. I recommend reading it if you get a chance.
Related to the column, over the weekend, I was thinking about how much more valuable a car is now than it was 20 years ago. These days, you can buy a beautiful brand new reliable car with good gas mileage with all the bells and whistles for about $12,000. When I was a kid the only people that had cars like that were the rich Dads. Today, there are rich people and lower middle class people driving around in the exact same car.
The reason for this is twofold: 1.) global competition has driven down the price of a car and 2.) car companies have become wildly more efficient, allowing them to build much more car for a relatively small amount of money.
The same can’t be said for college education. Global competitors can’t “import” a cheaper education and colleges and universities aren’t any more productive than they were 20 years ago.
Because of technology innovations and a more skilled workforce, the average worker at GM is much, much more productive than she was 20 years ago. This is not true of the average professor at Harvard. She’s still teaching about 20 students per class and it still takes 4 years to produce a diploma. At the same time, that professor is making much more than she was 20 years ago. Costs are increasing, output is not. And colleges simply pass the increasing costs onto students.
As Surowiecki notes in his column, some of this is inherent to the educational industry – it’s generally easier to improve productivity in a manufacturing environment than it is in a classroom. But it also points out the gross lack of educational innovation coming out of college campuses. The Occupiers should add that to their list of grievances.