Thursday, August 21, 2008

Higher Ed Task Force Final Report Fatally Flawed

The Task Force on Higher Education has released its final report. They assumed incorrect premises, asked the wrong questions, and therefore made the wrong recommendations. As usual, the recommendations were not just wrong, but expensive as well. It is a 59 page report, and I simply don't have time to type out my contrarian take on it. Instead of typing out this response, I have done an audio file which is about 45 minutes long, but this is important.


Anonymous Anonymous said...

I took the ~45 min. to listen to your commentary and while I agree with some of what you are saying, I think some of your own premises may be likewise incorrectly assumed. Granted, when the number of college graduates exceeds the number of jobs requiring a college degree, and there is competition for those jobs, some grads may not be able to secure jobs, and thus may go elsewhere. However, it is flawed reasoning to automatically assume that every single college graduate will go to work for someone else. Some people without a degree may land in a trade such as an auto mechanic, plumber, painter, bricklayer, electrician, or welder (all of which we need), and work for someone else, whereas with a degree, and the discipline it takes to acquire it, they could become entrepreneurs and start their own businesses, such as manufacturing of auto parts, pipes, paint, bricks, wires, or welding equipment. All of those things require someone to start a business making them. An electrician cannot do his job without wires, fixtures & fuse boxes; automobiles cannot be assembled without parts. Other people may acquire a degree with the goal of returning home to work for a family-owned and operated business. The point is, not everyone with a college degree ends up as an employee of a business owned by someone else.
I do agree that colleges seek at least some of their customer base (students, pupils, tuition-payors, patrons; pick a name) from a market within which not everyone is qualified to be, and I also agree the schools continue to seek more and more funds from the State (i.e. you & I), which I will talk more about below. Some who require remediation prior or upon entry to college may not be suited, at least initially, for college. However, that doesn't necessarily mean that acquiring a college degree won't help them. Some may catch fire in the process and finish great. For others, obtaining a college degree could inspire them to become an entrepreneur, small business owner, or find a niche in the market to fill.
With regard to funding the schools, yes, the State is, to some degree, subsidizing out-of-state companies when in-state grads leave to secure employment with them. Moreover, one big reason schools continue to seek more State funds is because not all the funds they receive are spent directly on the teaching of students. Some of the funds are spent on athletics, some on professorial travel/pet projects, and some on Presidential mansions. Spending-per-student statisitics are often misleading because they don't reflect the true amount spent directly on student learning. The key is not solely more jobs as seems to be the theme of your commentary. The key is both jobs AND a qualified workforce to fill those jobs. If there were more jobs that require a degree than workers to fill them, then we've accomplished nothing, just as you say we have with more grads than jobs, so we're then back to square one. Both jobs and qualified people for those jobs are necessary ingredients for the market to correctly function. And frequently college grads are the ones who create the jobs, then seek qualified workers to fill them. Where is the proper balance? I don't know, but more college graduates, if that is the sole goal, may not be what we should be aiming for, as you say. A proper balance of ensuring creation of a sufficient number of jobs and producing enough grads to fill them should perhaps be the goal.

3:31 PM, August 22, 2008  
Blogger Mark Moore (Moderator) said...

First of all thank you for taking the time to listen, and then sharing your thoughts.

Several of your points I concur with, and almost added some of them to the audio file, for example that university "costs" are increasingly not related to classroom instruction...

Now I can't quite see the connection in your example where a person gets a college degree but cannot find anyone to hire starts their own business instead. That is, I agree it can happen, but I don't see the college degree as essential to that process.

To the contrary, their business would be better capitalized if they took the money they spent on the un-used or marginally used college degree and plowed it into their business. Bill Gates and Steve Jobs dropped out of college as soon as they found out about computers. Rush Limbaugh did not need a college degree to be an entertaining (not necessarily serious) talk show host.

For an entrepreneur, often the years and dollars spent on university are largely wasted ones. A college degree is good for people who are being hired by others because it is a good sorting tool. It is a quick way to rule people in or out. That is, it shows potential employers a person has a certain amount of ability and determination. Since an entrepreneur hires himself, he does not need that sheepskin to tell himself that.

6:05 PM, August 22, 2008  
Anonymous Anonymous said...

While I agree that not every entrepreneur needs a college degree, and there are many examples of successful drop-outs (the founder of Holiday Inn dropped out in the 8th grade), I think you would agree that pretty much everyone in the workplace needs at least some basic education and skills, such as the ability to read, write and do math. Should we scrap all education and just tell everyone to take the money they would've spent on books & tuition and become an entrepreneur like Gates, Jobs or Limbaugh? Of course not. So the question then becomes where do we draw the line on when someone stops their formal education and starts their trade, work, or career. The building of hospitals, computers, water treatment plants, sewer systems, electric generation plants, tanks, missiles, sewing machines, batteries, automobiles, and pretty much all other widgets requires engineering skills that are obtained mostly in college. Hospitals, after they're built by college-educated engineers, then require college-trained doctors, nurses and technicians to work in them. Gates and Jobs could not do what they do without college-educated engineers somewhere figuring out and then building microprocessors and display screens, along with college-educated marketers to sell them to the manufacturers who then assemble all the proper parts into a functioning computer, which are in turn marketed to the public by mostly college-educated people. Limbaugh could not do what he does without college-educated radio engineers figuring out how to transmit his program across our fruited plain every day. The people who run Arkansas' institutions of higher learning are simply doing what they have been put in place to do: increase enrollment at manageable rates (even if some enrollees may not be qualified to enroll), acquire as much money as possible for their school (from donations, tuition, & legislative funding to fund Presidential mansions, libraries, classrooms, dormitories, athletic arenas, etc.), try to keep their staff & alumni happy, and hope that graduation rates don't fall below what the public (who pay for the mansions, facilities and salaries) deems acceptable. They don't exist to build manufacturing plants and/or service sectors to create jobs for their grads. The people who do those things are also doing exactly what they should be doing: trying to find qualified workers without having to spend exorbitant amounts of money training them. When the two collide and one exceeds the other, then it implodes. More college graduates is not per se bad, but cranking out more grads, qualified or not, than the market can absorb is problematic, particularly when the school promises jobs upon graduation knowing there are few or no jobs. Two law schools in Arkansas (primarily a farming and agricultural state with no veterinary school) might be an example. An excessive number of two-year colleges might be another.

10:39 PM, August 22, 2008  
Blogger Mark Moore (Moderator) said...

I think that is a fair look at things. I believe the answer is that we need a good system of community schools that teach the fundamentals, which includes how to use some non-industry specific computer software.

Once you get to training for a specific career (which SHOULD mean post secondary), the financial burden to educate the work force should shift to the individual and to the specific industry.

The free market can only insure rational allocation of educational resources when the costs are born by those getting the benefits. Right now, too large a share of costs are paid by the taxpayers, leaving the individuals and especially the industries to get what amounts to subsidies. Subsidies will always result in over-production.

4:57 PM, August 23, 2008  
Blogger Mark Moore (Moderator) said...

PS- did you see the article just above this one? I assure you that the Superior Wheel plant did not shut down it's plant in Pittsburgh Kansas (home of a state university) and lay off folks in its Fayetteville plant (home of another university) because it had better access to an educated workforce in its new plant in Mexico! They are letting the stupid taxpayers of the U.S. educate their workforce, then moving them down there. WORKFORCE IS MOBILE. Other infrastructure is not.

8:24 AM, August 24, 2008  
Anonymous Anonymous said...

Are you saying that Superior is closing a plant and/or laying off workers and moving those workers with them? Some of the workforce may go with them, but if all of them go, then why would they do that? Under the scenario you describe, they could keep going here. Labor is likely their highest expense. I believe what's really happening is they are ridding themselves of high-paid workers (with costly benefits, mostly taxes & healthcare) here and hiring lower-paid workers there. They're simply trying to lower their labor costs; the costs of the raw materials (and shipping costs to get them there) to build their products likely won't change. I would respectfully submit that it has very little to do with NAFTA. The fact is, due to over-regulation (IRS, EEOC, OSHA, EPA, ERISA, DOT on the federal level and DF&A, DEQ, & ESD on the state level, to name just a few) the cost of doing business elsewhere is lower. It's not NAFTA that's the main problem; it's the other regulatory burdens here. Is that fair? Maybe not, but until other countries, like Mexico, agree to impose the same regulatory burdens on manufacturers there (which isn't likely & KYOTO won't do it), the cost of doing business in those countries will be lower. NAFTA may be partly to blame (it's probably more complicated than we can describe in this space) but I think the bulk of the blame lies with regulatory burdens.
On another note, the ADG reported this morning that UA Chancellor Gearhart "will take a busload of UA deans, vice chancellors, faculty members and student leaders, and others to a two-day retreat atop Petit Jean Mountain near Morrilton" apparently as part of "listening tours" to hear ideas on where the Fayetteville campus should be in the next decade or so. Isn't that swell, a trip which will probably benefit UA students and/or their parents paying the tab very little, if any. A two-day, all-expenses paid (by you & I) trip to Petit Jean Mountain to hear ideas!
I still can't figure out why UA purchased the Winrock retreat in the first place. How does that relate to educating my child in Fayetteville or any other UA branch? Do these UA eggheads need to "clear their minds" atop Petit Jean in order to teach? We are already funding plenty of UA Experiment Stations around the State to do research. My guess is the UA eggheads needed a vacation spot so they found one to buy with the taxpayer's dime. Keep this in mind the next time the UA Board asks for a tuition increase, which will probably be very soon.

12:06 PM, August 24, 2008  
Anonymous Anonymous said...

Come now, the point was that the college educated force was mobile, not the line workers.

5:22 AM, August 25, 2008  
Anonymous Anonymous said...

No, the point was that NAFTA is responsible for Superior closing their US plant(s) and moving them elsewhere. While NAFTA may contribute some to them doing so (I'll concede it opens our markets), it's not the main obstacle to remaining here. The main obstacle is the high cost of doing business here in having to comply with excessive regulatory and tax burdens.

9:03 AM, August 25, 2008  
Blogger Mark Moore (Moderator) said...

The point was it was not the slowing economy, it is a result of poor public policy. That includes NAFTA, and excessive taxes and regulatory burdens, and especially the suicidal madness of both together.

Now some of those "regulatory burdens" pollution and safety regulations ought to be there. A factory should not just be able to dump pollutants in the lake that cause people to get sick. That is called "cost shifting". That is, they make a profit because some of their true costs of doing business are shifted to someone else, who takes the loss. It is a sophisticated form of theft.

One problem with NAFTA is that the Mexicans will claim they have the same standards in place, but they don't. It gives factories down there an advantage not just based on excessive regulatory burdens, but legitimate regulatory burdens that bar cost-shifting.

5:07 AM, August 26, 2008  

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