The aphorism concerning Unintended Consequences is both well-worn and a little inaccurate; it would be better worded as Unforeseen Consequences, perhaps implying a bit of laziness on the part of those initiating the activity causing them, and we’ll not explore the more frightening Unforeseeable Consequences, a dig at certain folks’ omniscience.
So recently a few trends have come up and lately I connected the dots. This is not, of course, science, for which I have neither time nor funds to dedicate, but merely a speculative connection of events, and how the consequences have come around to affect a national industry. I shall lay the activities in chronological order.
We start with college tuition, which in the 1970s averaged around $10K in 2015 dollars according to the College Board web site:
By 2015, tuition was $32.5K, a jump of 200% in constant dollars. This was caused by, to quote University of Minnesota President Eric Kaler, at least with reference to his institution, but no doubt applicable in general,
… disinvestment in the University of Minnesota by the state. Our state appropriation was cut dramatically and those dollars were replaced with increased tuition dollars. [also discussed here.]
This Treasury Department blog posting supports Kaler’s contention: state and local support of has declined over the years.
The level of state funding per student at four-year, public colleges has also declined. In 1986, four-year, public institutions received approximately $10,726 in state support per full-time equivalent student. By 2009, state funding had declined to $8,655 per student. Historically, private schools have depended heavily on tuition and endowments while public institutions are primarily funded by state and local funds as well as tuition. However, state funding for public higher education has declined steadily as a share of the revenue of these institutions since the 1980s. Figure 11 shows that state and local funds to four-year, public schools have declined from almost 60 percent of revenue in the late 1980s to slightly below 40 percent in recent years.
Notes: Based on data from IPEDS and the Delta Cost Project. Total revenue decreased in recent years in part due to falling endowments. As a result, even though government support became less generous during this period, it increased slightly as a proportion of total revenues. The right panel is measured in 2011 dollars. Source: Treasury.gov
And concomitant student debt. While the numbers are not always entirely clear, Daniel A. Austin provides a summary in the Santa Clara Law Review:
The amount of debt per student and the percentage of students borrowing for education have both expanded dramatically in recent decades. In 1989–90, students graduating from public four-year colleges averaged $8200 in debt, while average debt at private colleges was $10,600.34 In 1999 and 2000, the amounts increased to $15,100 and $16,500, respectively. But over the decade, 2000–02 through 2010–11, federal loans per full-time undergraduate student shot up at an average rate of 5% a year after adjusting for inflation, for a total increase of 57% for the decade.36 As of 2010, 55% of students at public four-year colleges had borrowed for education, with an average debt of $22,000.37 Of students earning bachelor’s degrees at private nonprofit institutions, about 66% had borrowed for their education, and the typical debt load was $28,100. Averaging all four-year nonprofit schools, the mean debt per student in 2010 was $25,250.39 A typical undergraduate student received $4907 in federal loans in 2010–11, while the average graduate student received $16,423 in federal loans during the same period. For graduates obtaining professional degrees, the borrowing rate was much higher, with some 79% having obtained loans for school as of 2007–08. The plight of law school graduates, with an average debt load of $98,500 at graduation in 2010, has been well-noted in the press. And none of the numbers cited here include private loans, which are more difficult to track. [references removed by me.]
At a recent lunch, some colleagues and I were noodling about recent generations and their behavior. One, whose son recently left the Army, was somewhat distraught that not even his son’s service had focused him on what his father considered important: family and a house. Another colleague was puzzled by their disdain for that rampart of the American Dream:
The car.
Now, I don’t share his attachment to vehicles; despite owning two vehicles nearly all of my adult life, I agree with my late father’s characterization: they’re moving money pits. But those who are just coming of an age where they can drive are staying away in droves from cars, as The Atlantic’s CityLab explores:
The ongoing discussion about Millennial driving trends is not about whether they’re declining, but why. It’s clear to all that young people are driving less today than they did in the past. But the reasons for these shifts in car use are what remain locked in seemingly endless debate.
Two theories lead the charge. The first is that demographic or economic factors are primarily to blame. Since so many Millennials are out of work or delaying the start of family life, they have less daily need to drive. That certainly makes sense. The second idea suggests that young people fundamentally have a different attitude toward cars than previous generations did at that age, instead preferring to live in the city longer and travel by multiple alternative modes. That’s also a logical conclusion, if a bit harder to quantify.
But to me, this ignores the greater context. What role is educational debt, existing and projected, playing in a simple decision: Can I afford to buy a vehicle which then requires fuel, maintenance, insurance, and potentially repairs? If you are looking at going to college and potentially accumulating in excess of $100,000 or even $200,000, then why buy a vehicle? As public transit continues to improve, and cities become less and less friendly to cars, the idea that a vehicle is part of your identity becomes increasingly risible.
This lets me quote an article which makes me laugh, written by Lloyd Alter for Mother Nature Network:
At a New Year’s Eve party, I was talking to a business exec running a tech company located in a suburban office building. He was complaining about the number of times he would interview a person who would say he wasn’t crazy about taking the subway and then a bus all the way out to the ‘burbs every day. The exec got increasingly frustrated and at one point responded “So get a car! That’s what grown-ups do when they get jobs!” The candidate responded that he didn’t know how to drive, didn’t have a license, and would keep looking for a job that allowed him to use a bike or transit. This scenario has played out more than once, so the company is now looking for new office space downtown.
And, finally, to the last point in this chain, also pointed to by Lloyd Alter, although now he’s simply pointing at a report:
Got $850 to spare? Then you can buy a study from Standard & Poors called Economic Research: Millennials Are Creating Unsafe Conditions On U.S. Roads–But Not In The Way You Might Think. It blames young people for the upcoming collapse of American infrastructure. As Richard Masoner of Cyclicious aptly puts it, “roads are becoming more dangerous because you crazy Millennials don’t drive as much.” And apparently when you do drive, you buy smaller cars that use less gas. According to S&P, “This, in turn, has curbed revenues from the federal gasoline tax, the primary source of funding for the Federal Highway Trust Fund, which is the backbone of the country’s surface transportation infrastructure.” It gets worse; those millennials just might crash the entire economy! The Chief Economist of S&P is quoted in Denver Business Journal:
This drop in funds available to construct and repair the country’s infrastructure could, in our view, weigh on growth prospects for U.S. GDP, as well as states’ economies, and, in some cases, where states and municipalities choose to replace the lost federal funds with locally derived revenues, could hurt credit quality.
So kids, to save America as we know it, get rid of your bikes and your apartments, get out there and buy big heavy gas guzzlers! Move to the ‘burbs! Drive ’til you qualify! That’ll do it.
I think it’s feasible to hypothesize that the movement to reduce state support of higher education 30-40 years ago, which was founded on the idea that students should pay for their education, since they’re the beneficiaries, may actually be leading to the impending (20+ years in the future) collapse of the car industry. And while the car industry does contribute to climate change, they also provide jobs; as cars go electric, their contributions to climate change lessen. But the big picture here is how refusing to support higher education students, by making those new adults who, in many cases, have not had the opportunity to accumulate the funds necessary for their higher education because, you know, they’re new adults, leads to Unforeseen Consequences with a degree of negativity; or, how a failure to understand that edjumucation is important can lead to the degradation of a national institution.
