This [unedited] guest post is by a student in my EEP100 class (background post).
Please praise/critique/comment on its economic quality and importance to you.
William Choi says:With the recession affecting many American institutions, it is not surprising that universities, specifically UC universities, have begun to adopt measures in an attempt to reduce their costs and close a budget gap of more than $750 million dollars.
From what was seen last week during the UC Berkeley campus walkout, it is apparent that students and faculty members are angry at the decisions the UC Regents have approved. For starters, fewer courses are being offered by the school in order to cover the increased costs of running the university. Additionally, professors and non-union workers are now subject to staff lay-offs and unpaid furloughs. Furthermore, tuition for all UC students next year will be increased by a huge 45% of their current tuition fees.
From an economic point of view, if the price and quantity of a UC Berkeley education was graphed on a supply/demand chart, the supply curve would shift to the left (external factors such as increased costs and decreased funds from state) while the demand stays the same. This shift causes less quantity (course cutbacks) and a higher price (increased tuition). One could argue that the school is simply applying basic economics. However, this would only apply correctly in a perfectly competitive environment.
From a different point of view, one could technically consider UC Berkeley more of a monopoly over its students. A student’s demand for an education is pretty inelastic and he or she cannot simply choose to leave on a whim and go get an education somewhere else. It is a possibility that the UC Regents may be overcharging students for an education that may not even be of the same caliber of previous years due to a loss of courses and staff. Furthermore, UC regents have also approved 12% and 27% increases to the incomes of two new incoming chancellors to six figure salaries reaching close to half a million dollars each.
The UC Regents should reconsider how to utilize their funds for the needs of the students and not for those who already have extravagant incomes despite how impressive their resumes might be. There is the argument made by Mark Yudof that the recently approved Blue and Gold Program will “guarantee that no student with a family income of $60,000” will pay any fees. Currently there are few details about the program so it is unknown how the program will really be implemented. In any case, the policies that the UC Regents have proposed should be revised to those that will ensure the prestige of the education that students will pay for.
It is expected that costs will rise for everyone involved and sacrifices must be made by all parties; however, the current policies seem to affect students and faculty much more negatively than they do high administrative officials.
Bottom line: Those in charge of the UC Campuses with high salaries should be more willing to forego more on the administrative end in order to give students and workers more of a financial cushion in the midst of the recession.
DZ's Note: President Yudof sounds pretty uninterested in students in this interview.
2 comments:
I would disagree on the statement that students are being "overcharged" for their classes, but rather undercharged. I think it would be fair to say that the education at UC Berkeley is comparable to tha of Stanford, yet Stanford's tuition is many times UC Berkeley's.
Does anyone know how the salary of UC administrators compare to those of private schools? This would be some valuable information in determining administrative salaries.
There are two key points here; the first is the elasticity of student demand for places, and the second is high-end salaries.
I would suggest that student demand for education is fairly elastic and I give two pieces of evidence for this. First is that universities typically have a high attrition rate for students over the length of a course (mine was about 50%). Sure, some students drop out because they can't take the pace, but a lot simply can't afford it or find something better so jump ship. The second is that (in the UK at least) student applications have risen dramatically due to the lack of jobs available. People are shifting their time to education instead of work, and presumably did'nt do this a few years ago when applications were lower because more work was available. This second point is the key driver for price increases - universities can charge you more because the alternatives are less available.
The second key point is my personal rant over high-end salaries. When the economy is good, the CEO can justify a high salary because "look how much good I am doing everyone, we're all winning!". When the economy is bad, the CEO can justify a high salary by saying "in these economic times we need to attract and retain the best people!".... Read More
The over-riding theme through both of these key points is that economic arguments, like statistics (lies, damned lies, and statistics), can be mis-used for gain whether the economy is in a pit or riding high.
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