Work Hard, Study Hard and Still Get Left Behind

The American Dream mythology says that if you work hard and play by the rules you can be a success. This mythology ignores the fact that people born into affluent families have a far greater chance of attaining financial success than people born into lower income families precisely because of all the advantages and privileges that come with affluence. Those who rise out of poverty and achieve the American Dream are extremely rare and the exception to the rule.

A new study, “Working Hard, Left Behind,” by the Campaign for College Opportunity, found that over 33% of California families are low income (earning less than $45,397 for a family of four) despite their hard work. The state currently ranks #1 in the nation in the number of working poor families. The solution, the Los Angeles Times argues, is higher education. Since Californians with Bachelor’s degrees earn $1,340,000 more in their lifetimes than those with only high school diplomas, making everyone go to college would necessarily solve the problem, right?

According to the Times, the study found that “higher education is a proven pathway from poverty to prosperity for working Californians.” However, in science we generally require a high level of evidence before we can say we have proof and the evidence simply isn’t there to say that higher education is a “proven pathway to prosperity.” Consider all the unemployed people with higher degrees.

Both the Times, and apparently the researchers at the Campaign for College Opportunity, have confused correlation with causation. Yes, people with college degrees do tend to earn more than those who lack them, but that doesn’t mean that the degree is the cause of their financial success. Affluence increases the chances that a person will do well in grades K-12, increasing the chances of getting into a four-year college and succeeding there, as well. While college achievement does indeed correlate with future financial success, affluence correlates with both academic success and financial success. Thus, it is entirely possible, indeed likely, that familial wealth is the cause of future financial success, in part because it increases the chances of academic success.

The conflation of correlation with causation has led the Times and the Campaign for College Opportunity to some absurd policy prescriptions, like proposal that we increase enrollment of low income adults in colleges, while doing nothing to directly address their poverty. Of course it would be wonderful if the state were to increase funding for its universities and community colleges and provide the financial aid so that every adult in the state could attend college, or even just provide childcare for single mothers, but this would not solve the problem for several obvious reasons. Many low income adults lack the prerequisite skills to succeed in college, including literacy, self-confidence, and study skills. Indeed, many have the equivalent of an elementary school reading level or a long history of academic failure. Many are working full time to support their families and simply lack the time and energy to complete college classes on the side.

Considering that a wealth-based achievement gap exists by the time children are three (and it tends to grow as children move through the education system), it would be a lot more efficient to invest in programs that reduce poverty and material insecurity for families, that encourage parents to read and play with their children, that improve perinatal and children’s health, as well as preschool programs that prepare kids for kindergarten. This would front load the system by increasing the number of people graduating high school with the skills to succeed in college.

However, there is another problem with the Time’s and the Campaign’s reasoning: Even if everyone graduated from college there would continue to be a significant wealth gap. Want and privation are products of wealth and privilege, which in turn are products of an economic system based on exploitation. So long as there is an employing class that pays its employees only a fraction of the value of the goods and services they produce, pocketing the rest as profits, there will continue to be poverty. Likewise, as long as workers accept their dependence on employers, especially without a fight, there will continue to be a downward spiral in wages for everyone, including the college educated. Consider, for example, how much the average middle class, college educated family has lost in personal wealth over the past five years, or the overall decline in living standards that has been occurring since the 1970s for all but the richest Americans.

Education Cuts for California Despite Prop 30 Victory

Image from Flickr, by Double-M

The California Teachers Association (CTA) lobbied heavily for passage of Proposition 30, mobilizing thousands of teachers to phone bank and canvas neighborhoods. Together with other state unions, they spent $50 million to get the initiative passed. They claimed it would save public education and restore funding to the schools. However, with more than $18 billion slashed from K-12 education since the recession began, the $6.6 billion in projected revenues from Prop 30 won’t even come close to restoring public education funding to pre-recession levels, especially considering the state budget deficit is now estimated at more than $15 billion. It will do nothing to bring back the 80,000 teaching jobs lost since the recession began nor reopen any schools that were shut down, the WSWS reports.

What Proposition 30 will do is prevent $6 billion in trigger cuts that had been built into the last state budget as a way to blackmail California voters into approving the tax hikes. Rather than restoring public education, Prop 30 simply maintains the status quo of an $18 billion hole in the state’s K-12 funding and one of the very lowest per pupil funding rates in the nation. While it does raise taxes on those making more than $250,000 per year, the increase is only a nominal 1-3% increase on their payroll taxes (i.e., the taxes withheld from their salaries) and it leaves the tax rate on their capital gains (which makes up the majority of their income) unaffected. At the same time, Prop 30 raises the state sales tax from 9.25% to 9.75%—a regressive tax increase that disproportionately affects poor and working class people.

While the California State University (CSU), University of California (UC) and state community college systems are all planning to increase course offerings and some, like CSU, are planning modest tuition refunds ($249 per semester, according to the Los Angeles Times), they are also planning other fee increases and service cuts. CSU, for example, is still planning to implement fee increases for students taking more classes than they need to graduate, and the UC system is planning on increasing fees for graduate and professional programs by 1.5% to 35%. UC, which threatened 20% tuition hikes if Prop 30 failed (and promised no new fees this year if it passed), is leaving open the possibility of raising undergraduate tuition again next year.

In response to the proposed cuts and the unwillingness of UC to go beyond a tuition freeze and actually lower tuition, UC students have been protesting at UC campuses and at meetings of the university’s regents. Students staged a sleep-out in Berkeley on Wednesday night. Hundreds of students were joined by faculty and unionized workers on Thursday to protest budget cuts that have resulted in slashed course offerings, layoffs and large tuition hikes. They blocked roads leading to the meetings and then disrupted the meeting so effectively that the regents had to call a temporary recess.

Students do not simply want a reduction in tuition—many want a completely subsidized higher education system. Last Friday, KPFA’s “Up Front” news program broadcast protesters chanting, “No cuts! No fees! Education must be free!” Until recently, California did subsidize both the UC and CSU systems to the point that neither charged tuition and both charged fees that were relatively affordable for middle income families. Back in the early- to mid-1980s, for example, it only cost $1,000-1,200 per year to attend UC. By 1995, it was over $4,000. By 2010, it has risen to more than $11,000. Last year, tuition at UC was $13,218. (Click here for more on the history of UC tuition).

With the passage of Prop 30, Los Angeles Unified (LAUSD) is planning on restoring the five school days that had been cut from the school year the Los Angeles Times reports, as well as restoring teacher pay for the 10 days which they had lost to furloughs. However, Superintendent Deasy warned of a new round of cuts (implying the furloughs and pay cuts could return) if Congress and President Obama cannot resolve the “fiscal cliff” crisis, as this would leave LAUSD with a new $60 million budget shortfall.

Of course, if this happens, many districts in the state could suddenly find themselves with large deficits, too. This is because Prop 30 is only a bandage over a gaping wound. Education at all levels, from pre-K to graduate school, has been eviscerated over the past decade and Prop 30 does nothing to restore the cuts. Prop 30 does little to close California’s current budget deficit and it does nothing to stabilize California’s revenue stream or prevent future deficits and education cuts.

There is a glimmer of hope for education funding in the future. One of the reasons California has had so much difficulty in balancing its budget for the past decade is that voters approved a law requiring a two-thirds supermajority in the legislature before any new tax increases can be approved. The most recent election, however, gave the Democrats just such a supermajority in both houses of the state legislature for the first time in nearly 80 years. This will not only allow lawmakers to pass tax increases, but it also gives them the power to override the Governor’s veto.

Whether or not they will use their power in this way remains to be seen, but seems unlikely considering that every one of them would be negatively affected by a serious tax increase on the wealthy. This is not only because they are all wealthy themselves, but because they would be biting the corporate hand that feeds them, keeps them in office, and provides them jobs when they get termed out.

Obama’s Crushing Student Debt Repayment Scam

The Department of Education recently enacted new rules for Income-Based Repayment (IBR) of student loans. The hallmark of this “reform,” according to the WSWS, is that a small fraction of students will now be able to repay their loans in 20 years instead of 25 and their rates will go down from 15% of their discretionary income to 10%. The change will have no effect on undergraduates and may end up costing more for those who go on to earn graduate degrees if their starting salaries upon graduation are under $33,000 per year.

While tuition has been rising faster than the rate of inflation for the past decade the amount of student aid has been declining. Federal grants dropped 5% over the past year, the first decline in five years. Federal work study fell by 4% to $972 million—the first time it fell below $1 billion in over a decade. The Obama Administration has also implemented cuts to Pell Grants and interest rate subsidies.

Despite declining federal aid for students, need has actually been growing. A new report from the Project on Student Debt suggests that 66% of students must now borrow in order to afford a higher education. Student debt has risen by $303 billion since 2008, while the default rate has increased over 53% over the past several years. This has resulted in a recent series of new laws in some states to curtail recruiting scams at diploma mills (see here).

Obama’s student debt plan is clearly not designed to put any kind of dent in the problems of student indebtedness or defaults. Rather, its main goal is to protect the interests of the banks and investors that profit from student loans. The initial lenders are able to borrow from the Federal Reserve at just over 0%, while charging students anywhere from 3.4% to more than 10%. At the same time, hedge funds have been trading in student loans much like they do with mortgages and profiting handsomely from it.

CSU Considering Large Fee Hikes Regardless of November Tax Initiative

California voters will have a chance in November to vote for Proposition 30, which is predicted to bring in more than $7 billion to temporarily bail the state out of its now perennial budget deficits. Governor Jerry Brown has threatened extreme austerity measures should the bill fail in November, including large across the board cuts to K-12 and higher education. This would trigger an automatic $250-million cut to the California State University system (CSU) system, leading to a 5% tuition hike for in-state students, plus a 7% increase in supplemental fees for out of state students.

Yet, even if the bill passes, the CSU system will not be able to close its budget gap. Consequently, the governing board for CSU is considering numerous fee increases that would go into place even if Prop. 30 does pass. These would include a per unit supplement of $372 for seniors who have already accumulated 150 semester units, the Los Angeles Times reports, as well as a $100 per unit fee for students who want to repeat a class. Official estimates suggest that roughly 40,000 class spots are filled with students who are repeating classes. They also want to add a $200 per unit fee for any units over the usual 16 per semester. This is intended to discourage students from enrolling in large numbers of classes and then dropping them later.

UC Plans to Raise Tuition 16%

The University of California is now considering annual tuition increases of 8% to 16% over the next four years, according to the Los Angeles Times, which could bring the annual fee to $22,068 for the 2015-16 school year.

UC officials said that the plan would help families plan more realistically, by which they meant to say that middle class families should consider second and third mortgages, as soon as the banks start lending again, while the working class and poor should give up all hope of ever sending their kids to UC.

The UC budget for this year will be $650 million less than last year. Even if state funds rise by 8% annually, regents say that tuition increases will still increase to $16,596 over the next four years, and this does not even include campus fees or room and board, which can more than double the total annual costs to students. If state funding only grows by 4%, tuition would increase to $19,188 by 2015-16.

California’s Assault on University Students and Teachers

The freshly signed California budget slashes $650 million each from the budgets of its two preeminent university systems, the University of California (UC) and California State University (CSU), serving hundreds of thousands of state residents. The cuts are $150 million more than originally threatened earlier this year and will result in significant tuition hikes and service cuts. The new budget is dependent on predicted increases in revenue to the state. The Bay Citizen writes that if the increased revenue fails to materialize, the universities could lose another $100 million each.

Tuition for California college students has more than tripled over the last decade. With the new cuts, fees are expected to rise another 8% at CSU and 10% at UC next fall, according to the Student Activism blog.

Not only has UC tuition been skyrocketing yearly for California residents, but the university has shifted its focus from providing affordable higher education for all qualified residents to actively recruiting out of state students who must pay an additional non-residents’ tuition of $22,000 each (according to another Bay Citizen report), bringing the university much higher profits per student. The San Francisco Chronicle says that out of state students will bring the university $80 million, up from $54 million last year. As a result, the number of California residents intending to enroll in UC Berkeley's freshman class has dropped by 21% over the past two years, the Bay Citizen reports. The school admitted nearly three times as many out-of-state students this year as it did in 2009. Throughout the nine campus system, the number of out-of-state and international students has more than doubled to 12% since 2009.

At the CSU system, the chancellor is asking the trustees to increase tuition by 12%. CSU has already cut enrollment by 10,000. Students will also find fewer professors at both university systems, making classes more crowded or dropped altogether. And it is not just students who will be suffering. Universities are making it much more difficult to achieve tenure or even to get a tenure-track position, instead offering more adjunct, temporary and part-time teaching professions which many desperate job seekers are willingly accepting. Many are shuttling back and forth between two or more campuses or even university systems in order to have enough teaching assignments to make ends meet.

Universities love “contingent” employees because they are easier to fire, are paid less, and often are not eligible for benefits. Because they are much easier to fire, “contingent” employees are less likely to speak up on their own behalf, or for their students, fearful that any rocking of the boat could spell the end of their job. And it’s not just one specific job they are trying to protect. It might seem a blessing to get laid off from a low-paid, 1-section teaching job with no security or benefits at a community college. However, that lay-off and a potentially bad reference could prevent a person from securing a better full-time position at another college when such a position opens up.

According to the SF Chronicle, the number of full professors in the CSU system dropped by 13% from 1990 to 2010, and full- and part-time lecturers rose by 10%. For each lecturer who replaces a tenured professor, the university saves an average of $31,679. However, lecturers do not always participate in faculty or department meetings and are left out of academic senate meetings and decision-making. They lack the institutional support and time to mentor students the way professors can. The lack of a stable office and time means that it much harder for students to get letters of recommendation or even help with their homework. In the UC system, the number of lecturers grew by 37% between 1998 and 2010, while the number of professors grew by only 21%.