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Why You Can’t Work Your Way Through College Any More

“Progressives” have created a two-tier system of higher education.

You can’t work your way through college any more. That’s the conclusion of an article that sets out the figures for how long you have to work these days to pay for a year’s tuition. In effect, if you were to work long enough to pay for your tuition and room and board, you would have no time left to go to classes or study. This is assuming you make minimum wage or something close to it, but that seems a fair assumption. After all, isn’t that the whole economic rationale for going to college to be able to get a higher-productivity job that pays more, which assumes you’re starting out with lower productivity?

There are, of course, non-economic rationales for going to college, but only someone who already has a lot of money to throw around can afford to spend $100,000 without thinking about the economic return—and as we shall see, that is very much the point.

It used to be possible to work your way through college, perhaps not at Harvard or Yale but at decent schools below the elite level. In 1980, you could pay your tuition by working only 10 hours a week at minimum wage, which might crimp your social schedule but wouldn’t prevent you from studying. Some time in the early 1990s it became practically impossible. Now, apparently, there is only one way to work your way through college, and I hope it’s not one that many young people are considering.

The reason is not the inadequacy of the minimum wage but rather the skyrocketing cost of tuition. As for the cause of the tuition increases, this is a classic case of the Paradox of Subsidies. Here is my explanation of the paradox: “Why do you subsidize something? To make it cheaper. What is the actual effect? To make it more expensive.”

How does that work?

The greater the subsidy, the more money flowing in to the sellers of a product or service, the less incentive they have to reduce costs—as we can see in all those universities taking in federal loan and grant money and using it to decrease the tuition breaks they would otherwise offer to students…. Hence the treadmill effect created by the Paradox of Subsidies. The more the government subsidizes something, the more expensive it gets—which requires higher subsidies to get the same results, which increases the costs even more—which requires still higher subsidies, and so on.

It’s an effect you don’t see anywhere else in a free economy, where the usual rule is for prices to go down while quality goes up. But it is the normal pattern for sectors that are targeted by the government for intensive subsidies: higher education, health care, and (at least until recently) housing.

When you cross the threshold where nobody can work their way through college any more, this has especially pernicious effects.

If it used to be possible to work your way through college without having any special skills, then any young person with drive or determination could do it, even if they came from poverty. (My dad did it in the early 1960s.) Today, it’s still true that anyone can get through college—if they’re willing to emerge saddled with enormous government-sponsored loans which they will take decades to pay off, delaying their purchase of homes and cars and their accumulation of savings. As for degrees with no clear economic payoff—art, sociology, or English (my dad’s choice)—forget about it. Those are for rich kids. Graduate school even more so.

So we end up with a two-tier system. Wealthy and upper-middle class kids can graduate without debt, ready to start life unencumbered. But everyone else will spend their 20s or 30s or beyond digging themselves out of an economic hole. Which is to say that they start with a deficit that will keep them a few steps behind for the rest of their working lives.

And then some “progressive” politician will come along and have the gall to complain about income inequality—which he will propose to solve, you guessed it, with more student loans and subsidies to colleges. That, plus more taxes on “the rich,” which actually hit middle class earners just as they begin to poke their heads into the upper middle class, preventing them from accumulating wealth.

If these seem like perverse results, if it seems like the folks who rail against inequality are creating a system that is more unequal, think again. Judging from their actions, their real target isn’t inequality but independence, which this system is perfectly designed to stamp out.

When the Paradox of Subsidies has pushed the cost of college beyond your reach, you are no longer capable of supporting yourself through your own efforts—and the managers of the state will be able to sneer at you that “you didn’t build that.” Which turns out to be the real point after all.

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