“For the past 10 years, one of the secrets to the growth of the U.S. economy has been the dramatic improvement in productivity. ‘Doing more with less’ has been the mantra for manufacturing, the service industry and most other sectors,” was the opening statement from the president of the St. Louis Fed, William Poole, in his monthly comment. He related how productivity in the past ten years has grown at twice the rate of the previous 20. In my opinion, one of the keys to our continuing international domination lies in the productivity area.
“One sector has yet to get on the bandwagon: higher education. The cost of tuition over the past two decades has risen even faster than the cost of medical care. The burden on many families and students has reached the breaking point. And there is no relief in sight.” Poole pointed out that instructional expenditures per student at public institutions rose 17% during the 1990s, while administrative expenditures jumped 54%.
His suggestions on what colleges and universities might do to copy the successes of the U. S. economy?
1. Outsource: What business are you in? If it’s not directly related to education (i.e. housing, food service, cleaning, etc.) contract it out. “Competition from outside contractors would drive down costs.”
2. Decentralize: Push decisions and money down to the department heads.
3. Improve the product: Teaching should be prime, not secondary to research.
4. Boost flexibility of the workforce: With an ever changing demand for classes, there is a need to be able to move professors around, increasing their time in the classroom or even lay them off. Lifetime tenure makes such flexibility virtually impossible. “A department could be allowed to exceed its tenure quota if it’s willing to give up something when that extra person’s classes fall out of favor—say, a portion of everyone else’s salary.
What do you think about his ideas?
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Dave: While I agree that at the present time some of the items mentioned have a very slim chance of happening, the continuing escalating prices in higher education could become an Achilles Heel that will have to be faced at sometime. I’m convinced that prices can’t continue to increase at rates much higher than the overall economy. At some point a “tipping point” is reached, beyond which it becomes too late to save the franchise. I’m hopeful that thoughtful studies like the one that I quoted from the Fed, will cause decision makers to look at how they reinvent the educational establishment.
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