Another report – this one from the College Board – adds to the chorus that higher education costs are rapidly increasing for Louisiana families. The tuition hike over the past five years is more than twice that of the state with the second highest increase (59 percent compared to West Virginia’s 27 percent bump). These data are timely as voters decide whether to grant Louisiana higher ed institutions the ability to raise tuition without approval of the Legislature – a move that could open the floodgates to further tuition increases. Danielle Dreilinger of Nola.com/The Times-Picayune has the story:
The College Board report comes as Louisiana voters are deciding whether to shift tuition- and fee-raising power from the Legislature to the university governing boards, and as an announcement of a deeper budget crisis worsens the worry over a spring shortfall in the TOPS scholarships that covered tuition for more than 50,000 students last year. Higher education officials and analysts, including those from the Center on Budget and Policy Priorities and the Louisiana Budget Project, say the increases were driven by cuts in state support. An August CBPP report found Louisiana’s budget cuts were the worst in the nation, totaling $4,602 per student since 2008.
The future of the oil market
WIth large global supplies of oil and new technologies providing clean energy alternatives, some observers of the oil market believe we’ve passed “peak demand” and there won’t be another boom cycle. Others believe that shifts in the market could actually mean increased volatility in prices and more frequent boom and bust cycles. Mike Lee explains for E & E Publishing:
But this oil bust could be different. A growing body of research says that changes in the international oil market, rapid advances in wind- and solar-powered generation and regulations aimed at curbing climate change may hold down the price of oil and natural gas for years or even a decade. That means the fracking-fueled bonanza that pushed American oil production to levels not seen since the early 1970s may be remembered as more than just another high point for the states that depend on the oil industry. It could be the last oil boom. “We’ve actually hit a point that this isn’t your daddy’s kind of boom and bust — it’s a new set of factors that are influencing demand,” said Shanna Cleveland, a manager of the carbon asset risk program at the nonprofit group Ceres.
While no one can predict the price of oil, states can and should guard against the revenue fluctuations it produces in energy-dependent states like Louisiana. Sound policies like the creation of a new revenue stabilization fund, established if Amendment 5 is approved by Louisiana voters, would improve budget certainty.
The best approach for oil-dependent states would be to sock away their oil taxes in trust funds, which would even out the boom-and-bust cycle, and invest for the long-term in education and infrastructure. Texas went through that sort of transformation after the oil bust of the 1980s and has emerged from the 2014 oil bust with fewer side effects, (Brookings Institution researcher Mark) Muro said.
While most people understand what a monopoly is, the idea of monopsony is less understood but still important. Monopsony refers to a situation where there is a single buyer (in contrast to monopoly where there is a single seller). When the buyer is a corporation “purchasing” workers’ labor it can disadvantage workers at the negotiating table. In the real world, pure monopsony is rare but provides a useful frame to view the machinations of large corporations working together (either explicitly or implicitly) to limit worker bargaining power. A new Council of Economic Advisers (CEA) report does a deep dive on the issue and Nick Bunker of the Washington Center for Equitable Growth gives a useful explanation of CEA’s proposed policy fixes:
The policy options proffered by the CEA report include policies that would directly increase the bargaining power of workers, such as increasing unionization and a higher minimum wage. The new report also suggests policies that would help increase the mobility of workers between jobs, such as curbing the use of non-compete agreements so workers can more easily move to new jobs, paid family and medical leave to help workers deal with family responsibilities that often hinder job switching, and reforming land-use regulations to allow for more housing in areas where workers are more in demand. Empowering workers in this way may be an effective way to counteract the creeping influence of monopsony in the U.S. economy.
Program design matters in early ed
A study of Tennessee’s pre-K program showed negative results – counter to the preponderance of early childhood research that demonstrate across the board benefits. Kids who were randomly selected to participate in the pre-K program had worse work skills and preparation by first grade compared to a control group, and those who didn’t participate in the program did better on tests by the end of second grade. One important lesson: all pre-K programs aren’t created equal. Edward Rodrigue and Richard V. Reeves of The Brookings Institution have more:
As William Gormley, a professor of public policy at Georgetown, pointed out on Wednesday: there’s no consensus about what pre-K actually is. In each state, the pedagogy and curriculum looks different. Tennessee took a more rigid, academic approach; Minnesota, meanwhile, has taken a more open-ended approach to universal pre-K. This variation offers an opportunity for states and cities to learn from one another—especially if the experiments are coupled with rigorous evaluations. The stakes are high: in recent years, the federal government and the states have spent roughly $34 billion on these programs under the assumption that they are vital to the well-being of the next generation of Americans.
Number of the Day
59 – Percentage increase in tuition at Louisiana colleges over the past five years, by far the largest increase in the country. (Source: The College Board via Nola.com/The Times-Picayune)