Mroz: Spend more on higher ed
A recent national survey by the Pew Research Center showed many conservative voters today question the effect that colleges and universities have on our country. Perhaps those of us involved in higher education need to do a better job of explaining how higher education helps increase self-sufficiency and personal responsibility — two traits conservatives rightly value highly — among those who persevere and graduate, particularly with a four-year degree.
A report prepared by University of Maine economist Philip Trostel, commissioned and published by the Lumina Foundation, shows those with a bachelor’s degree or better are far less likely to use government services like Medicaid, food stamps or prisons, and are likely to put in more for Social Security than they take out.
The Lumina Foundation is dedicated to increasing the proportion of Americans with postsecondary credentials to 60 percent by 2025. Michigan’s overall postsecondary attainment rate is only 43.3 percent, so we have work to do. But increasing the number of Michiganians with degrees is likely to help reduce the cost of welfare-related government services in our state.
Trostel’s report found:
■Those with a college degree earn more and pay significantly more in taxes than those without a college degree. Trostel found the present value of lifetime federal, state, property and sales taxes paid by an average individual with a high school education was about $135,000. For those with a bachelor’s degree, taxes hit $328,000; for those with an advanced degree, tax payments totaled $443,000.
■Looking at Social Security and Medicaid, he found those with a high school diploma pay about $100,000 over their lifetime to those retirement funds. Those with a bachelor’s degree contribute $182,000; with an advanced degree, that payment comes to $224,000.
■On the “use” side, the report examined the expense of programs commonly considered “welfare.” Those with a high school education receive about $54,000 in present value of lifetime public assistance. Those with a bachelor’s degree receive about $14,500 and those with an advanced degree about $9,300.
■Looking at social insurance programs (unemployment, supplemental Social Security, disability, and workers compensation), Trostel also saw the same trend. Those with a high school diploma received about $19,000 in assistance from those programs, while those with a bachelor’s degree receive $9,200 and those with an advanced degree about $7,500.
Trostel also calculated the public costs of incarceration, the cost to government for those without health insurance and the cost to the private sector for the uninsured.
The bottom line: Those with less than a high school diploma received $163,000 more in direct government programs than they paid in. Those with a high school diploma paid $26,000 more in taxes than they received. (Don’t forget, this doesn’t include military spending, infrastructure, pollution prevention, national parks and forests and many other programs that benefit all Americans.)
Those with a bachelor’s degree contributed $381,000 more than they received from direct government aid programs; with an advance degree, the contribution was nearly $550,000 more over a lifetime.
Trostel is up front with his caution that correlation does not necessarily equal causation, meaning that the reason college graduates earn more and cost less might not be solely because they earned a degree. But given how today’s business world values degree holders, the economic advantages of a degree to an individual are clear. And that value transfers to states and society as a whole.
Data collected outside of Trostel’s study add to the argument that a four-year degree encourages “conservative” behaviors. Those with a degree are more likely to marry, start a business, volunteer and make a contribution to a charity.
It you want to reduce government spending, and encourage conservative social behaviors, one of the best investments a state can make is spending more to prepare, retain and attract those with a college degree.
It’s the conservative thing to do.
Glenn Mroz is president of Michigan Technological University.