How College Broke the Labor Market (PolyMatter)

Related links:

The College Dream is Over (Gary Roth)

Credential Inflation Makes College Degree Not Worth the Cost (Randall Collins)

College Meltdown 3.0 Could Start Earlier (And End Worse) Than Planned 

Higher Education, Technology, and A Growing Social Anxiety

The Student Loan Mess Updated: Debt as a Form of Social Control and Political Action

Student Loans and a Brutal Lifetime of Debt

A People's History of Higher Education in the US

The American K-12 Pipeline: Inequality and Injustice Start Here

The American education system promises equal opportunity for all. However, that promise is far from reality. The K-12 system, the foundation of this educational pyramid, is riddled with inequalities that create a segregated pipeline towards higher education and future careers. This report delves into the systemic issues within K-12 education and their far-reaching consequences.

Under a Trump-Vance Administration, we should expect these inequalities to widen, with more resources going to those who need it least--and fewer resources going to families and communities that  need it most. Furthermore, we should expect even less oversight of federal dollars for programs meant for working class communities that may or may not work, including charter schools, online education for kids, and exclusively online teacher education. This could further harden the US class system, making social mobility even more caste-like.  

Inequality in the K-12 System

Funding disparities plague the K-12 system. Wealthy school districts often boast smaller class sizes, newer facilities, and access to advanced coursework, while schools in low-income areas struggle with overcrowding, outdated resources, and a lack of qualified teachers. This uneven distribution of resources creates a significant achievement gap, leaving students from disadvantaged backgrounds unprepared for higher education.

Impact on Higher Education

The consequences of K-12 inequality ripple through the entire educational spectrum. Students from under-resourced schools are less likely to meet the admissions requirements for competitive colleges and universities. This disproportionately affects students from low-income families, limiting their access to prestigious institutions and the professional networks they cultivate.

• Community Colleges: Community colleges often serve as a steppingstone for students seeking to transfer to four-year institutions. However, the poor preparedness of students from unequal K-12 systems lead to lower completion rates at community colleges. 

• Regional State Universities: Regional state universities, known for their affordability, become less accessible to students who require extensive remedial coursework due to inadequate K-12 preparation.

• Flagship Universities: Flagship universities, the crown jewels of state university systems, become even more exclusive for students from working class backgrounds. The mission of these schools to educate folks from the state is no longer its exclusive or even primary goal.  International students who pay greater tuition, or serve as skilled academic labor, are favored.  

• Elite Universities: Elite universities, with their highly selective admissions processes, remain largely out of reach for those without the academic foundation provided by well-funded K-12 schools.

Regional, State, County, and Local Disparities

The quality of K-12 education can vary dramatically within a single state, county, or even city. Wealthy suburbs often have superior schools compared to their urban counterparts. Rural areas may face challenges in attracting and retaining qualified teachers. These regional and local discrepancies exacerbate existing inequalities.

 

 

 

 

 

 

 

 

Demographic Changes

The United States is experiencing significant demographic shifts. The K-12 system needs to adapt to cater to an increasingly diverse student population with varying needs. This includes:

• Immigrant Populations: A growing number of students come from families where English may not be the primary language at home. Schools need resources to support these students and ensure their success.

• Social Class: Students from low-income backgrounds often have limited access to educational opportunities outside of school, further widening the achievement gap.

• Race and Ethnicity: Students of color are disproportionately enrolled in under-resourced schools, creating a system that perpetuates racial and ethnic disparities in educational attainment.

Impact on Employment Opportunities

The unequal K-12 pipeline has a direct impact on opportunities for gainful employment. Students who lack a strong educational foundation are more likely to enter low-paying jobs with limited upward mobility. This cycle of educational disadvantage translates into economic disadvantage, limiting opportunities for social mobility.

The Perpetuation of Poverty and Other Issues

Unequal access to quality education is intricately linked to a web of social issues. Poverty, near poverty, and mass incarceration are more prevalent among those with lower levels of education. Limited opportunities can lead to deaths of desperation, a term encompassing suicides and deaths due to preventable health conditions brought on by chronic stress. Conversely, those who navigate the unequal K-12 pipeline successfully are more likely to accumulate wealth, further widening the gap between the rich and the poor.

Related links:

The K-12 Pipeline for Global Elites: Inequality and Injustice Start Here

A People's History of Higher Education in the US?

The K-12 Pipeline for Global Elites: Inequality and Injustice Start Here

The K-12 pipeline for global elites operates as a separate and often invisible track compared to the public system. Instead of merit and potential, this pipeline is characterized by privilege, resources, and a focus on gaining admission to prestigious universities. Here's a breakdown of its key features:

Early Investment:

• Elite Private Schools: Wealthy families from around the world enroll their children in elite boarding schools. These schools are known for smaller class sizes, rigorous academics, and experienced teachers. 

  Students include the children of elites from China (including Hong Kong), Taiwan, South Korea, Singapore, Thailand, Vietnam, Russia, Uzbekistan, Ukraine, Canada, the United Kingdom, Germany, Australia, Brazil, and Venezuela. Room and board can exceed $60,000 a year. 

  Elite schools do offer scholarships to lesser folks, not out of charity, but because they provide value to the institutions. But these scholarships do not outweigh the immense privileges that the children of elites receive before, during, and after school. 
  

• Enrichment Activities: Extracurricular activities like sports, music, theater, and coding classes are actively encouraged. These activities not only enhance well-rounded development but also provide opportunities for leadership and awards, which can bolster college applications.

• Test Prep and College Counseling: Students receive extensive coaching for standardized tests like the SAT and ACT, maximizing their chances of achieving high scores. Professional college counselors guide them through the complex application process, including essay writing, recommendation letters, and strategic college selection.

Parental Involvement:

• High Expectations: Parents of elite students often set high academic expectations and provide a supportive environment conducive to learning. This includes access to educational resources, technology, and quiet study spaces. Working class parents may hold their children to high standards, but they may not have the time or resources.
  

• Networking and Alumni Connections: Elite parents may leverage their own professional networks and alumni connections to secure internships, research opportunities, or even preferential consideration from colleges and universities.  While working class folks have networks, such as religious organizations and labor unions, they cannot offer connections that elites have.
  

The Outcomes:

• Standardized Test Scores: Students on the elite track consistently achieve higher scores on standardized tests, increasing their competitiveness for admission to selective universities.
  

• College Admissions: These students are well-positioned for admission to prestigious universities, often securing spots at Ivy League institutions or other highly ranked schools. This opens doors to exclusive networks, prestigious internships, and faculty mentorship that can further propel their careers.

The Future of Publicly-Funded University Hospitals (Dahn Shaulis and Glen McGhee)

There are more than 200 active university medical centers (UMCs) and 1,700 teaching hospitals in the United States. These institutions, tied to America's major universities, employ large numbers of medical professionals, administrators, and laborers. While UMCs have grown in size, dominating areas in major cities, locating facilities that are financially well, well-staffed, and adequately resourced has become more difficult. 

Also known as academic medical centers or AMCs, UMCs feel the financial strain of a number of social issues: a growing elderly population, drug overdoses, mental health problems, gunshot wounds, victims of car crashes, children with severe illnesses, and numerous medical problems related to poverty.  Some UMCs are trying to grow out of their financial problems by expanding their networks and buying up other facilities that may provide more profitability.  

Private equity is also taking over hundreds of hospitals and clinics across the US, finding value where they can, however they can. Private for-profit hospitals, for example, will steer their most vulnerable patients to UMCs. And they will cut out programs they cannot profit from. Publicly funded university hospitals often cannot turn people away or dump patients if they cannot pay their medical bills--or if they are not covered by premium insurance.  

While nurses and other medical laborers may be overworked and short-staffed, CEO pay is often $1M-$3M a year at larger institutions. And many medical centers, both public and private, are run with administrators focused more on cost containment rather than patient care and preventive care. 

 

Simply adding money to these institutions without transparency, accountability, and reform not only makes the situation no better, it means less money for other areas of need, such as public health, K-12 education, safe and affordable housing, clean air and water, public transportation, and infrastructure.

Critical Condition   

While the covid epidemic was horrifying for hospitals, the underlying conditions for many UMC's are a slow-motion disaster. University medical centers are facing financial challenges due to several key factors:

1. Rising costs outpacing revenue growth: Operating expenses, particularly for staff, facilities, and technology investments, are increasing faster than patient care revenue. 

2. Reduced government funding: State support for academic health centers has been shrinking since the early 1990s. Federal and state funding for medical research and education has also stagnated or declined.

3. Lower reimbursement rates: UMCs are facing low reimbursement rates from Medicaid, Medicare, and commercial insurance. Cost-control measures introduced by the Affordable Care Act have also impacted revenues.

4. Legacy pension costs: Some UMCs are burdened with high fringe benefit costs inherited from state systems.

5. Increased competition: Many UMCs are too small to compete effectively in the current healthcare market against monopolies like HCA and Keiser. Their lack of scale gives them little leverage in negotiations for services and supplies.

6. Balancing multiple missions: UMCs must juggle patient care, research, and education. This can lead to inefficiencies, as physician time spent on research and teaching is less profitable than pure clinical care.

7. Infrastructure investments: UMCs need to make large investments in infrastructure and technology to maintain top-tier diagnostic and research capabilities

The main problem seems to be that the traditional financial model for academic medical centers is no longer sustainable in the current healthcare environment. Their operating costs are rising faster than their revenue sources can keep up, and they are struggling to maintain financial viability while fulfilling their multiple missions of patient care, research, and education.

Saving Lives is Unprofitable 

 

Burn Units: Treating burn victims requires specialized staff and facilities, leading to high costs, while insurance reimbursements may not fully cover them.

Neonatal Intensive Care Units (NICUs): While essential, NICU care for premature or critically ill newborns is expensive due to the high level of support needed.

Trauma Centers: Trauma care often involves a high volume of resources and unpredictable patient conditions, making it difficult to predict or control costs.

Mental Health Services: Mental healthcare reimbursement rates tend to be lower compared to other specialties, making these programs less profitable.

The Bigger (Unhealthy) Picture 

This strain at UMCs is under-girded by a dysfunctional and expensive healthcare system serving a population that is violent and unequal, and increasingly sedentary, unhealthy, disabled, elderly, and under psychological strain.

 

Around 40% of US hospitals are operating at a loss according to Kaufman Hall. And about half of all rural hospitals are running in the red. Obstetrics and delivery services are big money losers in these hospitals. Hundreds of these units, and their hospitals, are at risk of closing, leaving folks with longer travel times to get medical care. 

 

In 2022, U.S. healthcare spending reached $4.5 trillion, or $13,493 per person. The cost of healthcare per person in other wealthy countries is less than half as much. Despite this enormous spending, US life expectancy is 3 to 4 years less than other OECD nations. For those with means, though, the US offers some of the best medical care in the world. 

Zooming In

Financial problems and/understaffing and safety issues have been noted at:

University of Vermont Health Network (VM)

Nassau University Medical Center (NY)

CarePoint Health and Hoboken University Medical Center (NJ)
Rutgers Robert Wood Johnson Medical School (NJ)

George Washington University Hospital (DC)

Penn Medicine-University of Pennsylvania (PA)
University of Pittsburgh Medical Center (PA)

University Hospitals-Case Western Reserve (OH)
West Virginia University Medicine (WV)
University of Miami Health System (FL)

University Medical Center-LSU and Tulane (LA)
Detroit Medical Center-Wayne State University (MI)
Marquette University Health Care (WI)
Cook County Health-Rush University (IL)
University of Chicago Medical Center (IL)
Oregon Health & Science University (OR)

University of New Mexico Hospital (NM)
UCLA Health (CA)

University of California, including UC Davis (CA)

We expect to see more headlines about the declining finances at some university hospitals--and the downsizing that will follow. Fierce Healthcare has created a layoff tracker to monitor these events.

Related links:

Baby Boomers Turning 80: The Flip Side of the 2026 Enrollment Cliff

State Universities and the College Meltdown

American Hospital Association (AHA) Report: New AHA Report Finds Financial Challenges Mount for Hospitals & Health Systems Putting Access to Care at Risk (April 2023)

McKinsey & Company: Ensuring the financial sustainability of academic medical centers (July 2023)

 

PESP Private Equity Hospital Tracker