I wrote something a while ago about why I think forgiving all student debt is neither a good idea nor progressive. One of the common responses to people who make the kinds of argument that I make is that, indeed, forgiving student debt is progressive, because, at least on the plan Sanders had, it would be paid for by a tax on speculative trades. So, it is progressive because it redistributes down.
After I saw that objection several times I realized that I didn’t have a well-formed concept of progressivity or regressivity, and didn’t really know what other people meant by it. So I’m asking you to do either or both: help me understand what progressive means, and/or understand why it matters that some policy is progressive.
To be clear. I agree that, if paid for the way Sanders planned to pay for it, loan forgiveness would have the net effect of redistributing down. Now, that doesn’t impress me a huge amount. Imagine a proposal that redistributed down from the top 1% just to the next 9%, and does nothing for the bottom 90%. Sure, that redistributes down, but the population within which it redistributes isn’t really of interest to me for now.
The definition of “progressive” on which the transfer from the top 1% to the next 9% is progressive is:
- A policy is progressive as long as it has the net effect of redistributing resources downward at all.
That’s clearly not the definition underlying my objection to student debt forgiveness being progressive. (As I say, I just didn’t have a clear idea of what definition was in my head, but it wasn’t this one).
Here’s a second possible definition:
- A policy is progressive as long as it has the net effect of reducing inequality of resources in the whole population
These two definitions may look equivalent, but I don’t think they are. It’s just not clear to me that redistributing from the 1% to the next 9%, even though it redistributes down, reduces inequality in the whole population.[1] It reduces inequality within the top 10%, but leaves inequality in the whole population untouched. Similarly redistribution downward, or upward, within the bottom decile. Or within any decile or quintile (except the middle quintile). I’m not committed to this claim, just saying how it seems to me.
Suppose that you had a policy that reduced inequality in the population by shifting resources from the top 1% to everyone in the top 55% of the income distribution. That, I think, would count as reducing inequality in the whole population. So it would be progressive on both the above definitions, even though it doesn’t touch the bottom 45% of the distribution.
In this post about student debt forgiveness at Brookings, the authors say the following:
We measure regressivity in relationship to income (or wealth), not to raw dollar amount. The latter metric would mean that Social Security is a regressive social program since it pays out higher benefits to higher-income beneficiaries… That is why the claim that student debt cancellation is regressive is false. We measure regressivity in relationship to income (or wealth), not to raw dollar amount. The latter metric would mean that Social Security is a regressive social program since it pays out higher benefits to higher-income beneficiaries… Of course, Social Security is widely and correctly credited as the federal program that does the most to reduce poverty… Because loan balances as a share of income are highest for lower-income borrowers—and so much higher as to be negative for low-wealth borrowers (many of whom have negative balance sheets thanks to student debt)—cancelling student debt would make the income and wealth distributions more egalitarian and nearly eliminate negative net worth households from the wealth distribution. That is the definition of a progressive—not regressive—program.
I don’t understand the first sentence of that passage (any help would be welcome). But the rest of the passage suggest two different, non-equivalent, definition of progressivity. First, the final two sentences suggest this definition:
- A policy is progressive as long as it has the net effect of increasing the resources of the bottom X%
I’ve used X because I am not sure what percentage they have in mind, and because you could reasonably argue for any of a number many possible values — at least any value under 35 in the US context. But you can see, I think, how it is different from the first two definitions – a policy could redistribute down, and reduce inequality in the population as a whole, without doing anything for the bottom X%.
The second definition, suggested (to me) by the first half of the passage, is this:
- A policy is progressive as long as it reduces the ratio of resources between the top and the bottom.
Just to be clear, hooray for increasing resources for the bottom, and for reducing the ratios. But neither is the definition of progressive that I’ve been carrying around in my head. Consider the following example. Suppose group A has average wealth of $1000, and group B has average wealth of $10,000. If you gave everyone in the A $1000, but gave everyone in B $5000, you would double the wealth of group A, but would only increase the wealth of group B by 50%. So you have, indeed, increased the resources of the bottom group, and you have reduced the ratio from 1:10 to 1:7.5. This redistributes down, decreases inequality, and increases the resources of the worst off group. But, still, I am reluctant to call the measure progressive. I’m certainly reluctant to celebrate it, even in those cases in which, in fact, it really is the best we can do.
So, what would make a policy progressive? I think that the reason I baulked at people claiming that debt relief is progressive, and similarly baulk at claims that free public college is progressive, is that I had in the back of my mind (really, quite far in the back of my mind) something like the following definition:
- A policy is progressive as long as it reduces the ratio of resources between the more and the less advantaged, and does not increase the absolute gap in resources between them.
That means flat rate equal transfers are the starting point: they are the minimum expectation for progressivity (because they reduce ratios without increasing absolute gaps). I think that is exactly the standard for progressivity that I have been carrying around in my head, and which makes me baulk at calling policies like free public college or student debt relief progressive. (Though, I have never before been able to articulate it).
This still leaves open the possibility that policies that reduce ratios and increase absolute gaps might sometimes be all-things-considered improvements on the status quo. And if that really were the best we could do in some circumstance we might be justified in doing it. But we wouldn’t flatter it with the term progressive.
Of course, in the end, ‘progressive’ can mean whatever you want it to mean – but, as with lots of other concepts, it helps to know what you mean by it, and know what other people mean by it (I mean that as a self-criticism). Maybe think of it this way: the fifth definition sets a standard for celebrating a redistributive policy. If it doesn’t do that, you still might endorse it if it’s the best you can do. But you’ll look even harder for alternatives that do better than you normally would.
[1] This is partly because I’m not sure what I mean by ‘inequality in the whole population’. It could be interpreted a number of different ways. Give it whatever you think the most plausible interpretation is.
{ 66 comments }
SamChevre 06.29.21 at 4:24 pm
We measure regressivity in relationship to income (or wealth), not to raw dollar amount…
I understand this but disagree that it’s the right way to measure.
If you take 5% of income from everyone, that’s neither progressive not regressive, by this definition (with regard to income). (Change “income” to “wealth” to get “prpgressive with regard to wealth.)
I think that Social Security payouts are regressive–this definition is intended to say they are not. I think that it makes more sense to say the Social Security program is progressive–high-income people pay a lot more in, and get a little more benefit. So the benefits stand-alone are not, in my opinion, progressive.
I find “progressive” and “increases inequality” too vague to be helpful. I find it much more useful to look at “increases inequality between percentiles X and Y.” It seems much attention goes to increasing equality between the median and the 10th percentile, and between the 99th and the 90th percentile: I think the difference between the 50th and the 90th is probably most important socially, and the growing gap there contributes greatly to the current unhappiness.
Tim Worstall 06.29.21 at 5:10 pm
It’s not obvious that a financial transactions tax itself is progressive. Sure, in the first instance it’s people who trade financial instruments who pay it. But it would destroy a lot of HFT (part of the claimed appeal). But HFT has a significant effect. It reduces the market maker’s spread. Those 401 (k)s buying a few stocks to put away for 20 years leave less of their money with the market insiders as a result of HFT. Get rid of HFT and they’ll leave more for the market insiders.
This is a significant effect. The IFS looked at stamp duty on shares (so, equivalent enough to an FTT) and said the major long term incidence was on smaller private sector pensions.*
It’s possible to construct a case – not that I’d insist upon it, but it would be possible to argue – that an FTT is in itself a regressive policy.
It’s also not obvious that government paying for college is progressive. Some 50% go to college and yet it’s the taxes of all – money is fungible after all, even tax revenue – that pay for college. So, some amount of the taxes paid by the 50% of non-college goers, usually lower earners than college graduates, end up paying – even if we’re only including opportunity costs, what could be done for them if this money weren’t paying for college – for the degrees of those who will have higher earnings.
“We measure regressivity in relationship to income (or wealth), not to raw dollar amount.”
We’re measuring the effect as a percentage of income or wealth, not as the number of dollars. So, $1,000 is 10% of a $10,000 stock of wealth and 1% of a $100,000 stock.
SS does pay more to higher income people – on the basis that they’ve paid more SS tax in over the years. But SS benefits are a lower percentage of gross income for high income retirees (say, at a guess, 20%) than they are for low income (who might gain 100% of their retirement income from SS) and therefore even though the low income people are gaining fewer dollars it’s a greater portion of their income.
Student debt cancellation is a higher portion of the net wealth position of the not very wealthy than it is of the wealthy, therefore it’s progressive. That’s their claim by their method of measurement.
As to the larger point, what, exactly, is the definition of progressive in this sense I’m not sure that it’s possible. Take this point:
“Because loan balances as a share of income are highest for lower-income borrowers—and so much higher as to be negative for low-wealth borrowers (many of whom have negative balance sheets thanks to student debt)—cancelling student debt would make the income and wealth distributions more egalitarian and nearly eliminate negative net worth households from the wealth distribution. That is the definition of a progressive—not regressive—program.”
This would be true if we looked at household wealth levels today. But household wealth is perhaps better understood – OK, differently understood – as a lifetime cycle.
We have, perhaps, the recent graduate with significant student debt. They also have a low income – just starting out their working life. Negative wealth and a low income. Wiping that debt is being described as progressive.
Well, yes, sorta. It rather depends upon what the lifetime income is going to be. That degree might be the start of a significant income. There are times in the medical training system when someone’s on $30k, $40k a year (less than median household income, substantially so) and the debt’s roaring through $250k. A decade later the same person’s on $300k and more a year from that same degree and training.
Is forgiving their debt progressive? On a lifetime income basis no, not really. By the definition being used here, a snapshot approach, it’s being defined as so.
It might be possible to give a tight definition of progressive with respect to income. Or possibly to wealth. But given the way the two can vary substantially for the same person I think it might be difficult for the one definition to cover, precisely and exactly, both at the same time.
*My one and only peer reviewed paper is on this very subject. Given that the impact factor of the journal is 0.3 it’s not a very important paper…..
Anonymous 06.29.21 at 5:23 pm
I don’t really understand the objection to increasing the absolute gap as long as the ratios are reduced.
When we talk about progressive taxation, we mean a tax that takes proportionally more from the rich, not just a tax that takes absolutely more from the rich. A flat tax (rate) preserves ratios but takes absolutely much more from the rich. A regressive per capita tax takes the same absolute amount from everyone and increases the rich:poor ratio. We only seem to care about the ratio when we talk about a tax’s progressivity.
Money in particular is also a little weird, because if we double the amount of money (and debt, and whatever else) everyone has then it’s not clear that anything has actually changed — prices would double and everything would go on as before. The ratio may be the only thing that’s even meaningful.
But even for real goods, if you keep shrinking the ratio while still giving absolutely more to people already on top, you still eventually end up with something that looks pretty equal to me. If eventually Jeff Bezos owns 11 galaxies and regular people only own 10, in some sense the gap between him and everyone else is unimaginably bigger than it is now, but in another sense he only has 10% more stuff and there’s not really anything he can do that’s out of reach for other people. If the end result looks pretty fair then surely the identical steps we took to get there are progressive.
marcel proust 06.29.21 at 5:47 pm
I believe you mean:
A policy is progressive as long as it
reducesincreases the ratio of resources between the bottom and the top.The original appears to say that a policy is progressive if it reduces the ratio defined as (resources of those at the bottom of the distribution) divided by (resources of of those at the top of the distribution).
If it is not an error but intentional, then the definition in your (Harry’s) head is very different from the one in mine.
Harry 06.29.21 at 5:52 pm
Thanks Marcel, fixed.
marcel proust 06.29.21 at 5:56 pm
Consider China and, to a lesser extent, India, over the last 40 years. Both countries (esp. China) have seen a massive decrease in poverty, both in absolute numbers of individuals and in population shares, and a massive increase in inequality. It’s a mixed bag, but in my judgment, the decrease in poverty, from an average of barely subsistence for hundreds of millions, with too frequent swings into less than subsistence, has made the change, on balance, net progressive. I don’t believe anyone has yet figured out a policy that pulls so many so rapidly up the income scale without the increase in inequality that makes us question the progressiveness of the change. The cost seems a lot less than a more Stalinist one (where I think the excuse was that you can’t make an omelet without breaking some eggs and the riposte was “Where is the omelet?”).
NB: this is not meant to excuse Xinjiang, Tiananmen Square or anything else one can think of along these lines. Just that if one is judging whether the reforms that Deng initiated 40 years ago were progressive or not, on balance I would assent to “Yes,” because of the degree and widespread nature of the benefits at the bottom.
Gorgonzola Petrovna 06.29.21 at 6:21 pm
What are these ‘resources’ you speak of? For example, I hear that Warren Buffett leads a modest life, all the while controlling huge sums of money, moving them (along with other people’s money) from one company to another. Does he need to be expropriated, or, considering the (allegedly) modest amount of resources he personally consumes, he can be left alone to do the things he does?
Kiwanda 06.29.21 at 6:35 pm
One version of progressivity could just be “decreases the Gini coefficient”, by which measure forgiveness of student debt would be progressive, just not very progressive.
I’d guess the most progressive way to move a dollar is to take it from the richest person, and give it to the poorest person, or take equally from those tied for richest, and give equally to those tied for poorest. The effect of repeating this would be an increase in the number of those tied for richest, and an increase in the number tied for poorest (the latter probably much larger), together with the rest of us, in between.
I imagine such a scheme is maximally progressive, for given amount of redistribution, for any reasonable measure of inequality. For other redistributions, like student loan forgiveness, the degree of progressivity would depend on the measure of inequality used.
I think the Gini coefficient is not the best measure of inequality, because an additional dollar has much greater utility to the poorest person than to the richest, so utility is something more like logarithmic in income. In that case, it looks like the Theil index is a better measure of inequality, and the progressivity of a re-distribution is better measured by the change in Theil index it produces.
Timothy W. Sommers 06.29.21 at 7:21 pm
Unless I missed it, no one mentioned that one might think that being “progressive” or a progressive politically was not just a matter of distributive justice.
That being said, I have a related question on distributive justice that I would love input on. The question is, what makes a distributive view “egalitarian”? I take the main distributive alternatives currently popular to be prioritarianism, sufficientarianism, and limitarianism, plus, of course, the historically significant, but not so popular anymore, “strict equality”. (I prefer “range egalitarianism” which is, roughly, sufficentarians plus limitarianism, but it’s not (as far as I can tell) a widely-held position).
For simplicity, I’ll use sufficientarianism as an example.
Many (I think, most) sufficientarians deny that it’s a form of egalitarianism. Frankfurt, Temkin, et al say it’s “humanitarian” not “egalitarian”. I would argue that part of what makes it egalitarian is that it only makes sense to defend it if you assume, at a minimum, that we are all moral equals (even if that doesn’t mandate strict economic equality). But that’s not enough alone because you might argue from moral egalitarianism to some principles that just can’t be taken as egalitarian. Consider libertarianism. But still sufficientarianism is egalitarian because (i) the only plausible way of understanding sufficiency (I would argue) is comparatively, and (ii) sufficiency is only on the table where the net affect of applying it would reduce the gap between the worst-off and everyone else relative to some unadjusted baseline (no matter how you calculate). Here’s what any of that might have to do with the question of what makes you an economic progressive.
I think there’s no definition of what counts distributively as “progressive” except relative to which one of these ways of being egalitarian you hold to be the right one.
Maybe, anyway.
LFC 06.29.21 at 8:26 pm
marcel proust @6
This 2012 post from my no-longer-active blog is, I think, relevant to your comment, though I’m not taking the time now to re-read the post myself:
link
Starry Gordon 06.29.21 at 9:09 pm
Does ‘progressive’ just mean ‘egalitarian’? If so, I can think of simpler ways to envision progress. But there are many who would disagree.
Howard F. 06.29.21 at 10:22 pm
You may already know this, but someone once told me that Musgrave and Musgrave’s undergraduate public finance textbook has a lengthy discussion of different definitions of progressivity.
That aside, confusion is bound to ensue because the name of an ill-defined political tendency is the same as that of a mathematical property of some public policies.
John Quiggin 06.29.21 at 11:15 pm
It’s important to think about opportunity cost.
If we take money from the 1 per cent, and give it the next 9, that’s money that can’t be spent on anything else. And our capacity to extract money from the 1 per cent is limited So, rather than describing particular policies in isolation as progressive or regressive, it’s better to compare policy packages.
Taking from the 1 and giving to the 9 is more progressive than the status quo, but less progressive than lots of alternatives.
PopsHobby 06.29.21 at 11:34 pm
Progressive has two meanings. One is the redistribution of income or wealth, or both, from the upper echelons to the lower echelons. The transfer could happen directly or indirectly.
The more important meaning, however, is political. Can a policy be described in ways that people who believe, or can be made to believe, that they are shortchanged feel that they are participating in a communal effort to stick it to the man?
Where are we going if you want to lead the country in a more progressive way or, more simply, “forward?”
J-D 06.30.21 at 12:03 am
Thanks! That’s a key insight.
Alan White 06.30.21 at 4:50 am
@14
I live in Harry’s state whose motto is “forward”–and I can assure you that the present republican leadership demonstrates that that term’s meaning has an inherent value component that is as steerable as any sailboat with a wanton captain.
And I agree with Quiggin @13 that “progressive/regressive” usage is best replaced with overt policy descriptions indicating what values are embraced. And overall, “progressive” I take it has a utilitarian greatest-good meaning.
Tm 06.30.21 at 8:12 am
JQ: “So, rather than describing particular policies in isolation as progressive or regressive, it’s better to compare policy packages.”
Absolutely!
MFB 06.30.21 at 9:04 am
Taking from the top 1% and giving to the next 9% could be progressive, but only if it were done in a sustainable way and if the ultimate consequences were a broader redistribution. I say this because we have had experience of this in South Africa, where a comparatively small black middle class was created, in part by taking from the white middle class and in part by taking from the white elite — the latter being taking from the top 1% and giving to the next 9%. However, the end product was to entrench that 9% into a system which exploited everybody else, and as a result, South Africa as a whole became poorer and less governable.
RichardM 06.30.21 at 1:40 pm
As you noted above, you need to define what a policy is, before you can move on to what is a progressive policy. Taxing X and doing Y are two policies, not one, so you can’t add mathematically sum up the effects of X and Y. Someone who robs a bank and uses some of the money to buy mosquito nets in Africa is both a bank robber and a philanthropist. There is not some tipping point where they stop being one and start being the other.
Note this is independent of any discussion of to what extent the money numbers used are a real constraint,or not. Even if all money were physical gold pieces, how to spend that money is a decision separate from how to acquire that money.
Trader Joe 06.30.21 at 3:48 pm
I don’t have a definition, but I do have observations.
If my richest friends b**** and moan about it and actively seek ways to circumvent a policy – then its progressive.
If they aren’t all that bothered or actively seek ways to exploit the new policy for their benefit – its not progressive.
I’ve concluded that student loan forgiveness is not progressive simply because there are so many “easy” ways to game that system (I’ve done some myself) such that those who are or may soon be part of the the top 10% can benefit from it that there surely must be better ways to target the same spend before the fact rather than randomly mop-up past distributive errors (i.e. many of the poorest who have loans, should have had grants in the first place).
Harry 06.30.21 at 7:58 pm
Thanks so much everyone, this is by far one of the most useful threads a post of mine has generated, with something in every comment that has helped me think better about this. I hope you don’t mind my non-responsiveness, which is partly because of other distractions, and partly because I just want to think more about all of this.
However, JQ says this “So, rather than describing particular policies in isolation as progressive or regressive, it’s better to compare policy packages.â€
I think I agree with this. However, the package is made up of items, and it does make sense, doesn’t it, to think of some items as more or less progressive than others? So, taking up Tim’s observation about the government paying for higher education. Warren offered a policy package that was probably, all things considered, the most progressive in the 2020 nomination race. But, her promise for free public college would have lavished resources on the top 30% of the income distribution and provided almost nothing for the bottom 25% of the income distribution (because so few attend college, the public colleges they do attend already have lower tuition than the public colleges more affluent students attend, and many of the public colleges with higher tuition (flagships) already have heavy discounts for students from the bottom 25% — eg, most students in that demographic who attend UW-Madison would get nothing out of free public college). You might think that it is essential for building a winning coalition for the maximally progressive package, but see it merely as a sop to the affluent of the kind social democratic parties often offer, rather than something to celebrate in its own right. Why? because it is hardly progressive at all compared with numerous other ways of injecting the money into education.
That’s offered not as a firm statement, but as something I (selfishly) am curious about, especially given how appealing I find the statement I quoted.
John Quiggin 06.30.21 at 8:39 pm
Harry @21 It’s certainly reasonable to look at particular bits of the policy package, but you still need to specify the alternative. That is, if you cut free public college out of Warren’s package, what do you do with the resulting saving – reallocate it to some other kind of spending, cut taxes, or reduce the budget deficit?
As a default option, it’s worth supposing that you replace the package with a uniform payment to all households, or to all adults. On that basis, I’d guess that free public college would fail the progressivity test. But a more general payment to all young people, as suggested (IIRC) by Ackerman and others would look a lot better.
Harry 06.30.21 at 9:10 pm
Thanks John. Yes, I completely agree. Part of what is so frustrating about the debates about free public college and debt forgiveness is the lack of clarity of what the alternative would be. Advocates don’t consider alternatives (so they effectively say: “Our proposal is a better use of the money than leaving it in the hands of the super-rich” and frame those as the only options), and the nominee candidates opposed to it didn’t specify an alternative (reinforcing the impression that it was status quo or free public college). For me, the obvious alternative is spending it in pre-k and k-12. (US government sources already spend about 25% more per student/year on higher ed than on k-12, and Warren and Sanders would have increased higher ed spending/student/year by about $4k, but spending on pre-k and k-12 by about $1.5k). But alternatives abound: massively increasing the Pell Grant (ie, devoting all the new spending, instead of disproportionately little of it, to lower income students); direct grants to comprehensive universities and community colleges; or the two you mention.
Frankly, I always thought that free public college was a hostage to fortune, and was anxious about what hay the Republicans might be able to make with it if Sanders or Warren became the nominee. And that was before my collaborator and I analyzed it and found the HE/K-12 discrepancy mentioned above. I would have thought concentrating spending in k-12 was more promising, electorally, but what do I know!
Tim Worstall 07.01.21 at 1:56 pm
JQ@22 “It’s certainly reasonable to look at particular bits of the policy package, but you still need to specify the alternative.”
Yes.
I’m particularly irritated by hypothecation of tax revenues. I know it’s a big feature of the American system and I don’t like it a bit.
“Shall we raise more tax revenue to spend more on education/college/something” is an entirely fair and reasonable question. To which the answer can often be yes.
“Shall we have an FTT/VAT/wealth tax” is also a fair question and the answer can be yes.
“Shall we have an FTT to fund college” is micing and matching two too different concepts. And FTT, as opposed to some other taxation method, is desirable or not for some set of reasons. Free college is desirable or not for some entirely other set. To use the attractions of college funding to justify an FTT is to confuse, too much, that arguments for or against an FTT.
Another way to make the same point. There is no connection at all between how much it is desirable to tax some activity – or even to tax it at all – and how good it would be to spend revenue on some other activity. They’re entirely different questions and must be answered separately.
Without doing this we get to the sort of thing that I would predict from an hypothecated FTT to pay for college. Imagine that people like me are right, an FTT would raise very little because behaviour would change. So, very little should be spent on college because speculators are price sensitive? I can think of lots of reasons not to spend more on college – and many to spend more – but I don’t think speculators senstitivity is one of them either way.
Harry 07.01.21 at 4:17 pm
In response to Tim (24). You’d love our State. We, seriously, had a referendum question on the ballot about whether we should make require that taxes raised from gas, car sales and road tolls be spent on road building and maintenance, as an amendment to the Constitution. Worse, it passed. Worse still, I know otherwise perfectly reasonable and sensible people who voted for it (without giving it much thought). Bad public policy that, in addition, exhibits contempt for Constitutions.
I think hypthecation in the case you mention is basically a case of straightforward dishonesty frankly (on the part of Warren and Sanders, not necessarily all their supporters). Of course the FTT goes into the general fund and of course free public college would be paid for out of the general fund, and of course there would be no real connection between the two. The point of linking free public college to FTT is to enable politicians to portray an essentially regressive measure, the main purpose of which is to attract young affluent people to their coalition, as progressive.
Gorgonzola Petrovna 07.01.21 at 4:55 pm
““Shall we have an FTT/VAT/wealth tax†is also a fair question and the answer can be yes.”
I don’t think it’s a fair question, unless you view taxation as a way to take money out of circulation, MMT-style. Or to punish some activity. But most people probably don’t. They probably think of taxation as a way to finance something. So, you could introduce (or raise) a wealth tax and use the receipts to create and finance the Ministry of Silly Walks. Or you could use the receipts to pay for college. Seems like an important difference.
Harry 07.01.21 at 5:33 pm
“They probably think of taxation as a way to finance something.”
Yes, but the point is they don’t (or shouldn’t) think of taxing a particular thing as a way of funding a particular thing. (This is implied by JQ’s point above about packages, and embodied in Tim’s objection to hypothecation). You think about what package is worth spending money on out of the general fund and figure out what the optimal package for raising money is, and you go back and forth between them, and the result is your policy package. That’s the actual way things work, and although one can use the language of hypothecation as a sort of way of thought experiment (“Look, you say funding X is unrealistic, but its not because we can raise the amount of money it would take to fund X by taxing Y”) actually entrenching it is usually bad public policy and pretending that’s what you are actually doing (when you’re not) is dishonest. (I know, I know, dishonesty is the stock in trade of politicians, and this is a more innocent form of dishonesty than many, and maybe if you give voters the right amount of credit you’ll think they know you don’t really mean it, and in that case its not really very dishonest or even dishonest at all, but, I tell you, lots of people sincerely defend the Warren and Sanders HE plans as progressive on the grounds that they REALLY WOULD be paid for by a tax on the super-rich, and many of them are smart, and friends of mine, so…).
Harry 07.01.21 at 5:33 pm
But a Ministry of Silly Walks would be just great right now. I’d go for that wherever the funding came from.
Gorgonzola Petrovna 07.01.21 at 6:26 pm
“I know, I know, dishonesty is the stock in trade of politicians…”
Precisely. You pay gas taxes year after year, but the roads aren’t getting any better. So, you figure if there is any chance, any hope to force them to do what they are supposed to do, let’s take it.
As for Warren and Sanders, I don’t know any details, but weren’t their plans all-at-once Great Leap Forward-style, and to the tune of tens of trillions? In that case, they probably should be regarded as populist politics. Not subject to rational analysis. Mexico will pay for The Wall, Bezos will pay for The Education.
Matt 07.01.21 at 9:10 pm
This seems like a very narrowly scoped dollars-and-deciles consideration of progressiveness. It leaves out many progressive organizations like the ACLU, Greenpeace, NORML, SPLC, and ACT UP; their causes aren’t easily defined in terms of tax policy and income bands.
Even within the taxes-and-incomes scope of questions: are anti-smoking cigarette taxes progressive?
By the economist’s usual meaning, no. A tax of $X per pack of cigarettes that does not take the financial status of the buyer into account will take a larger share of the poor smoker’s disposable income than that of the affluent smoker.
But in the broader sense of “progressive politics” it is usually the progressive who wants to to use taxes to discourage tobacco consumption, excessive alcohol consumption, disposable plastics, etc. Any policy that uses targeted higher prices as a nudge to discourage consumption will be regressive in the sense that low income people have less money to spend. But low income people are also less materially able to weather the future consequences of smoking cigarettes, for the same reason. What’s the time frame over which one should judge if taxing cigarettes is a progressive policy?
LFC 07.01.21 at 9:31 pm
I’m no expert on these issues, but the dishonesty referred to above would be removed or lessened if there is some kind of “lock-box” (if that’s the right word) or dedicated separate fund. So, in the case being discussed, you have an FTT and the proceeds don’t go into a general fund or a general part of a big budget, rather they go into a completely separate fund that is then spent on… subsidizing or eliminating tuition, or more free meals or free computers for low-income students in K -12, or whatever it has been agreed to spend the money on. (I realize that’s usually or often not how it works.)
Howard F. 07.01.21 at 10:34 pm
I think people may be going overboard on the money-is-fungible argument. Say I propose an expensive new program, and you say, “But how are you going to pay for it?” And I say, by raising the marginal tax rate on income over $500,000 to 45%. Even though there are other possible uses for the money, and the dollars go into the general fund, it doesn’t strike me as incoherent to say OK, that strikes me as a reasonable use for the money.
Tim H. 07.02.21 at 1:36 pm
A minor nit, rather than calling it “Free college”, could it be something that implied that the expense was judged worthwhile because it would improve the lot of enough participants?
David Gastil 07.03.21 at 12:58 am
There’s a lot of kneejerk anti-populism in this thread and it makes me think that most of you either never had to worry about student debt or were able to pay it off decades ago. This is not an abstract technical issue for those of us with mounting debts and the callousness shown in many comments is deeply disrespectful to the millions of Americans who are low or middle income yet owe many thousands in student debt with no way to recieve relief and no way to pay it off. I’m not a rich kid, but I have plenty of debt. My fiancee has even more and struggles even to pay the $150 a month minimum on a caregiver’s salary. We have no way to get ahead of it without getting better jobs and the degrees we paid so much for aren’t the tickets to gainful careers we were promised.
Our generation was sold a bill of goods. The educations we received were, in many cases, barely adequate and came at a price tag many times higher than for previous generations. What’s more, because so many of us were conned or cajoled into getting these mediocre undergraduate degrees, we find that they offer almost no competitive advantage. The only thing they’re good for is helping us get jobs that shouldn’t actually require them and don’t pay. Wanting to see us liberated from what is potentially a lifelong debt trap so that we are free to participate fully in the economy (and society) is not empty “populism” and it is deeply offensive for people like Gorgonzola to compare it to symbolic nonsense like Trump’s wall. Paying back the millions of struggling young people who were manipulated by the system into taking on unmanageable debt for degrees (often unfinished) that were never worth what we were told they were is not a handout. It is a matter of restorative justice. Justice should never be means tested.
As for calling Sanders or Warren “dishonest,” that is a huge claim that some back-of-the-envelope pseuso-wonkery is insufficient to support. Those of us who supported them are not innumerate fools. We are not dupes to be manipulated. Please don’t talk down to us or assume we haven’t thought this through. On the contrary, we have very strong incentives to think through these issues quite carefully. Most of us are aware that some rich kids will also benefit from debt cancelation (of course, rich people can be cheated too), but I for one, do not accept the claims that they will benefit most or that this plan is inherently regressive. There are far more middle and working class people struggling with debt than there are rich kids and helping us out will have a much bigger impact on the economy than debt relief for people who have already largely been able to pay it off.
Tim Worstall 07.03.21 at 9:10 am
Love might not be quite le mot juste but yes, I take the point:
“In response to Tim (24). You’d love our State. We, seriously, had a referendum question on the ballot about whether we should make require that taxes raised from gas, car sales and road tolls be spent on road building and maintenance, as an amendment to the Constitution.”
An illustration of quite how bad this can get. As JQ (and Nordhaus, Stern, Uncle Tom Cobbleigh and me bringing up the rear) have been arguing a carbon tax is somewhere between a necessary and a complete solution to climate change problems. It does this by changing the price system so that the damages from emissions are now in the prices faced by decision makers.
There is nothing at all in this argument that insists that the revenue raised should be spent upon anything at all. The effect exists even if the cash is just burnt. Sure, it’s nice to have more revenue, it can be put to good effect somewhere, maybe spent, maybe some other tax reduced and so on.
But the entire point of Pigou taxes is that they work simply by existing, the revenue’s not the point at all. This rather being missed by those who would insist upon such taxes being spent on the activity we’re trying to prevent by having the taxes……
Tim Worstall 07.03.21 at 9:15 am
There’s an implication of this:
“Our generation was sold a bill of goods. The educations we received were, in many cases, barely adequate and came at a price tag many times higher than for previous generations. What’s more, because so many of us were conned or cajoled into getting these mediocre undergraduate degrees, we find that they offer almost no competitive advantage. The only thing they’re good for is helping us get jobs that shouldn’t actually require them and don’t pay.”
OK, assume all that is true. As I think it largely is. The next step is to stop it happening to this generation of children and also those who come after.
Which does rather mean having a smaller portion of the age cohort going to college in each generation, doesn’t it? Reversing the expansion of the college experience? Whether or not it’s taxpayers who cough up or the individual students, 50% of the nation doing degrees that aren’t worth doing, well, regardless of how something is financed something not worth doing is something not worth doing.
Harry 07.03.21 at 1:25 pm
“As for calling Sanders or Warren “dishonest,†that is a huge claim that some back-of-the-envelope pseuso-wonkery is insufficient to support”.
For what it’s worth, we did what as far as I can tell is the only full analysis of their promises on free public college. Free public college is not a matter of a few children of billionaires etc being the cost of getting money to lower income students. Most of the new spend goes to the students from the top 30% of the income distribution and hardly any to students in the bottom 25%. Not back of the envelope. Paper under review.
Back to debt forgiveness. “There are far more middle and working class people struggling with debt than there are rich kids and helping us out will have a much bigger impact on the economy than debt relief for people who have already largely been able to pay it off”
Two things here. If the point is stimulus, lets look for stimulus policies – like taxable check to the whole population?. If it is to relieve debt — what’s so special about student debt, as opposed to credit card, or automobile, or other, debt? Plenty poor and working class people have plenty of debt, and plenty who don’t need more money.
The reason I call Warren dishonest is not because of her student debt policy (which is far better than Sanders’s, because much more targeted). It’s about free public college. I believe that Sanders believes free public college is a good, and progressive, policy. I think he’s wrong, and I really doubt he or anyone on his team actually calculated the discrepancy between their student/year promise in higher ed and their student/year promise in k-12. But no dishonesty. But Warren: I don’t believe for a minute that she actually thinks that free public college is progressive, or good policy.
And. Politicians are almost all dishonest, they pretty much have to be, and I actually don’t mean it as the kind of insult it would be if I said anyone on this thread was being dishonest. Similarly ‘ruthless’ which I think it s virtue in politics, but not in life.
“Our generation was sold a bill of goods”. The earnings premium attached to a 4-year and even to a 2-year, college degree has continued to rise over time. I really really agree that the education itself is very substandard (talking about what to do about that has been the main theme of my posting here in the past 10 or more years in fact).
Stephen Laudig 07.03.21 at 3:42 pm
Progressive, regressive, security, precarity. Anyone in politics not having the goal of increasing security favors increasing precarity and fear and servitude and neo-slavery.
Harry 07.03.21 at 5:31 pm
I feel that it might be helpful to expand on the politician/dishonesty bit.
Politicians (in FPTP/Winner take all systems) have to forge coalitions by offering policies to various constituencies that will attract their votes. Normally, if they have any principles (and I think plenty of them really do – eg, Sanders and Warren, but also Obama, Biden, Reagan, etc), and are attentive to what the policies really involve, they must believe that some of those policies are, considered in their own right, bad policies. Their only value is that they are instrumental to forging the coalition. But they can only really play that role of forging the coalition if the politician sounds as if they genuinely believe them to be good policies. Some politicians (and I suspect Sanders of this, frankly, having watched is career pretty closely since I first attended a fundraiser he spoke at in 1986) probably aren’t very attentive to what each component policy really involves. Its easier for them than for others to avoid dishonesty — and that actually might sometimes be an asset. But for most, who do pay attention, they have to sound as though they really believe in policies (or elements of policies) that would much rather not implement, and will only implement because they have promised them to a constituency they need to get on board. Hence, dishonesty. This is what I suspect Warren of re free public college (and, in 2016, I suspected Hillary Clinton of the same over the promise she made about free college the exact content of which I have now forgotten).
And hence my initial response to JQ’s comment about ‘progressive’ being a property of packages of policies rather than individual elements of those packages. Yes…. but…some elements of the package make the package less progressive than we would like, and those elements, while we might endorse them being put in the package for instrumental reasons, are elements we nevertheless regret.
I don’t think anyone was duped. Well, I’m sure people, including me, get duped all the time. People vote their interests. That’s why, at least in the primary, student debt forgiveness was a sensible, if regressive, offer. (Not so clear about free public college, I must say — I worry that the actual political economy of that might make it not in many people’s interests at all, but that’s another story).
Howard F. 07.03.21 at 8:37 pm
OK, here’s what bothers me. What part of the argument against free public college would not have applied equally well 100 years ago to free public high school?
steven t johnson 07.03.21 at 9:01 pm
A policy is progressive as long as it reduces the ratio of resources between the more and the less advantaged, and does not increase the absolute gap in resources between them.
What’s the use of a label like “progressive?” Why, it’s the use of any label, a quick way to find what you’re looking for, to make choices. If you don’t believe in label, have someone black out all the labels on every can and box in your kitchen. Or if you don’t believe whether accuracy matters, switch the labels in the medicine cabinet. [Do not do this at home]
Given these elementary considerations, the definition does matter. Both misleading vagueness and unnecessary specificity are to be avoid.
“Advantage” is misleadingly vague. Some advantages are imaginary or grossly exaggerated (I suspect the dismissal of the problem of student debt sharply underestimates the lifetime burden on recent college students.) Related to this is “resources,” which should I think distinguish between family income and family property.
Becoming more specific, we change to “A policy is progressive as long as it reduces the ratio of incomes between the higher and lower incomes, and more progressive if it reduces the ratio of property holdings between the higher and lower levels of ownership and does not increase the absolute gap in resources between them.” The lifetime outcomes of property ownership are a reason to see helping college students as more progressive than merely shifting income. Rewriting tax policy is also a progressive (or regressive) issue but in context of debt relief/free education is a diversion.
But getting too specific is also a risk. The bit about “absolute gap” is too specific. Worse it falsifies the issue. Progressive policies, despite William F. Buckley et al., are not merely expressions of envy. Also, if inequality were the issue per se, confiscation of property and sumptuary laws of various sort would be on the table too. If you must get specific, the correct specificity must be about need, not idle indulgence in ressentiment.
Here what you might call the reverse widow’s mite principle applies, where the value of the gift to the widow depends on her wealth as well.
We then change to “A policy is progressive as long as it reduces the ratio of incomes between the higher and lower incomes, and more progressive if it reduces the ratio of property holdings between the higher and lower levels of ownership and increases the number of people meeting their needs.” The common sense of universal programs being rights rather than charity done at the expense of the rich, justifying their opposition, means that even some flat rate increase in the incomes or property of the owners can be progressive. The less of that in principle the more progressive, I suppose, but no program is regressive, because it leaves more people in need, on purpose.
In the US, hIigher education is already a matter of national policy, with direct government intervention even to the individual student. k12 education is still a state function and the extensive federal involvement is highly constrained. The seemingly innocuous suggestion of increasing k12 spending is calling for a radical change in government. It’s not even clear that it’s feasible to nationalize the k12 system. It certainly hides the political cost. Thus, I can’t agree that opposing increasing spending on higher education rather than at the imagined expense* of k12 in a nonexistent national lower education system is a legitimate counterposition.**
Therefore, the opposition to debt relief/free college is not progressive, but is regressive. And the effort to find some rationale for saying the opposite I think fails. The point that debt relief/free college isn’t superprogressive would be true, but that’s not the claim. The claim is that it is not even the best use of resources but a step back. I think this is wrongheaded.
**It’s not an opportunity cost either. Opportunity cost is potential income from another choice. The same “person” has to be in a position to lose the potential income. The opportunity costs for higher education and k12 go to different people. This is why orthodox (aka “correct?”) economics has difficulty with government spending. It’s why orthodox economics see individuals as the only legitimate choosers. It’s what they mean by “consumer sovereignty” as near as I can tell.
*The notion that all spending choices are automatically zero sum games is a very conservative position, I think, even if you are a militant foe of MMT, today’s greatest menace to humanity. The either/or is only required if you think banks should be able to create money but not mere governments and therefore a balanced budget is a law of nature, or maybe even a law of God.
steven t johnson 07.03.21 at 9:03 pm
Plainly, I hope, it should be “No program is progressive that leaves more people in need.”
David Gastil 07.04.21 at 1:06 am
I’ll admit the “back-of-the-envelope” comment was unfair. This is obviously a personal issue for me and many people I know and I felt we were being dismissed and took offense. Please consider that this is an issue that could determine the future prosperity of millions of young(er) Americans and that for us an (allegedly) regressive solution is better than nothing at all — which is what everyone else seems to be offering.
J-D 07.04.21 at 1:25 am
Ya think? You’re more generous than I would be.
An Australian satirist put the following words (approximately; I quote from memory) in the mouth of our then Prime Minister: ‘A lot of people have complained that this government does not have policies. Well, we do. We’re going to lie and cheat and break promises a lot, and put the boot in wherever possible.’
Gorgonzola Petrovna 07.04.21 at 7:30 am
@39
Is there a possibility that they simply promise things as deemed necessary by political consultants (what you call “forging the coalition”), and the possibility of implementation doesn’t even enter the equation. Those who complain later are ridiculed as adherents of ‘the Green Lantern theory of the presidency’. When there is no easy excuse, like in 2009, some of your own senators (Joe Lieberman then, Joe Manchin this time) are appointed to be spoilers, and then it’s back to the ‘Green Lantern’. And so it goes.
Harry 07.04.21 at 2:09 pm
“the possibility of implementation doesn’t even enter the equation.”
I don’t know. For sure, most politicians must know that most of what they promise won’t get done, even Presidential candidates, but they also probably think that at least some of what they are really determined to get done can be. I assume, eg, that Clinton, in 2016, was completely cynical with her partial free college promise, believing that the legislative process would turn it into something not so bad.
Cameron’s promise of a Brexit vote is a great case of a promise made under the assumption that he would not be able to implement it (because he’d have to have coalition partners who’d disallow it as a condition of participation). Then, winning, and it being in the manifesto, he had to do it.
Harry 07.04.21 at 2:10 pm
David (43) thanks for that very gracious reply to a not very gracious response to your comment, I really appreciate it.
Gorgonzola Petrovna 07.04.21 at 3:00 pm
It’s just that “the Green Lantern theory” popped up so suddenly in 2013, and quickly turned into an industrial-strength talking point for why only naive fools expect campaign promises to be fulfilled. It’s common sense now.
J-D 07.05.21 at 12:39 am
The more widely held an educational qualification is, the less the advantage it provides in the job market. An educational qualification held by only 5% can provide a substantial advantage in the job market; the same qualification held by 95% cannot. Near-universal secondary education must destroy the value of secondary education in the job market and can therefore only be justified (if at all) by some other benefit; near-universal tertiary education must destroy the value of tertiary education in the job market and can therefore only be justified (if at all) by some other benefit.
Tim Worstall 07.05.21 at 1:18 pm
“The more widely held an educational qualification is, the less the advantage it provides in the job market.”
This is true only if education’s value is purely and solely as a signal of relative position.
It is possible to believe – however forlorn the hope in the face of the current education system – that some part of the value might be in actually learning something.
Harry 07.05.21 at 2:06 pm
“The more widely held an educational qualification is, the less the advantage it provides in the job market”.
Other things being equal, sure. But they’re not. The labor market is dynamic, and the demand for different skills changes. More people get Bachelor’s degrees now than in the past, and yet the wage premium attached the Bachelor’s degree has increased relative to the past. Of course if, NOW, fewer people had Bachelor’s degrees than do, they’d command an even greater premium.
SamChevre 07.05.21 at 2:13 pm
More people get Bachelor’s degrees now than in the past, and yet the wage premium attached the Bachelor’s degree has increased relative to the past.
I’d note that part of this is a “fake premium” – driven by high-school grad wages falling, and jobs that used to be available to high school grads requiring college degrees.
If this represents a real change in skills, that may make sense: if it’s just a credential race, it makes everyone worse off except people who work at colleges. (My observation at work was that older secretaries with only high school diplomas were not in any way worse at their jobs than the younger secretaries who had college degrees.)
MisterMr 07.05.21 at 3:04 pm
“More people get Bachelor’s degrees now than in the past, and yet the wage premium attached the Bachelor’s degree has increased relative to the past.”
This study (via wikipedia) says the opposite:
https://files.stlouisfed.org/files/htdocs/publications/review/2019/10/15/is-college-still-worth-it-the-new-calculus-of-falling-returns.pdf
It starts with a cite from the St. Louis Fed that says:
“The college income premium is the extra income earned by a family whose head has a college degree over the income earned by an otherwise similar family whose head does not have a college degree. This premium remains positive but has declined for recent graduates. ”
So, who is right? Hmm?
Paul Mullins 07.05.21 at 3:06 pm
Thanks for sharing!
MisterMr 07.05.21 at 3:32 pm
As an addendum to my previous comment, from the same paper, p.301:
“Family Income. The income premium enjoyed by the median bachelor’s degree family over the median nongraduate family (the college income premium) has held steady during the past few decades at roughly 100 percent (Figures 3 and 4). The income premium enjoyed by the median postgraduate family over the median nongraduate family (the postgraduate income premium) has increased, standing in 2016 at about 175 percent.
[…]
What These Figures Hide. The median income and net worth figures from aggregate data shown here turn out to be misleading when careful account is taken of key underlying demographic dimensions and family and individual characteristics. Comparing families that are similar in terms of race and ethnicity, decade of birth, and family size, we find that the college income and wealth premiums are quite variable […]”
then the paper goes on with more in-detail statistical analisys, leaving me even more confused.
:(
nastywoman 07.05.21 at 4:03 pm
and you guys may discuss this as long as y’all like
BUT there is
NO WAY –
that one day
ALL education –
(Higher or Lower)
in the US
will be
as
FREE –
as
in Konstanz
Germaneee.
(and did that rhyme?)
nastywoman 07.05.21 at 4:08 pm
OH MY?
I meant to write:
there is
NO WAY –
that one day
ALL education –
(Higher or Lower)
in the US
WON’T
be
as
FREE –
as
in Konstanz
Germaneee….
When a (free) ‘education’ will be considered as much of a (progressive) ‘right’ as Free Health Care’.
steven t johnson 07.05.21 at 4:24 pm
The view that higher education is solely about credentials for premium wages/salary/position is soundly right-wing, to be sure. The implied suggestion that it is regressive to undermine the credentials’ value by excessively educating people with debt relief/free college serves this perspective.
The comment from SamChevre raises the issue of wages being too low. That’s not educational policy. But the argument that debt relief/free college is regressive makes no sense to me, as fewer graduates won’t help the uncredentialed. (If the claim is that it does, it needs some explanation.) And recent graduates desperate for a any income to cope with massive debt are not in a place to bargain more effectively, credentials or no.
The high school diploma was once upon a time very much like the bachelor’s degree, something not everyone acquired. Nor was it agreed everyone needed to acquire it, Extension of free secondary education to the entirety of the population does not seem to me to have been regressive. The OP’s logic would apply in this instance too.
Harry 07.05.21 at 8:36 pm
“The view that higher education is solely about credentials for premium wages/salary/position is soundly right-wing, to be sure.”
Absolutely. I’m not sure who in this discussion has said anything like that. (I include Tim W who, I think, but he can correct me if I’m wrong, and if so I apologize, would be comfortable with the label ‘right wing’.)
“The implied suggestion that it is regressive to undermine the credentials’ value by excessively educating people with debt relief/free college serves this perspective.”
I didn’t understand this sentence. Just to be clear, the proposal for debt relief has nothing to do with education. It wouldn’t educate anyone, or increase spending on education, or anything. It’s a transfer of wealth to people who went to college and still have debt from that time. The proposal is a one-off (lots of interesting questions about one-off policies, too complicated to go into).
Also. Personally I do think of the proposed spending on free public college as spending on higher education. But plenty of others don’t, and with reason. It is, effectively (though indirectly), a transfer to students and their families. The actual proposals (Warren and Sanders) wouldn’t increase spending on instruction, and aren’t designed to. The idea is (crudely) that, whereas currently tuition is paid by families, under free public college it is paid by the Federal government. I won’t go into it here, but there are reasons for expecting free public college to result, over time, on less spending on instruction and, correlatively, lower quality (making college even more about credentialing, and even less about actual education).
J-D 07.06.21 at 1:03 am
I certainly intended to suggest no such thing, but I suspect Tim Worstall misunderstood me as having meant something like that. Was I too terse to be easily comprehensible? I didn’t mean that an educational qualification can have no other value than to improve position in the job market; I meant that it must have some other value for it still to be valuable when it becomes nearly universal. (Am I still being too terse to be easily comprehensible?)
For example: when literacy was rare, it provided a substantial advantage in competing for employment. Where it’s nearly universal, it provides no significant advantage in competing for employment, but that doesn’t mean it’s not valuable: not at all!
MisterMr 07.06.21 at 10:33 am
@Harry 57
“It is, effectively (though indirectly), a transfer to students and their families.”
All government spending advantages this or that citizien, and therefore is a transfer to someone: if the government pays for healthcare, it is transfering money to those families who would otherwise have to pay for their owh healthcare.
Presumably if college was free or at least very cheap more low-ish income family would send their scions to college, isn’t this the whole point of the problem?
There is the problem that as long as college is expensive enough to keep people of lowish income out of it, it works as a substantial barrier to social mobility.
I don’t really understand the logic that since currently it is largely people in the upper percentage of income distribuition that go to college, therefore we should expect this to be true even with substantial subsidies.
I don’t know how USA tertiary education system works, but it seems to me that the biggest risk is that by subsidizing students, colleges will just ramp up tuitions so that the subsidy ultimately goes to the college owners, not to the students; this would require some sort of check, or either the other option would be for the government to just put the money in government owned colleges and keep the tuitions very low.
I will add that I once heard this sort of logic (that government spending on higer education is a subsidy to high income households) from an italian right wing parlamentarian, and I tought that it was a very convoluted logic: it’s based on th assumption that it is normal that people from, say, blue collar families wouldn’t or shouldn’t go to college anyways. I think this is very wrong.
SamChevre 07.06.21 at 11:49 am
The comment from SamChevre raises the issue of wages being too low. That’s not educational policy. But the argument that debt relief/free college is regressive makes no sense to me, as fewer graduates won’t help the uncredentialed. (If the claim is that it does, it needs some explanation.)
That is the claim I’m making: here’s a toy example of why.
Let’s imagine a workplace somewhat like mine, with four broad groups of employees:
1) Managers
2) Professional staff (actuaries, IT, etc)
3) Administrative staff (secretaries, people who answer customer phone calls)
4) Physical maintenance staff (janitors, cafeteria workers)
Just for ease, lets imagine relative wages for each set of roles have stayed constant, and are roughly 6:4:2:1 (janitors make $10 an hour, secretaries make $20, technical staff make $80,000 a year, managers make $120,000 a year).
Over the last 30 years, the requirement for new hires with jobs in the #3 category has gone from a high school diploma to a bachelors degree. And the requirements for being promoted from class #3 to class #1 have also changed to include a bachelors degree. Neither wages nor job requirements have changed-just the required credential.
In this case, the college premium has gone up–but no one is better off. People who want a job in category #3 have to spend time and money getting a completely pointless credential, which benefits colleges–but doesn’t benefit them relative to the counter-factual world where they could get that same job with a high school diploma.
Gorgonzola Petrovna 07.06.21 at 12:33 pm
I feel that tradespeople — plumbers, carpenters, electricians, bricklayers, people who pave driveways and remove snow — probably have much better lives than office plankton. Regardless of their statistical wages. Hell, they probably don’t report half of it anyway. But more importantly, job satisfaction, no alienation.
steven t johnson 07.06.21 at 2:28 pm
SamChevre@60 confuses me, because the requirement for a bachelor’s was imposed by management. They decided not to hire people with high school diplomas. That’s why the debt trap of getting the credential has teeth I still can see how leaving them to pay the debts will help. Requiring managers to hire with fewer credentials is not the proposal.
(By the way, the credential for manager is getting closer to a master’s, especially the famed MBA.)
Harry@37 clarifies that debt relief has nothing to do with education, but is a transfer of wealth. (Sorry I was confused by the proposed reform to a future national school system.) And worse, it would be a one-time, or at least, extraordinary, event. That it is more like the disaster relief checks sent out to everyone, extended increased unemployment benefits, the foreclosure/eviction moratorium and so on. The thing about that is, I don’t see how it was regressive to do these programs. That’s true even in the case of home foreclosures, who are as plausibly categorized as a privileged group as college graduates I think.
Again, I think the value of universal programs over means-tested programs, such as being more practical, more tactical, more a right than a privilege, versus the inherent abuses of means-testing, where privileges can be more imagined than real, means that universal programs are not regressive. That, again, talk of absolute gaps, is too specific to guide us correctly.
Personally, I kept writing debt relief-slash-free college because I didn’t think debt relief would in the end be a one time thing.
The discussion has made me realize that one issue I for one haven’t clarified is that college debt for today’s youth has a strong odor, that it smells odious. And If today’s debtors are required to pay their debts, that too is a “transfer of wealth.” And it has historically been a very popular position. But it is not one that is widely regarded as “progressive.” Populists have long held that cancellation of debts is progressive and the good people have been enraged at this for just as long.
To put it another way, labeling debt relief (or free college) as poison matters. And I don’t think it is.
steven t johnson 07.06.21 at 2:32 pm
PS I’m sorry I forgot to address the objections to free college as devaluing the quality of education. As noted before, the arguments against free college are essentially the same as the arguments against secondary education. The shift to a mass secondary education system is notorious for having lowered the quality, at least in the eyes of many critics of education (especially from the right.) All I can say is that there’s more to education than the job credential.
Harry 07.06.21 at 3:35 pm
“the value of universal programs over means-tested programs, such as being more practical, more tactical, more a right than a privilege, versus the inherent abuses of means-testing, where privileges can be more imagined than real, means that universal programs are not regressive.”
I also (generally) prefer universal over means-tested programs. Try getting into a free public college without a high school diploma. It just isn’t a universal program, but one that specifically excludes those who have gotten the least out of k-12 education.
And nobody at all in the debate is proposing to eliminate means-testing. It just isn’t on the agenda. Everyone on the free public college side, and most of those who oppose it, support increasing and expanding Pell Grants. Means-testing is baked in to all serious proposals. I actually can’t think of anyone who is in favor of eliminating Pell Grants.
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