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Saturday, July 23, 2011

What has Changed 05 - The Cost of Schools Continues to Rise Faster than Inflation

The costs of schools (at all levels) is rising faster than inflation and at a higher rate than the increase in household earning power. More and more of each national dollar earned is going into education. The curve of education spending parallels medical spending, for many of the same reasons. This is more salient at the university levels, where subsidies are considerably less than subsidies for K-12.

This has been true of the last 30 years, and will likely increase moving forward. The education-industrial complex will want to get the United States in a classroom-hours race with China or India.

But at some point, we as a nation will realize that we cannot afford the current trajectory, and we may not be able to sustain even the current level. Despite the rhetoric from those in the business, the relationship between classroom-hours and economic competitiveness does not rise indefinitely, but rather has a significant inflection point.

So while many parents are happy with today's schools (until they hit college), they will soon face a revolt of the taxpayer base or the need to reduce drags on the economy by various levels of governments.

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