Employment growth in universities is not good news

The Statesman Journal reports that hiring in the public universities is a bright spot amidst “all the dark news about employment in Oregon.” As an old Chinese parable asks, is this really good news or bad news?

To a large extent, all the new hiring in universities is a reflection of the bad economic times. As even the same report points out, the lack of employment opportunities while we struggle to claw our way out of the Great Recession has been a significant factor here. The September 2012 Oregon Economic Forecast notes that “college enrollment typically goes up during the time of high unemployment and scarcity of well‐paying jobs when even the older people flock back to college to better position themselves in a tough job market.”

Over the past few years, I have had many “non‐traditional” students in my classes who were there only because their careers had derailed as a result of the economic crisis. It is not any exaggeration, therefore, to suggest that if the economic climate were better, fewer students—traditional and nontraditional alike—would have enrolled in our public colleges and universities. Slower enrollment growth rates would have then resulted in public universities hiring fewer staff.

The other part of the bad news, which is found in that same report, is that the employment surge in higher education has been financed through increases in tuition and fees. “The universities raised tuition 30 percent in that time, bringing in more revenue to pay for more staff.”

There is one other bad news that usually does not blip in our radars until much later. If economic slumps trigger enrollment increases, then similarly economic and employment growth will also cause decreases in enrollment. We hope that sooner, than later, employment growth will pick up, and that the unemployment rate, which is currently at about 8.7 percent, will begin to decrease. Higher education will then return to “normal” enrollment patterns. In the current model, where public institutions are financing the employment growth through increases in tuition and fees, such a return to normal will necessitate massive layoffs in order to balance the books.

However, unlike other industries, higher education is not typically characterized by employment restructuring and we will, therefore, look at sharp increases in tuition and fees. This was our experience after the recession in 2001 when the combination of improved economic conditions and job growth, along with decreased allocation from Salem, triggered rapid tuition increases in community colleges and universities alike. We certainly do not want a déjà vu all over again!

It appears then that during the bad economic times, enrollment increases and so does tuition, and in good economic times enrollment doesn’t rise as fast but tuition and fees do increase. In a context where education is not purely for the sake of understanding and interpreting the world, but primarily for economic betterment, students, and the public, need to clearly understand whether such an investment will generate the returns they expect.