"Education Costs" - Deb Milbrath, Cartoon Movement
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Tuesday, February 12, 2019
Wednesday, July 18, 2018
Thursday, August 11, 2016
Jamaican trek convinced me development schemes rarely work
The main problem is that the public, around the world, still thinks that the developed countries built major international financial & trade organizations, like IMF (International Monetary Fund), World Bank, & WTO (World Trade Organization) to help in the development of developing countries of Africa, Asia, & Latin America. That is so not the case.
Actually, these organizations were made to make it seem like transferring money from developed countries to developing countries, in the name of a good cause, & of course, making it look like the developed countries are contributing their fair share to make the world a better place. But this is not the case. IMF & World Bank do transfer money to developing countries but with such restrictive terms & conditions that the organizations who are supposed to work in the field with those loans etc. have their hands tied behind their backs. Interest payments on those funds are also astronomical due to several factors; political volatility, civil unrest, lack of proper governance, corruption, market volatility etc.
But, then, why do IMF & World Bank hand billions of $$$ to corrupt officials in developing countries, who are well-known corrupt, thanks to organizations like Transparency International (I have a problem with them, too, but that's for another place & time)? First, these international financial organizations hand over billions to corrupt officials without any questions asked, & when those officials are pushed out of the government, & people want a change for the better, that same poor public is hit with economic sanctions (which further raises interest rates on those billions of loans) & are asked to pay back those loans (which were given to well-known corrupt officials) through hard austere budgets. WTO also works in tandem with these organizations by directly / indirectly advocating for trade barriers, which help the incumbents (developed countries) expand their economic might all over the world while keeping the economies of the developing countries tied up in knots from which they can never try to get out or severely change their economic system.
Of course, in such dire economic times, like we are currently seeing in Greece, the public starts to filter out of the country to seemingly better prospects in terms of life, economy, jobs, education etc. Those economic migrants are then hired as general labourers in developed countries, which provided those loans in the first place. With no / scarce jobs & educated people out of the country, that developing country has its back against the wall, with hands & feet tied behind its back. The public which is left behind in the country are financially constrained to grow the economy, which in itself, running on a very austere budget, & government can't pour money in the economy because of austerity, & hence, crime, civil unrest, corruption, political & market volatilities rear their ugly heads, which in turn, require the country to always essentially have its hand out for more loans & funds. Hence, the developing countries are always stuck in the mud, so to say, & can never seem to get out of it to become a developed country.
So, who really benefits with these international organizations? Developed countries. They get their interests on those loans. They get cheap & educated labour from these developing countries. Their companies have the world to expand their markets & export all over the world, which in turn, helps keep the trade balances & monetary value of their currencies in a healthy shape. All the while, the developing countries stay in the "developing" pool & get the blame for not being able to ever develop itself.
---------------------------------------------------------------------------------
Jamaica is a small country full of clever, intelligent people who are being poorly served by the world that historically shaped it. Remarkably, this painful past has somehow led to an ability for it to punch far above its weight.
In February 2015 I had the opportunity to experience first hand the mood & feeling of the people by walking Jamaica from east to west accompanied by 10 local people on the One-Love One-Step walk. We hiked from Morant Point to Negril, through the most neglected parishes over the mountains & into farming communities. This is a country full of stories & folklore & to understand the people, it is critical to listen to them.
The focus of the walk was to highlight the local issues surrounding climate change & to feel the pulse of people’s lives. We interviewed & filmed over a hundred Jamaicans talking about how they feel & what their expectations are for their future & those of their children. The only word I can distil to share with you is hopelessness. It is endemic & it is corroding the heart of this nation.
The economy is built on the extraction of natural resources, sugar, bauxite, people. Most of the money earned from tourism leaves the island & a modern-day exodus is killing the country, a classic brain drain towards the provision of a low-cost labour force of farm workers & chambermaids in the US & Canada, working on temporary visas doing the jobs no one else wants to do.
Now in the third year of an IMF-backed economic programme, Jamaica is running the most austere budget in the world, with a primary surplus of 7.5%. Even Greece, which is facing a tense standoff with the IMF & European authorities over its debt, is only expected to run a primary surplus of 3% of GDP this year & 4.5% for years thereafter – & this is widely considered to be politically unsustainable.
I have seen millions of dollars wasted in Jamaica & across the Caribbean, I have also seen this happen in India when I was working there developing primary healthcare opportunities. In my experience, much of the waste is not caused by local bodies but by the organisations that provide the funding. They inadvertently wrap local people up in red tape, creating unrealistic outputs based on feeding their own need to hit internal & international targets.
Again & again I have seen fantastic local people frustrated by a system that is not designed to fit them, that is not built on their story but some self-serving development corporation that purveys a one-size-fits-all approach. These agencies then blame local people & organisations for failure. An example is the coffee industry, focused only on Blue Mountain (BM) coffee which received investment & development, both internal & external, & has led to the desertification of many small coffee farms throughout Jamaica – 80% of all BM coffee is sold to one major Japanese customer.
There is a slow re-introduction of freshwater Tilapia farming & Cassava processing plants but they are built on crumbling & undeveloped sites because of the tragic mismanagement of the Financial Sector Adjustment Company (Finsac) & the last big hurricane to hit the island. Development money in these sectors rarely reaches the small farmer. This has led to increasing the crime & praedial larceny rates (the theft or agricultural produce or livestock).
The time has come for a slow development movement, built on the stories & realities of local people. Last year I commissioned Uncovering Authentic Jamaica, a piece of social research, to better understand the Jamaican people & their development needs.
“People are our greatest asset. But they want to get out,” said one hotelier at Treasure Beach tourist trap. We discovered many tangible opportunities, most of which existing development agencies ignore or do not understand as they do not fit the standard model. For example, only focusing on women’s development doesn’t fit a country like Jamaica where the young men are falling woefully behind the women both in job opportunity & educational attainment. Much is left un-researched in Jamaica because it is a proud country full of patriotic people & Brand Jamaica has to be maintained.
There are good things happening & Jamaicans do have an indomitable spirit. A group of young men are changing their world & creating an eco village in the middle of Kingston & organisations such as Farm-up Jamaica are ringing slow but steady change.
As all good gardeners know, it is best to water a tree at the drip line, the area under the outer circumference of the branches. This is where the tiny rootlets are located that take up water for the tree. Trees should be watered here, not at the base or they may develop root rot. Applying this thinking to development would consider how interventions are initiated at the right place at the right time. Present intervention often has a scatter-gun approach. There is a lack of robust, focused & brave investment.
If we apply “drip line” thinking to emerging economies, then we identify exactly where key interventions should be applied. Support this with an impactful business development model, increasing value chain share, & thinking beyond fair-trade, we could create a pivotal change.
The future is bright, but only if we work bravely to restructure debt interest payments & find a better solution for Jamaica than crushing austerity, declining living standards & growing hopelessness.
Dee Kyne is a social entrepreneur & environmentalist working to end ecocide.
Actually, these organizations were made to make it seem like transferring money from developed countries to developing countries, in the name of a good cause, & of course, making it look like the developed countries are contributing their fair share to make the world a better place. But this is not the case. IMF & World Bank do transfer money to developing countries but with such restrictive terms & conditions that the organizations who are supposed to work in the field with those loans etc. have their hands tied behind their backs. Interest payments on those funds are also astronomical due to several factors; political volatility, civil unrest, lack of proper governance, corruption, market volatility etc.
But, then, why do IMF & World Bank hand billions of $$$ to corrupt officials in developing countries, who are well-known corrupt, thanks to organizations like Transparency International (I have a problem with them, too, but that's for another place & time)? First, these international financial organizations hand over billions to corrupt officials without any questions asked, & when those officials are pushed out of the government, & people want a change for the better, that same poor public is hit with economic sanctions (which further raises interest rates on those billions of loans) & are asked to pay back those loans (which were given to well-known corrupt officials) through hard austere budgets. WTO also works in tandem with these organizations by directly / indirectly advocating for trade barriers, which help the incumbents (developed countries) expand their economic might all over the world while keeping the economies of the developing countries tied up in knots from which they can never try to get out or severely change their economic system.
Of course, in such dire economic times, like we are currently seeing in Greece, the public starts to filter out of the country to seemingly better prospects in terms of life, economy, jobs, education etc. Those economic migrants are then hired as general labourers in developed countries, which provided those loans in the first place. With no / scarce jobs & educated people out of the country, that developing country has its back against the wall, with hands & feet tied behind its back. The public which is left behind in the country are financially constrained to grow the economy, which in itself, running on a very austere budget, & government can't pour money in the economy because of austerity, & hence, crime, civil unrest, corruption, political & market volatilities rear their ugly heads, which in turn, require the country to always essentially have its hand out for more loans & funds. Hence, the developing countries are always stuck in the mud, so to say, & can never seem to get out of it to become a developed country.
So, who really benefits with these international organizations? Developed countries. They get their interests on those loans. They get cheap & educated labour from these developing countries. Their companies have the world to expand their markets & export all over the world, which in turn, helps keep the trade balances & monetary value of their currencies in a healthy shape. All the while, the developing countries stay in the "developing" pool & get the blame for not being able to ever develop itself.
---------------------------------------------------------------------------------
Jamaica is a small country full of clever, intelligent people who are being poorly served by the world that historically shaped it. Remarkably, this painful past has somehow led to an ability for it to punch far above its weight.
In February 2015 I had the opportunity to experience first hand the mood & feeling of the people by walking Jamaica from east to west accompanied by 10 local people on the One-Love One-Step walk. We hiked from Morant Point to Negril, through the most neglected parishes over the mountains & into farming communities. This is a country full of stories & folklore & to understand the people, it is critical to listen to them.
The focus of the walk was to highlight the local issues surrounding climate change & to feel the pulse of people’s lives. We interviewed & filmed over a hundred Jamaicans talking about how they feel & what their expectations are for their future & those of their children. The only word I can distil to share with you is hopelessness. It is endemic & it is corroding the heart of this nation.
The economy is built on the extraction of natural resources, sugar, bauxite, people. Most of the money earned from tourism leaves the island & a modern-day exodus is killing the country, a classic brain drain towards the provision of a low-cost labour force of farm workers & chambermaids in the US & Canada, working on temporary visas doing the jobs no one else wants to do.
Now in the third year of an IMF-backed economic programme, Jamaica is running the most austere budget in the world, with a primary surplus of 7.5%. Even Greece, which is facing a tense standoff with the IMF & European authorities over its debt, is only expected to run a primary surplus of 3% of GDP this year & 4.5% for years thereafter – & this is widely considered to be politically unsustainable.
I have seen millions of dollars wasted in Jamaica & across the Caribbean, I have also seen this happen in India when I was working there developing primary healthcare opportunities. In my experience, much of the waste is not caused by local bodies but by the organisations that provide the funding. They inadvertently wrap local people up in red tape, creating unrealistic outputs based on feeding their own need to hit internal & international targets.
Again & again I have seen fantastic local people frustrated by a system that is not designed to fit them, that is not built on their story but some self-serving development corporation that purveys a one-size-fits-all approach. These agencies then blame local people & organisations for failure. An example is the coffee industry, focused only on Blue Mountain (BM) coffee which received investment & development, both internal & external, & has led to the desertification of many small coffee farms throughout Jamaica – 80% of all BM coffee is sold to one major Japanese customer.
There is a slow re-introduction of freshwater Tilapia farming & Cassava processing plants but they are built on crumbling & undeveloped sites because of the tragic mismanagement of the Financial Sector Adjustment Company (Finsac) & the last big hurricane to hit the island. Development money in these sectors rarely reaches the small farmer. This has led to increasing the crime & praedial larceny rates (the theft or agricultural produce or livestock).
The time has come for a slow development movement, built on the stories & realities of local people. Last year I commissioned Uncovering Authentic Jamaica, a piece of social research, to better understand the Jamaican people & their development needs.
“People are our greatest asset. But they want to get out,” said one hotelier at Treasure Beach tourist trap. We discovered many tangible opportunities, most of which existing development agencies ignore or do not understand as they do not fit the standard model. For example, only focusing on women’s development doesn’t fit a country like Jamaica where the young men are falling woefully behind the women both in job opportunity & educational attainment. Much is left un-researched in Jamaica because it is a proud country full of patriotic people & Brand Jamaica has to be maintained.
There are good things happening & Jamaicans do have an indomitable spirit. A group of young men are changing their world & creating an eco village in the middle of Kingston & organisations such as Farm-up Jamaica are ringing slow but steady change.
As all good gardeners know, it is best to water a tree at the drip line, the area under the outer circumference of the branches. This is where the tiny rootlets are located that take up water for the tree. Trees should be watered here, not at the base or they may develop root rot. Applying this thinking to development would consider how interventions are initiated at the right place at the right time. Present intervention often has a scatter-gun approach. There is a lack of robust, focused & brave investment.
If we apply “drip line” thinking to emerging economies, then we identify exactly where key interventions should be applied. Support this with an impactful business development model, increasing value chain share, & thinking beyond fair-trade, we could create a pivotal change.
The future is bright, but only if we work bravely to restructure debt interest payments & find a better solution for Jamaica than crushing austerity, declining living standards & growing hopelessness.
Dee Kyne is a social entrepreneur & environmentalist working to end ecocide.
Thursday, March 17, 2016
The Interview: Nobel laureate & economist Joseph Stiglitz
What I liked from this interview is about a little discussion on economic & financial inequality among the public. Politicians & economists of the world are trying to increase demand, & hence, GDP, but they are not trying to resolve the root problems of the recession & slow recovery, & keep trying to put in place harsh austerity measures for the poor public & tax cuts for the rich. These measures are counter-intuitive & decrease the national demand & hurt the national & international economies even further.
The tax cuts for the rich doesn't entice the rich to take that extra cash & increase the minimum wages or provide more benefits to their workers, & instead, they invest in their private yachts, sports arenas, sports clubs, racing animals, real estate, stock portfolios, or simply horde it all away in tax havens. The harsh austerity measures, coupled with more taxes in some cases, for the poor public reduce the free cash available to them, for discretionary purchases, & in many cases, even for needy purchases, which in turn, reduces aggregate demand in the country.
These measures create economic, financial, & social inequality. People cannot move up the social ladder, since they don't have enough money, but they can definitely move down, which is happening all over the world. The young populations of the world are seeing their dreams crush after spending a fortune on their education & building that dream where they would be owning their own homes, have families, build up their wealth, & finally, retire to a relaxing future. Instead, they are seeing their degrees pretty much worthless & jobs that pay so little that owning homes & building up wealth is becoming a very far-fetched dream. All the while, these same poor youths are also seeing people with no discernible talent making a lot of money, for instance, celebs like the Kardashian family or the rich billionaire kids of new billionaires in Europe, China, India, & Russia.
That inequality starts to breed hatred in these young minds. That hatred then tries to find an outlet in terms of violence; be it gun violence in America or Canada or gang warfare in Latin America or refugee crisis of Europe or ranks of terrorist groups like ISIS & Al-Qaeda in Middle East & Africa swelling up with young Westerners.
So, the root problem of violence in Middle East, Latin America, Europe, & in North America are all due to inequality all over the world. If only politicians & economists try to resolve this one major problem, we won't be having these fears of recessions hounding us all the time, & violence would definitely be down all over the world, which in turn, would save billions in arms & weaponry purchases, safety & security apparatus, & of course, millions of lives around the world. Those billions of money can then be used towards helping students in post-secondary institutions with their tuitions, improving infrastructure, creating more companies with subsidies, for instance, for green economies, which in turn, create more well-paying jobs, which in turn, would increase aggregate demand & reduce inequality. If only ... !!!
---------------------------------------------------------------------------------
Nobel laureate Joseph Stiglitz, a professor of economics at Columbia University, has written extensively about inequality in America, including his latest book, The Great Divide: Unequal Societies and What We Can Do About Them. He’ll be a visiting scholar in the new Lind Initiative U.S. Studies at the University of British Columbia this fall.
...
Q: You’ll be lecturing at UBC on global inequality. Why should people be worried about inequality?
A: Inequality is very related to the problems we’re talking about. People at the top spend less money than those at the bottom so when you have redistribution toward the top, aggregate demand goes down. Unless you intervene, you’re going to have a weak economy unless something else happens. That something else could be a bubble. The US tried a tech bubble & a housing bubble, but those were not sustainable answers. So I view inequality as a fundamental part of our macroeconomic weakness. There have always been two theories about inequality. One is that it reflects just deserts. The other is that there are large elements of exploitation & inequality of opportunities. The evidence is overwhelmingly that the increase in inequality is associated with those negative factors. If it were all social contribution, then when the top did better, they would be contributing to everybody’s well-being. That trickle-down hasn’t happened. We’ve seen median income, people in the middle, actually worse off than they were 25 years ago.
Q: You’ve said that inequality is fraying the bonds that hold the US together. That sounds scary. Is it that bad?
A: Oh, I think it is. [It’s behind] a lot of what you see as dysfunctional behaviour & extremism. Particularly, young men are angry. You know, how can people like Donald Trump be so politically successful, running ahead in the Republican primary with no policy other than a sense of anger? What he’s been doing is pointing out the corruption in our system. I mean, Jeb Bush has Florida put $250 million of pension funds into Lehman Brothers & then when he leaves as governor he gets a job at Lehman at a salary of $1.3 million—those things resonate with Americans. The system looks broken.
What I argued in The Great Divide is that societies can’t function without trust, both politically & economically. And in the context of politics, what you see increasingly is young people not voting. The voter turnout in the last election was the lowest it’s been since the Second World War, when a lot of people were off fighting. In 2010, voter turnout among young people was 20%. Americans like to say we’re fighting for democracy, & yet young Americans have come to the view that democracy doesn’t deliver.
Q: It’s been 4 years since you wrote, “Of the one per cent, by the one per cent, for the one per cent,” which gave the Occupy movement its slogan “We are the 99 per cent.” Is inequality getting more attention now?
A: Very much so. You see Hillary Clinton has emphasized it in her campaign, but even the Republicans have said inequality is the major issue. To me that’s one of the optimistic things, that it’s finally moved to the top of a political agenda. The other optimistic note is that you see, across the country, 70% support for increasing the minimum wage. Congress can’t get it through because it’s dysfunctional & so we’re having strong grassroots movements to raise it, in Seattle, Los Angeles, New York. The grassroots people are saying our national government is broken; we have to do something about it.
...
Q: What about Canada? Do you think we have an inequality problem?
A: Oh, yes, clearly. But it’s in the middle of the OECD pack. It’s not as good as the Scandinavian countries. It’s not been doing as good a job as it did in the past in taking inequality of market income & reducing it. Also, you are a natural resource economy, & natural resource economies, with a couple of exceptions, tend to be very unequal. You can, in principle, tax the natural resource rents at very high rates & use that to create a more equal society. The country that’s been most successful at that is Norway. The more typical countries are those in the Middle East where a small group seizes those resources, uses it to buy arms to make sure that they can oppress the remainder, & you get these great inequalities. So Canada is among the better performing of the natural resource economies, but it’s still not up to the best performing.
Q: In Canada the share of income going to the rich has been falling for several years. We have better social mobility than in the US. Why is Canada better on inequality?
A: You have a more egalitarian education system, & I think your health care system is so much better than ours. A third aspect that clearly is part of American history is our racial issue. But the problems of inequality are even within the white group. 20% of American children grow up in poverty, & that means they get inadequate nutrition, inadequate health care, & because we have a very local education system, they get inadequate access to education. With those as a starting base, you perpetuate inequality. That’s why, here in New York, Mayor de Blasio has made a big deal of trying to focus on preschool education, because by 5 years old, there are already huge differences. We’ve finally begun to recognize it.
...
The tax cuts for the rich doesn't entice the rich to take that extra cash & increase the minimum wages or provide more benefits to their workers, & instead, they invest in their private yachts, sports arenas, sports clubs, racing animals, real estate, stock portfolios, or simply horde it all away in tax havens. The harsh austerity measures, coupled with more taxes in some cases, for the poor public reduce the free cash available to them, for discretionary purchases, & in many cases, even for needy purchases, which in turn, reduces aggregate demand in the country.
These measures create economic, financial, & social inequality. People cannot move up the social ladder, since they don't have enough money, but they can definitely move down, which is happening all over the world. The young populations of the world are seeing their dreams crush after spending a fortune on their education & building that dream where they would be owning their own homes, have families, build up their wealth, & finally, retire to a relaxing future. Instead, they are seeing their degrees pretty much worthless & jobs that pay so little that owning homes & building up wealth is becoming a very far-fetched dream. All the while, these same poor youths are also seeing people with no discernible talent making a lot of money, for instance, celebs like the Kardashian family or the rich billionaire kids of new billionaires in Europe, China, India, & Russia.
That inequality starts to breed hatred in these young minds. That hatred then tries to find an outlet in terms of violence; be it gun violence in America or Canada or gang warfare in Latin America or refugee crisis of Europe or ranks of terrorist groups like ISIS & Al-Qaeda in Middle East & Africa swelling up with young Westerners.
So, the root problem of violence in Middle East, Latin America, Europe, & in North America are all due to inequality all over the world. If only politicians & economists try to resolve this one major problem, we won't be having these fears of recessions hounding us all the time, & violence would definitely be down all over the world, which in turn, would save billions in arms & weaponry purchases, safety & security apparatus, & of course, millions of lives around the world. Those billions of money can then be used towards helping students in post-secondary institutions with their tuitions, improving infrastructure, creating more companies with subsidies, for instance, for green economies, which in turn, create more well-paying jobs, which in turn, would increase aggregate demand & reduce inequality. If only ... !!!
---------------------------------------------------------------------------------
Nobel laureate Joseph Stiglitz, a professor of economics at Columbia University, has written extensively about inequality in America, including his latest book, The Great Divide: Unequal Societies and What We Can Do About Them. He’ll be a visiting scholar in the new Lind Initiative U.S. Studies at the University of British Columbia this fall.
...
Q: You’ll be lecturing at UBC on global inequality. Why should people be worried about inequality?
A: Inequality is very related to the problems we’re talking about. People at the top spend less money than those at the bottom so when you have redistribution toward the top, aggregate demand goes down. Unless you intervene, you’re going to have a weak economy unless something else happens. That something else could be a bubble. The US tried a tech bubble & a housing bubble, but those were not sustainable answers. So I view inequality as a fundamental part of our macroeconomic weakness. There have always been two theories about inequality. One is that it reflects just deserts. The other is that there are large elements of exploitation & inequality of opportunities. The evidence is overwhelmingly that the increase in inequality is associated with those negative factors. If it were all social contribution, then when the top did better, they would be contributing to everybody’s well-being. That trickle-down hasn’t happened. We’ve seen median income, people in the middle, actually worse off than they were 25 years ago.
Q: You’ve said that inequality is fraying the bonds that hold the US together. That sounds scary. Is it that bad?
A: Oh, I think it is. [It’s behind] a lot of what you see as dysfunctional behaviour & extremism. Particularly, young men are angry. You know, how can people like Donald Trump be so politically successful, running ahead in the Republican primary with no policy other than a sense of anger? What he’s been doing is pointing out the corruption in our system. I mean, Jeb Bush has Florida put $250 million of pension funds into Lehman Brothers & then when he leaves as governor he gets a job at Lehman at a salary of $1.3 million—those things resonate with Americans. The system looks broken.
What I argued in The Great Divide is that societies can’t function without trust, both politically & economically. And in the context of politics, what you see increasingly is young people not voting. The voter turnout in the last election was the lowest it’s been since the Second World War, when a lot of people were off fighting. In 2010, voter turnout among young people was 20%. Americans like to say we’re fighting for democracy, & yet young Americans have come to the view that democracy doesn’t deliver.
Q: It’s been 4 years since you wrote, “Of the one per cent, by the one per cent, for the one per cent,” which gave the Occupy movement its slogan “We are the 99 per cent.” Is inequality getting more attention now?
A: Very much so. You see Hillary Clinton has emphasized it in her campaign, but even the Republicans have said inequality is the major issue. To me that’s one of the optimistic things, that it’s finally moved to the top of a political agenda. The other optimistic note is that you see, across the country, 70% support for increasing the minimum wage. Congress can’t get it through because it’s dysfunctional & so we’re having strong grassroots movements to raise it, in Seattle, Los Angeles, New York. The grassroots people are saying our national government is broken; we have to do something about it.
...
Q: What about Canada? Do you think we have an inequality problem?
A: Oh, yes, clearly. But it’s in the middle of the OECD pack. It’s not as good as the Scandinavian countries. It’s not been doing as good a job as it did in the past in taking inequality of market income & reducing it. Also, you are a natural resource economy, & natural resource economies, with a couple of exceptions, tend to be very unequal. You can, in principle, tax the natural resource rents at very high rates & use that to create a more equal society. The country that’s been most successful at that is Norway. The more typical countries are those in the Middle East where a small group seizes those resources, uses it to buy arms to make sure that they can oppress the remainder, & you get these great inequalities. So Canada is among the better performing of the natural resource economies, but it’s still not up to the best performing.
Q: In Canada the share of income going to the rich has been falling for several years. We have better social mobility than in the US. Why is Canada better on inequality?
A: You have a more egalitarian education system, & I think your health care system is so much better than ours. A third aspect that clearly is part of American history is our racial issue. But the problems of inequality are even within the white group. 20% of American children grow up in poverty, & that means they get inadequate nutrition, inadequate health care, & because we have a very local education system, they get inadequate access to education. With those as a starting base, you perpetuate inequality. That’s why, here in New York, Mayor de Blasio has made a big deal of trying to focus on preschool education, because by 5 years old, there are already huge differences. We’ve finally begun to recognize it.
...
Monday, February 29, 2016
Students turning to campus food banks as tuition, living costs rise
Now, this article might be based merely on a poll, but it is still reporting on a hidden, but very serious, problem. Tuition keeps getting expensive & inaccessible every academic semester. Students' wages & their parents' incomes are not increasing accordingly. But the hype of getting an education is not only constantly there but becoming an ever-ringing alarm bell.
So, every parent & family wants their children to attend a good post-secondary institution. Good post-secondary institution also charge exorbitant tuition fees, which in part, is due to governments at all levels cutting education funding. That in turn increases tuition fees.
So, unless the parents have a garden of magic trees with leaves of hard cold cash, children will suffer in getting their education. This is especially true for families which don't have enough income & wealth in the first place. If parents don't / can't contribute to their children's education, then their kids' education is affected even worse. As I blogged last year, that some universities are building luxury dorms to cater to children of affluent families, & at the same time, charging exorbitant tuition fees to poverty-stricken students.
Even this food bank mentioned in this article is volunteer-run. Universities & governments still won't help students, who are in dire need to choose between basic food or studies, with enough support to help them focus on their studies than to worry about where their next meal is going to come from, if at all.
This is the terrible condition of poverty-stricken students in first-world countries; from US to Canada to UK. These countries are considered as welfare nations. These countries will charge high taxes but those taxes are paying government ministers' salaries than providing a meal to a hungry student. Then, that hungry student will most likely get even more burdened with debts to fill his stomach & study.
How can we expect a nation to be productive when it can't even provide its poor students with enough food to help them keep their focus on their studies? How can we expect a nation to produce brilliant leaders of tomorrow when a majority of its poor can't even get proper food to keep their brains properly functioning? How can we expect a nation to expect its youth to become the engine of growth & productivity when that young population received no help, whatsoever, when it needed it the most & now, after graduating, it is saddled with thousands upon thousands in student debt?
---------------------------------------------------------------------------------
A new campus food bank at Saint Mary’s University in Halifax is part of a troubling trend, says the Canadian Federation of Students.
Similar services have sprung up on campuses across Canada as tuition fees & living costs have risen along with student debt, national chairperson Bilan Arte said Tuesday.
“Student unions keep having to prioritize this issue because their members keep saying that they’re making these hard choices between tuition and their next meal. This is incredibly alarming for our organization.
“I think it really underscores for us the importance of talking about the inaccessibility of post-secondary education in Canada today.”
The federation, representing more than 500,000 members from 80 students’ unions, is calling on the federal & provincial governments to make higher learning more affordable.
Arte ... said the true extent of student poverty is largely unrecognized & under-reported.
“How many food banks opening on campus is it going to take before governments sort of realize that maybe there’s a problem?”
Financial aid officer Allen Wolfe of Saint Mary’s University said he helped set up the campus service after referring students to local food banks on a weekly basis. The plight of an international student who was going without meals convinced him to act.
“It wasn’t until a long interview with him that I realized he wasn’t eating,” Wolfe said in a telephone interview. “He was starving, basically, but still maintaining perfect grades.
“That’s really what stuck with me this year and what pushed me forward to make this happen.”
Wolfe stressed that, like many campus food banks, the Saint Mary’s service relies on volunteers & is not funded by the university.
“There’s no budget line for this. It’s going to be regularly maintained by food drives.”
Maximum student loan limits have not risen in the last 2 years as food, housing & other prices have gone up, he added.
Wolfe said he also sees many young people who never learned how to properly budget for life on their own.
While campus-specific statistics are not available, Arte referred to a national study released last fall by Food Banks Canada. It found that community food banks across the country support about 841,000 people a month, up 25% since the economic slide of 2008.
“We know that campuses are microcosms of the larger society,” Arte said. “We have generally heard and have seen our members report an increase in the usage of their food banks on campus.”
A new poll just released by CIBC (TSX:CM) found that 51% of college & university students turned to their parents last year for help after running out of cash.
The online survey conducted Aug. 13-17 among 1,001 Canadian parents who are Angus Reid Forum panellists suggested 48% of students from families with incomes higher than $125,000 asked for more money, compared to 52% from families earning less than $75,000.
So, every parent & family wants their children to attend a good post-secondary institution. Good post-secondary institution also charge exorbitant tuition fees, which in part, is due to governments at all levels cutting education funding. That in turn increases tuition fees.
So, unless the parents have a garden of magic trees with leaves of hard cold cash, children will suffer in getting their education. This is especially true for families which don't have enough income & wealth in the first place. If parents don't / can't contribute to their children's education, then their kids' education is affected even worse. As I blogged last year, that some universities are building luxury dorms to cater to children of affluent families, & at the same time, charging exorbitant tuition fees to poverty-stricken students.
Even this food bank mentioned in this article is volunteer-run. Universities & governments still won't help students, who are in dire need to choose between basic food or studies, with enough support to help them focus on their studies than to worry about where their next meal is going to come from, if at all.
This is the terrible condition of poverty-stricken students in first-world countries; from US to Canada to UK. These countries are considered as welfare nations. These countries will charge high taxes but those taxes are paying government ministers' salaries than providing a meal to a hungry student. Then, that hungry student will most likely get even more burdened with debts to fill his stomach & study.
How can we expect a nation to be productive when it can't even provide its poor students with enough food to help them keep their focus on their studies? How can we expect a nation to produce brilliant leaders of tomorrow when a majority of its poor can't even get proper food to keep their brains properly functioning? How can we expect a nation to expect its youth to become the engine of growth & productivity when that young population received no help, whatsoever, when it needed it the most & now, after graduating, it is saddled with thousands upon thousands in student debt?
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A new campus food bank at Saint Mary’s University in Halifax is part of a troubling trend, says the Canadian Federation of Students.
Similar services have sprung up on campuses across Canada as tuition fees & living costs have risen along with student debt, national chairperson Bilan Arte said Tuesday.
“Student unions keep having to prioritize this issue because their members keep saying that they’re making these hard choices between tuition and their next meal. This is incredibly alarming for our organization.
“I think it really underscores for us the importance of talking about the inaccessibility of post-secondary education in Canada today.”
The federation, representing more than 500,000 members from 80 students’ unions, is calling on the federal & provincial governments to make higher learning more affordable.
Arte ... said the true extent of student poverty is largely unrecognized & under-reported.
“How many food banks opening on campus is it going to take before governments sort of realize that maybe there’s a problem?”
Financial aid officer Allen Wolfe of Saint Mary’s University said he helped set up the campus service after referring students to local food banks on a weekly basis. The plight of an international student who was going without meals convinced him to act.
“It wasn’t until a long interview with him that I realized he wasn’t eating,” Wolfe said in a telephone interview. “He was starving, basically, but still maintaining perfect grades.
“That’s really what stuck with me this year and what pushed me forward to make this happen.”
Wolfe stressed that, like many campus food banks, the Saint Mary’s service relies on volunteers & is not funded by the university.
“There’s no budget line for this. It’s going to be regularly maintained by food drives.”
Maximum student loan limits have not risen in the last 2 years as food, housing & other prices have gone up, he added.
Wolfe said he also sees many young people who never learned how to properly budget for life on their own.
While campus-specific statistics are not available, Arte referred to a national study released last fall by Food Banks Canada. It found that community food banks across the country support about 841,000 people a month, up 25% since the economic slide of 2008.
“We know that campuses are microcosms of the larger society,” Arte said. “We have generally heard and have seen our members report an increase in the usage of their food banks on campus.”
A new poll just released by CIBC (TSX:CM) found that 51% of college & university students turned to their parents last year for help after running out of cash.
The online survey conducted Aug. 13-17 among 1,001 Canadian parents who are Angus Reid Forum panellists suggested 48% of students from families with incomes higher than $125,000 asked for more money, compared to 52% from families earning less than $75,000.
Tuesday, February 23, 2016
Growing student debt is entrenching unfairness for a whole generation
Although, this opinion piece is focused on the problem with post-secondary education in UK, & a little bit on US (for comparison purposes), I would say that's the condition of education, & consequently society, mostly everywhere in the world.
Everyone loves to talk about how education is important for everyone in today's society & how education is the key for future economic stability for the nations & financial independence for the individuals. BUT, what no one talks about is how education is keep becoming expensive & jobs are keep becoming dependent on personal & professional networks than mere education.
Education is definitely important & must be attained by everyone. But how can a poor student, & most students are from poor family backgrounds (thanks to the world economy), pay already-exorbitant & ever-increasing school fees? Except a few countries around the world (& you can probably count them on your fingers), most countries have / are cutting their education spending, & hence, education institutes are constantly increasing their fees, which in turn, reduce the chances for a poor student to ever break the cycle of poverty he/she is thrust into & become educated & financially independent.
The fees are increasing because of several factors:
1. Governments at all levels are cutting their education funding. Governments, however, are more than happier to keep increasing their military funding. So, the finite financial power a government has, is being diverted towards making it easier to kill a human than to educate a human.
2. Government officials are being controlled by rich & powerful elites of the country. These elites want a stratified society where masses of poor are at their behest to do their work while they enjoy their days sitting in their golden chairs.
3. Taking the second point further, those rich & powerful elites might have become so rich & powerful through a finance-based economy. For instance, Wall Street has made quite a few individuals rich & powerful in US. Now, those individuals want more & more people to take out loans & hence, get trapped in the continuing & unending cycle of debt. Since, the younger generation keeps being shown the dream that if you get more education, you will one day join those powerful elites, the student enrollment keeps increasing. More student = more student loans, which in turn, helps those rich elites become ever more richer & powerful.
4. Education institutes are becoming more a business than a place to share knowledge. Profit & loss are becoming the focus of the education institutes than increasing the level of humanity through education & hence, making a better society, at the national & global levels. In this quest of making more profits, professors are being given contract jobs with minimum-level wages, while students are being charged ever higher fees.
To make matters worse, & as the opinion piece also mentions, that the earning power of new generation also keeps getting worse & worse. So, the education costs is increasing, which require bigger & bigger loans, but the wages are not keeping up with those education costs either, so it takes longer & longer, decades in most cases, for new graduates to pay off those debts.
As the opinion piece further mentions, education is becoming more "what can I study which will get me more money" instead of "what can I study which will make me a better human". For instance, arts education is being derided for graduating out people who are becoming a drain on the country, since they are not considered useful in money-making professions, whereas, education in Information Technology, Medicine, Engineering, & Business for instance is emphasized because graduates of these faculties have a higher chance of making more money than arts graduates. That's, of course, is creating more graduates with silo mindsets, who are focused more on making money, in any way they can, instead of students who want to love learning their whole lives & want to pursue a more well-rounded education.
Job market is also becoming more network-based than education or even skills-based. Since, education institutes have become "degree-granting industries", they are graduating more & more people with degrees, regardless of whether the society needs those degrees or not. So, a country, & even the world, is ending up being flooded with people with degrees. Every other person is an engineer, an MBA, an accountant, a marketing expert, a communications master & whatnot. Since, there are a finite number of businesses & employers, hiring is being done more on the basis of personal & professional networks than pure merit of education & skills.
All of these factors are resulting in a society, on a national & international level, where more & more graduates are frustrated & depressed with increasing debts & decreasing incomes, an ever-increasing gap between rich & poor, more & more people with multiple degrees but either unemployed or less-than-ideal employment, & a society with siloed mindsets due to the unavailability, & unpopularity, of a rounded education than a quick money-making education.
---------------------------------------------------------------------------------
...
In 2015, English universities are spending £800m on promoting access for disadvantaged students as the quid pro quo for increasing their fees to £9,000 – a patchwork quilt of scholarships, fee-waivers, induction & remedial courses & building links with communities & schools to appeal to students from poorer backgrounds. It seems to be working. Analysis by the recent final report of the Independent Commission on Fees (which I chaired) shows that over the past 5 years the proportion of students from disadvantaged homes has risen markedly.
... If 12,000 more students from poorer homes are enrolling at university than 5 years ago, that hardly compensates for the collapse in part-time student numbers, falling by 152,000 over the same period. The principal cause is fear of debt, a trend that will be accelerated by the ending of maintenance grants in the budget. While part-time numbers are holding up in Scotland, Northern Ireland & Wales, which don’t charge £6,750 for part-time courses, they are plunging in England, which does. Part-time foundation degrees, certificates & diplomas of higher education are people’s second chance, especially for the over-25s, who represent four-fifths of the drop. The number of mature students doing full-time degrees is also falling. Together this represents one of the biggest setbacks to social mobility in modern times.
The notion that Britain’s students are simply shrugging off debts that by 2020 will be approaching £50,000 as universities index fees to inflation, bringing them near to £10,000, is far too optimistic. Today’s 16- to 18-year-olds are beginning to worry as much about debt as their older peers. A ComRes opinion survey commissioned by the Sutton Trust reports that 78% of young people were concerned as potential students about the cost of living, 68% by high tuition fees & 58% by having to repay student loans. They are right. The US is often quoted as the country whose system of student funding most cloesely corresponds to England’s, but because of generous scholarships in private universities & very low fees charged by many state universities, only 70% of US students graduate with debt, which in any case only averages £22,750. In Britain, all students graduate with debt almost twice the US level.
Already in the US there are grave concerns about the social implications. Couples are waiting longer before they marry; the birthrate is falling; home ownership among under-40s is plummeting; & the rate of small business formation by young people is decreasing. As loan default rates rise, the whole exercise threatens to become self-defeating.The consequences in England promise to be more pronounced. Property prices in relation to income are much higher & graduates shouldering student debt are in no position to save up the huge deposit needed to buy a home. Moreover, the fee regime is interacting with a collapse in young people’s real wages – down more than 10% since 2008.
Britain is in the process of creating the most stratified, least socially mobile, cruelly unfair society in
its treatment of the young in the advanced world. The over-50s, rejoicing in the untaxed capital gains they enjoy from buying property a generation ago, will help their own kids, but are not asked to help anyone else’s. As in the US, family formation, the birthrate, home ownership & small business startups are all beginning to be affected & parents will work far into old age to try to help their children. All this to ensure that the allegedly malevolent state is shrunk.
Worse, the debt is structured so that the compound interest rate effect of not paying it off early makes it even more onerous, an effect vastly more likely to hit students from disadvantaged homes. Yes, more are getting to university but, with a few exceptions, not the top ones whose degrees are most valued by employers. Students from advantaged neighbourhoods are 10 times more likely to go to a Russell Group university than those from disadvantaged neighbourhoods. So not only do students from poorer homes have parents not rich enough to be able to help them, their earning power will be less. George Osborne’s legacy, ranging from relaxing inheritance tax to allowing parents to leave their pension pot to their kids & eliminating maintenance grants, will be a society in which the rich are better able to help their indebted children, while the disadvantaged will be left as bottom-tier citizens, renting homes while engaged in a lifelong struggle to repay their student debt. Three-quarters will be paying off loans in their 50s.
And as in the US, default rates are rising. The Department for Business, Innovation & Skills now thinks that 45% of the loans for full-time students will never be repaid, along with 65% of loans to part-time students; the taxpayer will pick up the bill. Indeed, the default rate is now so high that the system is nearly as costly as the low-fee regime it replaced. Meanwhile, universities are finding that more students want to do degrees more likely to deliver high salaries; little by little, they are being transformed from centres of rounded academic teaching & research excellence across the gamut of subjects to high-class employment agencies.
Is any of this what we want as a society? Is it so important that the state consumes only 35.5% of GDP rather than, say, 37% that we are prepared to sacrifice social mobility, entrench class, lower home ownership, enslave a generation to debt & diminish the idea of the university? At the very least, average debt levels should be no higher than those in the US, with many more concessions for those from disadvantaged backgrounds. This is too big a cause to be marginalised as that of the “left”. It is everyone’s – & time mainstream politicians spoke up.
Will Hutton is principal of Hertford College, Oxford
Everyone loves to talk about how education is important for everyone in today's society & how education is the key for future economic stability for the nations & financial independence for the individuals. BUT, what no one talks about is how education is keep becoming expensive & jobs are keep becoming dependent on personal & professional networks than mere education.
Education is definitely important & must be attained by everyone. But how can a poor student, & most students are from poor family backgrounds (thanks to the world economy), pay already-exorbitant & ever-increasing school fees? Except a few countries around the world (& you can probably count them on your fingers), most countries have / are cutting their education spending, & hence, education institutes are constantly increasing their fees, which in turn, reduce the chances for a poor student to ever break the cycle of poverty he/she is thrust into & become educated & financially independent.
The fees are increasing because of several factors:
1. Governments at all levels are cutting their education funding. Governments, however, are more than happier to keep increasing their military funding. So, the finite financial power a government has, is being diverted towards making it easier to kill a human than to educate a human.
2. Government officials are being controlled by rich & powerful elites of the country. These elites want a stratified society where masses of poor are at their behest to do their work while they enjoy their days sitting in their golden chairs.
3. Taking the second point further, those rich & powerful elites might have become so rich & powerful through a finance-based economy. For instance, Wall Street has made quite a few individuals rich & powerful in US. Now, those individuals want more & more people to take out loans & hence, get trapped in the continuing & unending cycle of debt. Since, the younger generation keeps being shown the dream that if you get more education, you will one day join those powerful elites, the student enrollment keeps increasing. More student = more student loans, which in turn, helps those rich elites become ever more richer & powerful.
4. Education institutes are becoming more a business than a place to share knowledge. Profit & loss are becoming the focus of the education institutes than increasing the level of humanity through education & hence, making a better society, at the national & global levels. In this quest of making more profits, professors are being given contract jobs with minimum-level wages, while students are being charged ever higher fees.
To make matters worse, & as the opinion piece also mentions, that the earning power of new generation also keeps getting worse & worse. So, the education costs is increasing, which require bigger & bigger loans, but the wages are not keeping up with those education costs either, so it takes longer & longer, decades in most cases, for new graduates to pay off those debts.
As the opinion piece further mentions, education is becoming more "what can I study which will get me more money" instead of "what can I study which will make me a better human". For instance, arts education is being derided for graduating out people who are becoming a drain on the country, since they are not considered useful in money-making professions, whereas, education in Information Technology, Medicine, Engineering, & Business for instance is emphasized because graduates of these faculties have a higher chance of making more money than arts graduates. That's, of course, is creating more graduates with silo mindsets, who are focused more on making money, in any way they can, instead of students who want to love learning their whole lives & want to pursue a more well-rounded education.
Job market is also becoming more network-based than education or even skills-based. Since, education institutes have become "degree-granting industries", they are graduating more & more people with degrees, regardless of whether the society needs those degrees or not. So, a country, & even the world, is ending up being flooded with people with degrees. Every other person is an engineer, an MBA, an accountant, a marketing expert, a communications master & whatnot. Since, there are a finite number of businesses & employers, hiring is being done more on the basis of personal & professional networks than pure merit of education & skills.
All of these factors are resulting in a society, on a national & international level, where more & more graduates are frustrated & depressed with increasing debts & decreasing incomes, an ever-increasing gap between rich & poor, more & more people with multiple degrees but either unemployed or less-than-ideal employment, & a society with siloed mindsets due to the unavailability, & unpopularity, of a rounded education than a quick money-making education.
---------------------------------------------------------------------------------
In 2015, English universities are spending £800m on promoting access for disadvantaged students as the quid pro quo for increasing their fees to £9,000 – a patchwork quilt of scholarships, fee-waivers, induction & remedial courses & building links with communities & schools to appeal to students from poorer backgrounds. It seems to be working. Analysis by the recent final report of the Independent Commission on Fees (which I chaired) shows that over the past 5 years the proportion of students from disadvantaged homes has risen markedly.
... If 12,000 more students from poorer homes are enrolling at university than 5 years ago, that hardly compensates for the collapse in part-time student numbers, falling by 152,000 over the same period. The principal cause is fear of debt, a trend that will be accelerated by the ending of maintenance grants in the budget. While part-time numbers are holding up in Scotland, Northern Ireland & Wales, which don’t charge £6,750 for part-time courses, they are plunging in England, which does. Part-time foundation degrees, certificates & diplomas of higher education are people’s second chance, especially for the over-25s, who represent four-fifths of the drop. The number of mature students doing full-time degrees is also falling. Together this represents one of the biggest setbacks to social mobility in modern times.
The notion that Britain’s students are simply shrugging off debts that by 2020 will be approaching £50,000 as universities index fees to inflation, bringing them near to £10,000, is far too optimistic. Today’s 16- to 18-year-olds are beginning to worry as much about debt as their older peers. A ComRes opinion survey commissioned by the Sutton Trust reports that 78% of young people were concerned as potential students about the cost of living, 68% by high tuition fees & 58% by having to repay student loans. They are right. The US is often quoted as the country whose system of student funding most cloesely corresponds to England’s, but because of generous scholarships in private universities & very low fees charged by many state universities, only 70% of US students graduate with debt, which in any case only averages £22,750. In Britain, all students graduate with debt almost twice the US level.
Already in the US there are grave concerns about the social implications. Couples are waiting longer before they marry; the birthrate is falling; home ownership among under-40s is plummeting; & the rate of small business formation by young people is decreasing. As loan default rates rise, the whole exercise threatens to become self-defeating.The consequences in England promise to be more pronounced. Property prices in relation to income are much higher & graduates shouldering student debt are in no position to save up the huge deposit needed to buy a home. Moreover, the fee regime is interacting with a collapse in young people’s real wages – down more than 10% since 2008.
Britain is in the process of creating the most stratified, least socially mobile, cruelly unfair society in
its treatment of the young in the advanced world. The over-50s, rejoicing in the untaxed capital gains they enjoy from buying property a generation ago, will help their own kids, but are not asked to help anyone else’s. As in the US, family formation, the birthrate, home ownership & small business startups are all beginning to be affected & parents will work far into old age to try to help their children. All this to ensure that the allegedly malevolent state is shrunk.
Worse, the debt is structured so that the compound interest rate effect of not paying it off early makes it even more onerous, an effect vastly more likely to hit students from disadvantaged homes. Yes, more are getting to university but, with a few exceptions, not the top ones whose degrees are most valued by employers. Students from advantaged neighbourhoods are 10 times more likely to go to a Russell Group university than those from disadvantaged neighbourhoods. So not only do students from poorer homes have parents not rich enough to be able to help them, their earning power will be less. George Osborne’s legacy, ranging from relaxing inheritance tax to allowing parents to leave their pension pot to their kids & eliminating maintenance grants, will be a society in which the rich are better able to help their indebted children, while the disadvantaged will be left as bottom-tier citizens, renting homes while engaged in a lifelong struggle to repay their student debt. Three-quarters will be paying off loans in their 50s.
And as in the US, default rates are rising. The Department for Business, Innovation & Skills now thinks that 45% of the loans for full-time students will never be repaid, along with 65% of loans to part-time students; the taxpayer will pick up the bill. Indeed, the default rate is now so high that the system is nearly as costly as the low-fee regime it replaced. Meanwhile, universities are finding that more students want to do degrees more likely to deliver high salaries; little by little, they are being transformed from centres of rounded academic teaching & research excellence across the gamut of subjects to high-class employment agencies.
Is any of this what we want as a society? Is it so important that the state consumes only 35.5% of GDP rather than, say, 37% that we are prepared to sacrifice social mobility, entrench class, lower home ownership, enslave a generation to debt & diminish the idea of the university? At the very least, average debt levels should be no higher than those in the US, with many more concessions for those from disadvantaged backgrounds. This is too big a cause to be marginalised as that of the “left”. It is everyone’s – & time mainstream politicians spoke up.
Will Hutton is principal of Hertford College, Oxford
Sunday, August 30, 2015
US & Israel inequality champions of developed world - OECD
So, the wealth gap keeps increasing, or in other words, it keeps getting worse ... not in North Korea or China or one of those Middle Eastern monarchies, but in the world's biggest champion of free market & capitalism; US.
In US, the richest 10% of the population earn 16.5 times as much as the poorest 10%. On top of that, the top 5% of American households own almost 91 times the wealth of the average American household.
OECD report cites the reasons for this rising wealth gap to education levels of rich & poor, rise of non-standard work (temporary & self-employment work), & faulty tax systems & erosion of social benefits. Let's examine each of them.
Difference in education is going to increase the wealth gap. But what the OECD didn't look into is that education, in itself, has become so expensive that obtaining an under-graduate degree now requires a fortune, esp. from a good, respected university. Rich kids are supported by their fathers' wealth while they are getting that education, but a poor kid cannot lean on his parents (assuming he/she has one or both) for tuition. Rich kids graduate with no debt to be repaid, but masses of poor kids graduate with mountains of education debt or student loan.
On top of that, education in itself is not going to land one in the higher echelons of corporate America, where they will be paid 6-figure salaries & numerous chances of upward mobility in the corporate hierarchy. Nowadays, it's the age of networking. Of course, rich kids will have that powerful network to lean on, whereas, poor kids are outside of that powerful social circle. So, even when, kids of both social classes have equal education, they are still unequal due to debt levels & network.
That leads to the next point that the rise of non-standard work is due to rising hordes of poor students graduating with degrees but without any network. So, they may still get a job in a company but at the lowest level of corporate hierarchy. If & when the company plans to cut down its costs, the lower rungs of the corporate ladder are cut loose first. Since, those people need the money & have few options, if any, other than keep working with whatever companies are offering them, they accept temporary work & self-employment. Wealthy people have financial & influential networks to pull them into the upper echelons of the corporate world & hence, their jobs never get slashed.
Tax systems are made by legislators, who, in turn, are controlled & influenced by rich people of the country. Since, the rich didn't become rich by handing out their money, they will never willingly ask any legislator to increase taxes on them. So the tax systems will never change for the better. They may become worse, though, for the poor.
Social benefits are usually tied to permanent jobs & higher taxes. Since, permanent jobs are being cut, in favour of temporary work, & taxes will never be raised to help the poor populace, social benefits are only going to be reduced.
So, the question is; will this wealth gap ever reduce? My resounding answer is: NO, IT WILL NOT. Why?
Because, education is only going to get expensive. Good, secure, high-paying, permanent jobs will only go to people with influential networks. Tax systems will only become worse for the poor (& better for the rich), since when politicians have ever tried to upset the hand which feed them (rich business elites). Social benefits are only to be eroded to the point where bare minimums will still be available, but the vast majority of poor won't qualify for most social benefits.
Then, there will be revolutions on the streets, similar to Occupy Wall Street protests, except they will be bloodier & far more violent than the preview the world got back in 2008. Remember the French Revolution. OECD developed countries are going back into that era of a club of rich elites controlling almost all wealth of the nation & their citizenry. History is going to repeat itself.
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“In most countries, the gap between rich & poor is at its highest level since 30 years. Today, in OECD countries, the richest 10% of the population earn 9.6 times the income of the poorest 10%,” said the Organization for Economic Cooperation & Development (OECD) in a report ... . “In the 1980s this ratio stood at 7:1 rising to 8:1 in the 1990s & 9:1 in the 2000s.”
Compare the average 9.6 index with the US, where the richest 10% of the population earn 16.5 times as much as the poorest 10%. The poorest citizens of Israel scrape by on one-fifteenth of the earnings of the richest 10%.
The US also has the widest gap between the income of the richest & the average households. The top 5% of US households own practically 91 times the wealth of the average.
The OECD report, covering the situation in 18 member nations, says half of total wealth resides in the hands of just 10% of population, while the next 50% hold almost all of the second half, leaving the remaining 40% with the scraps - just over 3% of the wealth.
The record level of inequality is explained partly by a wider gap in education between the richest & poorest social groups, leading to lower quality & productivity in the workforce.
Another factor that OECD considers responsible for growing inequality is the growth in what it calls non-standard work, which includes temporary contracts & self-employment.
Since the mid-’90s more than half of all new jobs created in OECD countries fell into this category, according to the report. Families that rely on this type of employment are much more likely to be poor, exacerbating overall inequality.
OECD experts warn that the rising level of inequality is hampering world economic growth.
“High & often growing inequality raises major economic concerns, not just for the low earners themselves, but for the wider health & sustainability of our economies,” the report says. “Put simply: rising inequality is bad for long-term growth.”
The report also cites increasingly less progressive tax systems & social benefits losing ground to inflation as reasons why income redistribution schemes have become less effective as of late. Instead, the study advocates a more direct system of taxation & transfer.
“Redistribution via taxes & transfers is a powerful instrument to contribute to more equality & more growth,” the report says.
It also mentions the increasing number of working women as one of the factors contributing to the growth in inequality. Women earn 15% less than men, according to the report, which says ensuring equal pay for men & women could be one way to reduce the wealth gap.
Latin America is one of the few regions where inequality hasn’t been growing in the last 30 years, despite the social gap there being initially higher, the OECD said.
In US, the richest 10% of the population earn 16.5 times as much as the poorest 10%. On top of that, the top 5% of American households own almost 91 times the wealth of the average American household.
OECD report cites the reasons for this rising wealth gap to education levels of rich & poor, rise of non-standard work (temporary & self-employment work), & faulty tax systems & erosion of social benefits. Let's examine each of them.
Difference in education is going to increase the wealth gap. But what the OECD didn't look into is that education, in itself, has become so expensive that obtaining an under-graduate degree now requires a fortune, esp. from a good, respected university. Rich kids are supported by their fathers' wealth while they are getting that education, but a poor kid cannot lean on his parents (assuming he/she has one or both) for tuition. Rich kids graduate with no debt to be repaid, but masses of poor kids graduate with mountains of education debt or student loan.
On top of that, education in itself is not going to land one in the higher echelons of corporate America, where they will be paid 6-figure salaries & numerous chances of upward mobility in the corporate hierarchy. Nowadays, it's the age of networking. Of course, rich kids will have that powerful network to lean on, whereas, poor kids are outside of that powerful social circle. So, even when, kids of both social classes have equal education, they are still unequal due to debt levels & network.
That leads to the next point that the rise of non-standard work is due to rising hordes of poor students graduating with degrees but without any network. So, they may still get a job in a company but at the lowest level of corporate hierarchy. If & when the company plans to cut down its costs, the lower rungs of the corporate ladder are cut loose first. Since, those people need the money & have few options, if any, other than keep working with whatever companies are offering them, they accept temporary work & self-employment. Wealthy people have financial & influential networks to pull them into the upper echelons of the corporate world & hence, their jobs never get slashed.
Tax systems are made by legislators, who, in turn, are controlled & influenced by rich people of the country. Since, the rich didn't become rich by handing out their money, they will never willingly ask any legislator to increase taxes on them. So the tax systems will never change for the better. They may become worse, though, for the poor.
Social benefits are usually tied to permanent jobs & higher taxes. Since, permanent jobs are being cut, in favour of temporary work, & taxes will never be raised to help the poor populace, social benefits are only going to be reduced.
So, the question is; will this wealth gap ever reduce? My resounding answer is: NO, IT WILL NOT. Why?
Because, education is only going to get expensive. Good, secure, high-paying, permanent jobs will only go to people with influential networks. Tax systems will only become worse for the poor (& better for the rich), since when politicians have ever tried to upset the hand which feed them (rich business elites). Social benefits are only to be eroded to the point where bare minimums will still be available, but the vast majority of poor won't qualify for most social benefits.
Then, there will be revolutions on the streets, similar to Occupy Wall Street protests, except they will be bloodier & far more violent than the preview the world got back in 2008. Remember the French Revolution. OECD developed countries are going back into that era of a club of rich elites controlling almost all wealth of the nation & their citizenry. History is going to repeat itself.
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“In most countries, the gap between rich & poor is at its highest level since 30 years. Today, in OECD countries, the richest 10% of the population earn 9.6 times the income of the poorest 10%,” said the Organization for Economic Cooperation & Development (OECD) in a report ... . “In the 1980s this ratio stood at 7:1 rising to 8:1 in the 1990s & 9:1 in the 2000s.”
Compare the average 9.6 index with the US, where the richest 10% of the population earn 16.5 times as much as the poorest 10%. The poorest citizens of Israel scrape by on one-fifteenth of the earnings of the richest 10%.
The US also has the widest gap between the income of the richest & the average households. The top 5% of US households own practically 91 times the wealth of the average.
The OECD report, covering the situation in 18 member nations, says half of total wealth resides in the hands of just 10% of population, while the next 50% hold almost all of the second half, leaving the remaining 40% with the scraps - just over 3% of the wealth.
The record level of inequality is explained partly by a wider gap in education between the richest & poorest social groups, leading to lower quality & productivity in the workforce.
Another factor that OECD considers responsible for growing inequality is the growth in what it calls non-standard work, which includes temporary contracts & self-employment.
Since the mid-’90s more than half of all new jobs created in OECD countries fell into this category, according to the report. Families that rely on this type of employment are much more likely to be poor, exacerbating overall inequality.
OECD experts warn that the rising level of inequality is hampering world economic growth.
“High & often growing inequality raises major economic concerns, not just for the low earners themselves, but for the wider health & sustainability of our economies,” the report says. “Put simply: rising inequality is bad for long-term growth.”
The report also cites increasingly less progressive tax systems & social benefits losing ground to inflation as reasons why income redistribution schemes have become less effective as of late. Instead, the study advocates a more direct system of taxation & transfer.
“Redistribution via taxes & transfers is a powerful instrument to contribute to more equality & more growth,” the report says.
It also mentions the increasing number of working women as one of the factors contributing to the growth in inequality. Women earn 15% less than men, according to the report, which says ensuring equal pay for men & women could be one way to reduce the wealth gap.
Latin America is one of the few regions where inequality hasn’t been growing in the last 30 years, despite the social gap there being initially higher, the OECD said.
Tuesday, August 25, 2015
Thursday, August 6, 2015
Congratulations, Class of 2015. You're the Most Indebted Ever (For Now)
As I've blogged previously on how education keeps getting more & more expensive to the point that a kid from a middle class or lower (depends how you define "middle class") has to take out large loans to have any chance of completing his/her education, I won't say much in this one. Rich kids don't have any problems in gaining education, assuming that they are actually studying in colleges / universities & not spending time in multimillion $$$ gyms, spas, & dorms, real estate developers are building for them.
Education & its related industries (e.g. financial services, real estate developers, admission services etc.) have become a very profitable businesses on their own. Education is peddled as a must to the kids today, if they want a better job & life in general. Even though, that's not the case, since, it's the age of networking. The stronger & influential your network, you are going to climb the corporate ladder much more easily & quickly. Merit still has a place but not as much as it used to be, say, even a decade ago.
Governments & other organizations will always point to surveys saying how unemployment & salary levels are different among high-school & post-secondary graduates, but what they fail to show is that how those graduates got those jobs in the first place. Most graduates are heavily encouraged to use their own networks to secure jobs & the better your network, the better the job (better = influential).
As the market insiders are constantly claiming now that the next wave of insolvencies are not going to be in housing loans, but in student loans, since good-paying jobs are becoming scarce but education keeps getting more expensive. So students are graduating with bigger & bigger loans without the comparable salaries to pay these loans as quickly as they can, so they can continue on with their lives.
I am definitely not suggesting that children / people should not get more education. No, education is definitely important. But, the society should not be fed the lie that more education will get you a better paying job, since that's not the case. That would be the case, if jobs were based on merit, & not on networks. But, that's not how jobs are secured, nowadays. Expectations should be straightened out in the first place that "people, you should not expect better paying jobs & a secure life with more education."
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The class of 2015 is reaching new heights, though perhaps not the way it had hoped.
College graduates this year are leaving school as the most indebted class ever, a title they’ll hold exclusively for all of about 12 months if current trends hold.
The average class of 2015 graduate with student-loan debt will have to pay back a little more than $35,000, according to an analysis of government data by Mark Kantrowitz, publisher at Edvisors, a group of websites about planning & paying for college. Even adjusted for inflation, that’s still more than twice the amount borrowers had to pay back two decades earlier.
Not only is average debt rising, but more students are taking out loans to finance secondary education. Almost 71% of bachelor’s degree recipients will graduate with a student loan, compared with less than half two decades ago & about 64% 10 years ago.
“It’s unfortunate that college costs are going up & the student aid, the grants, are not going up at the same rate on a per student basis,” Mr. Kantrowitz said. “College is becoming less & less affordable, though it’s still just as necessary.”
Indeed, separate government data show much brighter job & earnings prospects for people with college degrees. Labor Department figures show median weekly earnings at $668 last year for full-time wage & salary workers with only a high-school degree. For those with at least a bachelor’s degree, the figure was $1,193. The unemployment rate also is significantly lower for college grads.
To be sure, the value of a college education varies widely depending the institution & the degree a student acquires. But for now, the investment appears worthwhile.
Parents also are kicking in a big share of college costs. Mr. Kantrowitz’s analysis shows that among parents taking out loans to pay for a child’s education, average debt crept up to $30,867 this year from $29,684 in 2014. About 17% of graduates have parents with loans out on their behalf.
All together, total education debt–including federal & private education loans–will tally nearly $68 billion this year for graduates with a bachelor’s degree & their parents, Mr. Kantrowitz estimates, a more than 10-fold increase since 1994.
Education & its related industries (e.g. financial services, real estate developers, admission services etc.) have become a very profitable businesses on their own. Education is peddled as a must to the kids today, if they want a better job & life in general. Even though, that's not the case, since, it's the age of networking. The stronger & influential your network, you are going to climb the corporate ladder much more easily & quickly. Merit still has a place but not as much as it used to be, say, even a decade ago.
Governments & other organizations will always point to surveys saying how unemployment & salary levels are different among high-school & post-secondary graduates, but what they fail to show is that how those graduates got those jobs in the first place. Most graduates are heavily encouraged to use their own networks to secure jobs & the better your network, the better the job (better = influential).
As the market insiders are constantly claiming now that the next wave of insolvencies are not going to be in housing loans, but in student loans, since good-paying jobs are becoming scarce but education keeps getting more expensive. So students are graduating with bigger & bigger loans without the comparable salaries to pay these loans as quickly as they can, so they can continue on with their lives.
I am definitely not suggesting that children / people should not get more education. No, education is definitely important. But, the society should not be fed the lie that more education will get you a better paying job, since that's not the case. That would be the case, if jobs were based on merit, & not on networks. But, that's not how jobs are secured, nowadays. Expectations should be straightened out in the first place that "people, you should not expect better paying jobs & a secure life with more education."
---------------------------------------------------------------------------------
The class of 2015 is reaching new heights, though perhaps not the way it had hoped.
College graduates this year are leaving school as the most indebted class ever, a title they’ll hold exclusively for all of about 12 months if current trends hold.
The average class of 2015 graduate with student-loan debt will have to pay back a little more than $35,000, according to an analysis of government data by Mark Kantrowitz, publisher at Edvisors, a group of websites about planning & paying for college. Even adjusted for inflation, that’s still more than twice the amount borrowers had to pay back two decades earlier.
Not only is average debt rising, but more students are taking out loans to finance secondary education. Almost 71% of bachelor’s degree recipients will graduate with a student loan, compared with less than half two decades ago & about 64% 10 years ago.
“It’s unfortunate that college costs are going up & the student aid, the grants, are not going up at the same rate on a per student basis,” Mr. Kantrowitz said. “College is becoming less & less affordable, though it’s still just as necessary.”
Indeed, separate government data show much brighter job & earnings prospects for people with college degrees. Labor Department figures show median weekly earnings at $668 last year for full-time wage & salary workers with only a high-school degree. For those with at least a bachelor’s degree, the figure was $1,193. The unemployment rate also is significantly lower for college grads.
To be sure, the value of a college education varies widely depending the institution & the degree a student acquires. But for now, the investment appears worthwhile.
Parents also are kicking in a big share of college costs. Mr. Kantrowitz’s analysis shows that among parents taking out loans to pay for a child’s education, average debt crept up to $30,867 this year from $29,684 in 2014. About 17% of graduates have parents with loans out on their behalf.
All together, total education debt–including federal & private education loans–will tally nearly $68 billion this year for graduates with a bachelor’s degree & their parents, Mr. Kantrowitz estimates, a more than 10-fold increase since 1994.
Wednesday, May 13, 2015
To move beyond boom & bust, we need a new theory of capitalism
Although, this op-ed piece is a good one, posing an important question to think about in regards to the economic policy of a country & for countries, worldwide, my own view says, regardless of which economic policy we come up with, we will still have these booms & busts.
The idea of free markets, capitalism, democracy, social democracy etc are all good & noble, but the problem in them lie in the proper implementation of these ideas. We cannot ever properly implement it ... without religion.
Now, people will groan, what religion has to do with free markets or democracy or capitalism?
I can't talk about this from other religions since I don't know what other religions say or don't say about the problems the whole world is having by adhering to these ideals. I can, though, talk about economic policy & capitalism from Islamic perspective.
Since, this is a very long & deep topic to discuss even from a religious perspective, so I'll talk at a high-level. I will say here that Islam doesn't forbid capitalism. Today's problems are not with Capitalism itself; it's other factors making problems for Capitalism. What are those problems?
1. Greed: Islam abhors greed. Even Christianity has greed as one of its 7 deadly sins. One of the 10 commandments, "thou shall not steal," includes greed (when one is greedy, they will steal to satisfy their need).
Problem is greed is actually considered good in secular or atheist world. For instance, entrepreneurs are told to be hungry & greedy to achieve greatness or whatever they are trying to achieve. So, if Facebook takes your personal data & sell it to third parties for profits, then you can't complain, because it's part & parcel of free markets. Nothing is right or wrong in free markets.
After the 2008 crisis, there was, & still is, a lot of noise about market regulations in US & Europe. Well, the government agencies were made. Regulations were enacted (after they were heavily watered down, thanks to the heavy lobbying efforts from the Wall Street crowd). But, the implementation of those regulations are nowhere near to their initial objective. Why?
Because, for every law a human makes, an "anti-law" a human finds. What's an "anti-law"? A loop hole. We can see all around us that for every law, there are loop holes available.
We humans, regardless of how hard we try to make the strongest possible law, there will always be a loop hole. That's why, religion stopped it at the spiritual level; no greed. So, if bankers or executives or government leaders turn all devout Muslims, or Christians, or Jews or religious people tomorrow, they can't steal from the public to line up their own pockets. They have to shun greed for the public good.
What's that has to do with Capitalism? Capitalism says a society should have private enterprises. That's good & ok. But then, businessmen take that concept & open private companies & then to always earn more money (nobody can satisfy greed), they commit abuses (labour abuses, market abuses, corruption, lies, bribery etc etc) to fatten up their accounts. Of course, the result ends up being a major part of the populations keep becoming poorer & poorer. Inequality & injustice take the rein of society. A few elites take control of the liquidity in the market (money) & start controlling government so it makes policies favouring them (government leaders are paid handsomely). All because of few people became greedy.
2. Interest economy: Islam forbade interest because an economy based on interest creates a rich class & a poor class. Since, the money the rich has is making him/her more money, he/she will always make money without putting in that much effort, whereas, the poor does not have enough money, he/she will have to borrow more money (& hence, pay interest to the rich) to survive.
Relation to capitalism? As I said earlier, nothing is wrong with Capitalism as an idea, but this is one of the many factors which create problems for a society & its people, & then we blame capitalism.
3. Consumerism: It's sort of part of greed; a greed of accumulating / buying more things for yourself. So, of course, Islam abhors consumerism. Modern marketing thrives on this notion. Economy measurement tools, e.g. GDP are dependent on it. The more people buy, the more GDP goes up, the more a country is shown to be developing or doing good, economically.
Relation to capitalism? Again, one of the factors adversely affecting capitalism. In the race to sell more, business people abandon all ethics & morals (lying to people to buy houses with ultra-cheap interest rates, even when they know these people can't afford these houses) & people getting greedy to become homeowners at any cost. Result is in front of you all. After the house mortgages, credit card debts are the next mountain of the world. With ultra cheap interest rates around the world, people are on the hunt to load up their houses with things, even at the cost of racking up huge credit card debts. When interest rates are going to increase, & then people unable to pay their credit card bills or even service interests, the market gonna crash.
We are ready to blame Capitalism for all our economics ills but capitalism has nothing to do with whatever problem we are having. Capitalism only says private enterprises. It doesn't say anything about interest economy, consumerism, human greed, or economic measurement tools (e.g. GDP). But these, & other factors, affect how the economy performs, domestically & internationally. Most of these factors can be controlled only through religion.
Regardless of how much we think we are intelligent to make laws to control these factors, we can never completely eliminate them (there are always loop holes), & they will always win, & when these factors take over the society, the majority of human population suffers. This is not the first time we have seen human greed destroying the world; be it the Roman emperors pillaging other colonies (& for example, heavily taxing the public) to satisfy their greed or the 1 percenters of the current world keep amassing wealth, at the expense of the other 99%, to satisfy their greed.
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This is the year that economics might, if we are lucky, turn a corner. There’s a deluge of calls for change in the way it is taught in universities. There’s a global conference at the Organisation for Economic Co-operation and Development in Paris, where the giants of radical economics ... will get their biggest ever mainstream platform. And there’s a film where a star of Monty Python talks to a puppet of Hyman Minsky.
Terry Jones’s documentary film Boom Bust Boom hits the cinemas this month. Using puppetry & talking heads (including mine), Jones is trying to popularise the work of Minsky, a US economist who died in 1996 but whose name has become for ever associated with the Lehman Brothers crash. Terrified analysts labelled it the “Minsky moment”.
Minsky’s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks & households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, & central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes & commodities rockets. Bust becomes inevitable.
This logical & coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; & that any shocks must be external. It did so by reducing economic thought to the construction of abstract models, which perfectly describe the system 95% of the time, but break down during critical events.
In the aftermath of the crisis ... Minsky’s insight has been acknowledged. But his supporters face a problem. The mainstream has a model; the radicals do not. The mainstream theory is “good enough” to run a business, a finance ministry or a central bank – as long as you are prepared, in practice, to ignore that theory when faced with crises.
That, effectively, describes the situation among the policymaking elite today. They are trying to wrestle the economy back into a state where their models can cope with it again, using measures their theories say are not needed: quantitative easing, bank nationalisations, partial debt defaults & currency devaluations.
The radical, pro-Minsky faction is at a disadvantage because it does not possess a complete alternative model of capitalism. Some have generated computer programs showing how financial crises happen. But, by their own admission, they do not have a complete alternative model of how capitalism works.
They are, admits Dutch finance professor Theo Kocken, “roughly right” rather than “exactly wrong”. Kocken’s solution is to concentrate on why we misperceive risk. Behavioural economics has had a field day since 2008, identifying problems for the human brain when faced with complex risks: oversimplification, overconfidence & “confirmation bias”, where we ignore facts that challenge our existing beliefs. But adding behavioural insights to the Minsky model of financial mania does not turn it into a theory of capitalism.
Here, the parallels with events in physics are obvious. After Einstein’s big breakthrough, we were left with 2 competing – & mutually incompatible – accounts of the laws of physics. Einstein himself was dissatisfied with this, pursuing from the 1920s a “theory of everything”. It is a laudable aim in economics too. And this is where we come to the turning point. The defenders of orthodox economics & the Minsky rebels are, essentially, asking the same question: “What does capitalism normally look like?” The one answers “stable”; the other “unstable”. But it’s the wrong question. The right question is: Where are we in the long arc of capitalist development? Nearer the beginning, the middle or the end? But that question goes to the heart of darkness.
For the mainstream, their convictions about equilibrium & abstract models were always founded on the belief that capitalism is an eternal system: the social arrangement most completely reflecting human nature. Minsky’s followers, as with all followers of JM Keynes, assume that a better understanding of financial mania can stabilise an inherently unstable system. But even physicists, who study a universe that has lasted 13bn years, are prepared to countenance – indeed, are obsessed with modelling – its death.
So the pursuit of theory is obligatory in economics. The holy grail is not a new orthodoxy, cobbled together from Minsky & the remnants of mainstream thought so that bankers can construct trading models to iron out problems created by the way our brains work. The aim should be something bigger to model capitalism’s current crisis within an understanding of its destiny.
For me, the most fundamental question in economics still concerns the 2008 crisis. Was this event the last in a series of shocks needed to allow a third technological revolution to take off? Or was it evidence that capitalism’s tendency to adapt and reshape in response to technology has stalled, or is even finished? That is the shadow we have to jump over in economics. Amid a mania for “new economic thinking”, it is what we need to think hardest about.
Monday, April 13, 2015
Latest trend in student housing: Luxe, off-campus condos
Not only education itself is becoming a business, everything related to it, e.g. student housing, is also becoming a business. Now, we got luxury condos for students. Frankly, these student condos are far better than the condos for the general public.
It seems like that everything in this North American & even European society is becoming multi-tiered:
1. healthcare: rich pay for the private services, while the poor suffer in public hospitals & clinics,
3. residences / housing: rich live in housing & places which are safer & well-maintained, whereas, poor is put into places where infrastructure is coming apart at the seams, safety & security is just for the show (if it exists in the first place), & industries nearby adversely affect the health of those poor people,
4. employment: as I've blogged several times, rich get ahead using their network, regardless of their competence & intelligence, while poor is left behind to fend for some jobs at the bottom of the pile, if there are any jobs left to fend for, in the first place.
5. what's next? Quality & availability of food, water, & heck, even air ... with increasing pollution, better quality products for the rich & lower quality for poor. Other utilities (electricity, sewage infrastructure) ... less public funds for maintenance of infrastructure, so blackouts for poor & rich get uninterrupted supply of electricity.
“The idea of luxury living as a student is kind of mind-boggling. I can’t imagine tanning in between classes,” says Tyler Valiquette, a graduate of the University of Guelph. As a commissioner for the university’s Central Student Association, Valiquette investigated the impact of a proposal by Toronto-based Abode Varsity Living to build a student complex with two linked towers on 17,000 sq. m near the Guelph campus, which he says caters to the 1%.
He calculated rents in the new buildings are likely to be $700 to $800 a month per person in order for investors to make their money back on the condo suites, double the amount he & most of his friends pay for accommodation now. That gentrification could come at a price to other students who cannot afford Abode’s development. “The emergence of these buildings with hundreds of units could really affect rent prices in Guelph, so that’s a huge concern.”
It wasn’t until the early 21st century that private companies began tapping the student housing market. The first was a Texas-based developer called American Campus Communities, which created a Canadian Campus Communities subsidiary soon after its initial public offering in 2004. According to senior vice-president Melinda Farmer, there are 2 projects in Calgary, 2 in Waterloo (the Luxe I & Luxe II are just four blocks from the Icon development) & 3 more in Ontario: Oshawa, Hamilton & London.
“Part of this is driven by the increased numbers of international students,” explains Scott Mabury, the University of Toronto’s vice-president of university operations. “They’re much more likely to take up our first-year residence guarantee. So we have need for more student housing—that’s part of the reason why we want to build a new residence.” As enrolment is growing, endowments are shrinking & government funding is drying up. Universities want more students, but can’t afford to house them all.
Meanwhile, in Vancouver, a local entrepreneur is turning a luxury hotel into housing for international students with rents between $900 & $2,500 in a city with less than 1% vacancy rate. CBIT Education group has 9 similar projects in the planning stages & wants to bring 5,000 new beds onto the market. Viva Suites, which already come with full kitchens with marble countertops, ensuite laundry & views of the nearby mountains & marina, will be renovated to provide 230 beds, while the developer plans to add airport shuttles, daily hot meal service, & access to tutors.
As universities are being run more & more like businesses & it gets easier & easier to get in, Valiquette says they attract a different kind of customer—one with lots of money. The students who choose to live off campus from the beginning will miss out on the residence experience that enriches & augments the classroom lessons & adds to the richness of university life.
Aside from their impact on cities & communities & the university experience, student condos represent a more fundamental problem. By prioritizing comfort, they are undermining the reason universities exist. For the vast majority of students, furthering their education is something they have to do in order to survive, not something they do because it comes with a tanning bed. The view that luxury is the defining aspect of student housing is rooted in the belief that money, not work, is the key ingredient to a student’s success. In this consumer model of education, getting a degree is a lifestyle that is chosen & ultimately purchased.
Until recently, the spirit of student housing remained largely intact. You took a room however it came & ate whatever they served you. You did these things knowingly, even willingly, because you understood that the struggles you encountered, the discomforts you endured, were a rite of passage.
It seems like that everything in this North American & even European society is becoming multi-tiered:
1. healthcare: rich pay for the private services, while the poor suffer in public hospitals & clinics,
2. education: stark differences in quality of education being provided in public & private schools, colleges, & universities,
3. residences / housing: rich live in housing & places which are safer & well-maintained, whereas, poor is put into places where infrastructure is coming apart at the seams, safety & security is just for the show (if it exists in the first place), & industries nearby adversely affect the health of those poor people,
4. employment: as I've blogged several times, rich get ahead using their network, regardless of their competence & intelligence, while poor is left behind to fend for some jobs at the bottom of the pile, if there are any jobs left to fend for, in the first place.
5. what's next? Quality & availability of food, water, & heck, even air ... with increasing pollution, better quality products for the rich & lower quality for poor. Other utilities (electricity, sewage infrastructure) ... less public funds for maintenance of infrastructure, so blackouts for poor & rich get uninterrupted supply of electricity.
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High-end high-rises like Icon, in Waterloo, Ont., are the latest student housing trend in Canada. Owned by private companies & marketed to wealthy families & investors—who buy them & turn them over to management companies to rent to students—so-called “student condos” come with yoga studios, tanning beds, movie theatres, billiards rooms & rooftop patios. Since they emerged onto the Canadian market 3 years ago, they have drawn wide-ranging criticism from neighbourhood groups, some universities, & even the students they want to attract.
High-end high-rises like Icon, in Waterloo, Ont., are the latest student housing trend in Canada. Owned by private companies & marketed to wealthy families & investors—who buy them & turn them over to management companies to rent to students—so-called “student condos” come with yoga studios, tanning beds, movie theatres, billiards rooms & rooftop patios. Since they emerged onto the Canadian market 3 years ago, they have drawn wide-ranging criticism from neighbourhood groups, some universities, & even the students they want to attract.
“The idea of luxury living as a student is kind of mind-boggling. I can’t imagine tanning in between classes,” says Tyler Valiquette, a graduate of the University of Guelph. As a commissioner for the university’s Central Student Association, Valiquette investigated the impact of a proposal by Toronto-based Abode Varsity Living to build a student complex with two linked towers on 17,000 sq. m near the Guelph campus, which he says caters to the 1%.
He calculated rents in the new buildings are likely to be $700 to $800 a month per person in order for investors to make their money back on the condo suites, double the amount he & most of his friends pay for accommodation now. That gentrification could come at a price to other students who cannot afford Abode’s development. “The emergence of these buildings with hundreds of units could really affect rent prices in Guelph, so that’s a huge concern.”
It wasn’t until the early 21st century that private companies began tapping the student housing market. The first was a Texas-based developer called American Campus Communities, which created a Canadian Campus Communities subsidiary soon after its initial public offering in 2004. According to senior vice-president Melinda Farmer, there are 2 projects in Calgary, 2 in Waterloo (the Luxe I & Luxe II are just four blocks from the Icon development) & 3 more in Ontario: Oshawa, Hamilton & London.
“Part of this is driven by the increased numbers of international students,” explains Scott Mabury, the University of Toronto’s vice-president of university operations. “They’re much more likely to take up our first-year residence guarantee. So we have need for more student housing—that’s part of the reason why we want to build a new residence.” As enrolment is growing, endowments are shrinking & government funding is drying up. Universities want more students, but can’t afford to house them all.
Meanwhile, in Vancouver, a local entrepreneur is turning a luxury hotel into housing for international students with rents between $900 & $2,500 in a city with less than 1% vacancy rate. CBIT Education group has 9 similar projects in the planning stages & wants to bring 5,000 new beds onto the market. Viva Suites, which already come with full kitchens with marble countertops, ensuite laundry & views of the nearby mountains & marina, will be renovated to provide 230 beds, while the developer plans to add airport shuttles, daily hot meal service, & access to tutors.
As universities are being run more & more like businesses & it gets easier & easier to get in, Valiquette says they attract a different kind of customer—one with lots of money. The students who choose to live off campus from the beginning will miss out on the residence experience that enriches & augments the classroom lessons & adds to the richness of university life.
Aside from their impact on cities & communities & the university experience, student condos represent a more fundamental problem. By prioritizing comfort, they are undermining the reason universities exist. For the vast majority of students, furthering their education is something they have to do in order to survive, not something they do because it comes with a tanning bed. The view that luxury is the defining aspect of student housing is rooted in the belief that money, not work, is the key ingredient to a student’s success. In this consumer model of education, getting a degree is a lifestyle that is chosen & ultimately purchased.
Until recently, the spirit of student housing remained largely intact. You took a room however it came & ate whatever they served you. You did these things knowingly, even willingly, because you understood that the struggles you encountered, the discomforts you endured, were a rite of passage.
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