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Tuition rises faster than CPI
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Students are aware of the effects of inflation on the economy from the hikes in tuition and gas, and they may even experience the deflating housing market. It is important to determine if the rises in these costs correspond directly and ethically with the gradual rise of the Consumer Price Index.
The CPI measures the average price level of consumer goods with a focus on the cost of living based on the average calculated spending habits of the American consumer.
The CPI is included here for its historical significance. All spectrums of the political field rely on it to analyze the economy.
The fact is the rise in tuition cost not only corresponds with the CPI, but it is also indicative of the sense of entitlement to higher education many current generation college students and their parents possess.
The issue is not so much that tuition has risen with the CPI, but that tuition rises at an increased rate above and beyond the CPI in relationship with demand. This is troubling because universities are clearly being advantageous of a society that requires a higher education. Rather than uphold a construct of intellectual development, universities instead salivate over the opportunity to shovel in cash.
Here are some examples of how other areas in the market interact with time and how they relate to the CPI.
The selection process for the different areas focused on independence from one another to illustrate differences in ethics and demand.
CPI rate of change: In 1988 the Consumer Price Index was listed at $118.50. In 2008 it now is at $219.96. Overall, there has been an increase of 84 percent and an annual change of 4 percent.
Chocolate bar rate of change: In 1988 the cost of a Hershey bar was 50 cents. In 2008 the cost is 85 cents. There overall has been an increase of 70 percent and annual rise of 3.5 percent. Amazingly, this is less than the annual rise of the CPI itself.
Postal service rate of change: The price of first class stamp in 1988 was 22 cents. In 2008 the cost of a first class stamp is 42 cents. There over all has been an increase of 90 percent and an annual change of 4.5 percent. This displays ethical behavior by our postal service with an increased rate only half a percentage point above the CPI.
Movie ticket rate of change: In 1988 the cost of movie ticket was $3.50. In 2008 the cost is now $10. There overall has been an increase of 185 percent and an annual change of 9 percent. With increases in technology across the board in the movie industry, theaters take full advantage of moviegoers by more the doubling the annual increase of the CPI.
Higher education at a four-year public university: In 1988 the cost of tuition was $4,000. In 2008 the cost is now $12,000. The overall increase has been an increase of 200 percent and an annual increase of 10 percent. Even worse than theaters, which is surprising, and fully unethical. Good for business perhaps, but bad for society.
BOB BEERS AND PHILLIP BRODE
Arbiter Staff
