Economic Update with Richard D. Wolff

Episode: Higher Education in Crisis

Date: July 14, 2015

Overview of the Episode

This episode of Economic Update with Richard D. Wolff focuses on the mounting crisis in higher education in the United States. Wolff explores the economic challenges facing young people entering the job market, critiques the "recovery" narrative, and investigates the transformation of higher education from a public good toward a privatized, tuition-driven model. The second half features an in-depth conversation with Professor Sonia Sayers of Cooper Union, highlighting the battle to defend tuition-free higher learning and exposing the growing administrative bloat within universities.

Key Discussion Points and Insights

1. Economic Outlook for Recent Graduates

• Unemployment and Underemployment
  • Wolff presents recent data showing that both unemployment and underemployment for recent high school and college graduates remain worse than in 2007, before the financial crisis.
  • He emphasizes that high joblessness at the start of a career can have lifelong consequences.

“If you're unemployed as a recent graduate of high school or college, it will have ramifications and implications for your entire work life, and that's why we're paying some attention to it.”
(Richard Wolff, 03:01)

• Statistics Shared:
  • Unemployment for college grads: 5.5% (2007) → 7.2% (2015)
  • Unemployment for high school grads: 15.9% (2007) → 19.5% (2015)
  • Underemployment rates for college grads: 9.6% (2007) → 14.9% (2015)
  • Underemployment for high school grads: 27% (2007) → 37% (2015)

“That's not a recovery, ladies and gentlemen. Not even close.”
(Richard Wolff, 11:15)

2. The Myth of Lower Unemployment Rates

• Misleading Statistics
  • Wolff explains how the drop in official unemployment is largely due to people dropping out of the labor force, not new jobs.

“The reason the number went down is not because we've had a surge of jobs for people. Not at all. What we've had is a withdrawal of people from the labor force. ... Not because they got jobs, but because they quit looking. That's the reality of the statistics.”
(Richard Wolff, 14:36 - 15:34)

• Broader Impacts
  • This leads to fewer working Americans supporting programs like Social Security, worsening public finances.

3. Economics of Lotteries

• Lotteries as a “Hidden Tax”
  • Wolff calls state lotteries a regressive tax on middle and lower-income people, disguised as entertainment.
  • Lotteries provide a fantasy of wealth, but siphon money that would otherwise be spent elsewhere in the local economy.

“Lotteries are another way to tax people. They are a tax that is wonderful because it isn't called a tax.”
(Richard Wolff, 19:16)

“We’re actually through our lotteries taking money away from those who spend it, creating wealthy people who will be saving a large portion of it and not spending it. That's economic craziness.”
(Richard Wolff, 22:36)

4. Corporate Share Buybacks

• Incentives for Executives
  • Wolff explains how executives are rewarded based on share prices, encouraging them to use company profits for stock buybacks rather than for productive investment or hiring.

“So it's a way for people at the top of a corporation to boost their own income if they can drive up the shares and by using the company's money to buy the shares, they do that.”
(Richard Wolff, 24:13)

• Lack of Productive Investment
  • Large corporations are sitting on trillions in cash rather than investing, which could otherwise generate jobs and address global inequality.

“We could do something about these problems if that money were put to use solving them, but we can't do that in a private capitalist economy.”
(Richard Wolff, 26:20)

5. Real Estate, Inequality, and the University Crisis

• Skyrocketing Urban Housing Prices
  • Wolff connects the concentration of wealth to speculation on urban real estate, pushing out working- and middle-class residents.

“They all want to live more or less in the same places ... so whenever this happens ... we have what's called a real estate bubble ... driving middle and lower income people out of those areas.”
(Richard Wolff, 27:29 - 28:10)

In-Depth Interview: Professor Sonia Sayers (Cooper Union)

6. The Legacy and Loss of Free Tuition at Cooper Union (25:18–31:00)

• Cooper Union’s Founding as a Free University
  • Modeled on European workers’ colleges, founded in 1859 as tuition-free for all qualified students regardless of income.
• Erosion of Free Public Education
  • The rollback began with a “neoliberal attack” and funding withdrawals, leading to tuition inflation even at public universities.

“...as Cooper Union was free all those many years, so were large systems in this country. CUNY was free. The entire California system was free. Then came the neoliberal attack.”
(Sonia Sayers, 28:10–28:44)

• Cooper Union’s Tuition Crisis
  • Due to endowment mismanagement and funding models, the school began charging tuition in 2014.
  • Students and faculty fiercely resisted, organizing protests and lawsuits to preserve the tuition-free model.

“They began the fight about four years ago ... they were fighting for the future of the school.”
(Sonia Sayers, 30:31)

7. The Educational Cost of Tuition and Debt (34:09–36:48)

• Psychological and Creative Toll
  • Tuition and debt burdens demoralize students, stifling academic curiosity and risk-taking.
• Contrast with Free Model
  • At Cooper Union, debt-free students and lean operations fostered energy, invention, and spirit.

“The penalty now for students attending most colleges is so severe that they bring that depression to the classroom... At Cooper Union, it was never the case.”
(Sonia Sayers, 33:58)

“I can simplify the enemy of education is alienation.”
(Sonia Sayers, 34:36)

• The Role of Private vs. Public Institutions
  • Private universities, Sayers notes, were threatened by public excellence, lobbying to erode support for public higher education.

“You’re making SUNY, Buffalo, Stony Brook, the University of California so good that we can’t really compete. So that was another element ... of withdrawing from ... excellence in higher education at the public level.”
(Sonia Sayers, 36:34–36:58)

8. Administrative Bloat and Faculty Precarity (37:23–40:40)

• Administrative Expansion
  • Growth in high-salaried administrative positions outpaces investment in teaching and facilities.
• Adjunctification
  • About 70% of faculty are now adjuncts, working with low wages and no security.

“They have figured out to turn the faculty into factory workers who come in only for their moment on the stage and leave.”
(Sonia Sayers, 39:05)

• Replicating Corporate Practices
  • Universities mirror corporate trends: rising executive pay, reduced worker stability.

9. Faculty and Student Resistance (42:38–44:21)

• Effective Struggle at Cooper Union
  • Faculty and students occupied administrative offices, cultivated open debate, and launched a lawsuit challenging tuition and management practices.
  • The struggle became a model for potential resistance elsewhere.

“Anyone who comes into American education now is basically contaminated by a set of ideas that have not been examined. So they sat down and examined those ideas. They were brilliant. … They created a lawsuit … forcing Cooper Union to reverse its tuition status question…”
(Sonia Sayers, 43:11–44:03)

• Legal Oversight
  • The New York State Attorney General began examining Cooper Union’s finances.

10. Lessons, Broader Movements, and Hope (45:24–51:33)

• Parallel Movements
  • Sayers references Canadian and European student strikes, the “Ivory Tower” documentary, and other U.S. colleges in crisis.
• Reimagining Governance
  • The lawsuit has revived conversations about faculty and student-led management of universities—cooperative, transparent, and mission-driven.
• Consequences for Nonprofits
  • If Cooper’s lawsuit is successful, it may force other nonprofit boards to greater accountability.

“Even the New York Times said that the lawsuit was so fundamental … that nonprofits even outside of academia have been making that if it goes forward … all boards of trustees sitting on all nonprofits are going to have to think twice.”
(Sonia Sayers, 50:28)

Notable Quotes & Memorable Moments

• On Employment Statistics:

  “That's not a recovery, folks. That's a condition that is way worse than what it was before this crisis hit.”
  (Richard Wolff, 06:41)

• On Lotteries:

  “A lottery is a fantasy. The vast majority of people who buy any kind of lottery will win exactly nothing. Only a tiny percentage of the people win.”
  (Richard Wolff, 20:24)

• On Privatization and Market Values:

  “The real estate bubble and boom is itself a kind of sideshow to the extraordinary profits that are earned and held in the hands of very few people.”
  (Richard Wolff, 28:10)

• On Cooper Union’s Origins:

  “A worker discovered that workers in another country had free college education ... And these rich businessmen thought that one of the best things they could do with their money was to establish a university for everybody that would cost nothing. Exactly how interesting and different from the mentality of big businesses today, isn't it?”
  (Richard Wolff, 27:29)

• On Faculty Precarity:

  “We've taken our most educated component of our workforce and simply brought them down to the lowest level of any worker in the United States.”
  (Sonia Sayers, 40:08)

Important Timestamps for Key Segments

• Unemployment & Underemployment Data: 03:00–11:15
• Labor Force Exit and Unemployment Rate Myth: 12:00–15:45
• Lotteries as Hidden Tax: 17:00–23:30
• Corporate Share Buybacks & Inequality: 24:00–27:00
• Urban Real Estate Bubble: 27:00–28:20
• Introduction to Professor Sonia Sayers & Cooper Union: 25:18–29:02
• Loss of Free Tuition at Cooper Union: 29:02–31:38
• Demoralizing Effects of Tuition and Debt: 33:58–36:48
• Administrative Bloat and Faculty Precarity: 37:53–40:40
• Student and Faculty Resistance at Cooper: 42:57–44:21
• Reviving Democratic Governance of Universities: 47:30–48:18
• Lessons and Broader Context: 50:28–51:33

Final Takeaways

• The economic crisis is ongoing for young Americans, especially recent graduates facing bleak employment prospects and devastating student debt.
• The dismantling of public, tuition-free higher education has been deliberate and is deeply tied to neoliberal economic policy and privatization.
• University governance increasingly mirrors corporate models: ballooning administration, underpaid faculty, and systemic inequality.
• Despite grim trends, there are inspiring chapters of resistance—exemplified by Cooper Union faculty and students—offering hope for reclaiming education as a public good, and perhaps shifting the wider national conversation.
• The episode calls for vigilance, activism, and new models for organizing and funding higher education.

For further engagement and resources, listeners are urged to visit:

• rdwolff.com
• democracyatwork.info
• Watch the documentary Ivory Tower (Andrew Ross, CNN) for more on higher education's crisis.