Limiting life chances, creating poverty and resentment will inevitably drain the finances of the National Budget as it looks to socially support these individuals later in life.
The year of 2017 will long be remembered for its proposed policies sparking a revolution amongst the youth of today. Most notably, Labour’s plan to immediately scrap Tuition Fee’s caused a considerable amount of debate and apprehension from some who saw it as a financial burden.
Hence, the call for a separation between ideological and evidence based policies put forth by politicians. Aside from the moral stance of whether or not you deem higher education to be a privilege for those that can afford to pay, there is now an unprecedented amount of pressure to justify its value economically.
Traditionally this is done by assessing the initial monetary cost to the National Budget and the British tax payer, which understandably heightens feelings of resentment from those who are making significant contributions to the “system”.
However, the initial cost is just one piece of a much larger puzzle if we are looking to determine Higher Education’s true value to society. Thus, it’s paramount to scrutinize the potential social return via Market and Non-Market benefits that are associated with attaining higher levels of education.
Education has long been recognized as a substantial factor in regards to economic prosperity and social well-being. Equally, inequalities among educational opportunities has been evidenced to contribute to the disparities among wealth in society.
The JRC science and policy report published in 2014 outline education has two forms of social returns; Market benefits such as increased Tax & National Insurance revenue, Non-Market benefits such as a reduction on public spending in particular healthcare, policing and imprisonment. The report attributed these factors to an upturn in social capital coupled with increased individual achievement leading to greater economic value per citizen.
Additionally, a report commissioned in 2016 by the OECD looked to quantify the economic benefits of Higher Education, concluding that those with a bachelor’s or equivalent degree earn 48% more than those who had left their studies at school.
The economic benefits reported are often not fully considered in context, yes there is a 48% increase but this is not a singular occurrence. In fact, it’s the complete opposite. All too often political parties apply the cost and benefit analysis on a short term basis constructed upon the amount time left in parliament. As a result education has come to be a pawn in a political game of chess, were the goal is to manipulate public finances to evidences financial prosperity. Each year the Chancellor of the Exchequer will announce the budget statement to the House of Commons addressing the current state of the economy and any government proposals for changes to taxation.
However, if we are to assess Higher Educations true value to the economy we must evaluate contributions made over the average working life. Meaning, the 48% increase should be multiplied 47 times which is the average working lifespan according to a study by AAT. As a result we see a momentous increase of 2,256% of “taxable” earnings over the life duration of someone holding a bachelor’s or equivalent degree. Damming as that may seem the figures still aren’t really in context, that’s the potential Market returns of ‘one’ citizen. Imagine the economic possibilities if we were to inspire a whole generation that the key to economic prosperity was to attain the highest level of education possible.
If those economic possibilities weren’t enough to convince you then maybe the social repercussions will be. While higher educational attainment can play a significant role in shaping employment opportunities, it can also increase the capacity for better decision making in respects to many lifestyle choices.
The level of attainment is increasingly being recognized as an important social determinant of health. This phenomenon is further exacerbated during prolonged periods of austerity and economic uncertainty which has resulted in record numbers of citizens who fall into the household’s below average income.
The centers for disease control and prevention annual report in 2011 concluded that those with higher levels of education have lower rates of several chronic diseases such as obesity and diabetes. With living costs continuing to rise in the UK it would appear that the basic principles of capitalism and free-market choice are nothing but an illusion to many. In fact, those who fall below the poverty line in the UK often exercise no choice at all, lifestyle choices are determined based upon financial cost and not health implications.
Aristotle once said “poverty is the parent of revolution and crime” this is somewhat symbolic of the current conditions created by the absurd price placed upon the aspirational pursuit in an effort to better one’s life. The relationship between poverty and crime has been documented for centuries and is due to a deterioration in economic conditions increasing the incentive to resort to crime as a source of income.
Hence the chances of not going to jail are heavily stacked in your favor should you have the opportunity to increase your salary by means of academic achievement. Whilst this may all sound logical in thinking and somewhat utopian the statistics speak volumes 83% of prisoners in 2015 were below level 2 education in numeracy alone.
Again, if we are to reflect accurately on the None-market benefits it has to consider the direct and indirect consequences they pose to society. The possibility of a healthier more informed society would directly reduce the amount of public spending on healthcare and prolonged the average working life resulting in greater amounts paid into the system.
The notion that education can serve as a liberating process, lifting those from the most impoverished conditions provides a justification alone if we are to continue to strive for social justice. However, for the economist’s among us, again there is a clear argument for the financial rewards of a highly educated society.
Based upon the notion that poverty breads criminality, there would be significant reductions in the amount spent on policing and imprisoning citizens. The term “career criminals” could become a thing of the past, as the economic need to commit crime would be significantly diminished.
Yet, tuition fees were introduced across the UK in 1998 under the Labour government somewhat debunking the proposition of its ideological rationale. The justification at the time was accredited to the number of young people in full time higher education increasing from 13% to 34% since 1980 resulting in the amount of funding available per student being halved.
Statistics published by the Department for Education in 2012 show that it had significant ramifications for the upturn of people who was obtaining a degree. There was a reduction on increase of UK graduates by 180% between 2000-2010 in comparison to the previous decade. Evidently the introduction of cost had been a contributing factor in discouraging potential students who may have not been best financially positioned to further their education.
The implications demonstrate a reemergence of perceived social classes were inequality is rife as is the disparities in wealth is further intensified through the availability of educational opportunities.
The effect of limiting the availability of attaining higher levels of education is in fact sacrilege to the UK economy over the lifespan of any generation. Limiting life chances, creating poverty and resentment will inevitably drain the finances of the National Budget as it looks to socially support these individuals later in life.
The evidence in damming education has the power to ensure the stability and resilience of a society and its economy notably in times of uncertainty through the access of knowledge leading to better informed decisions and greater social returns.
The Labour Party’s message throughout the general election was that they would be a government which would act solely in the national interest. That message was clearly evident in their approach to scrapping Tuition Fees, putting aside short term political economic gain, for the long term national benefits a higher educated society would reap.
When the snap election was called on the 18th of April few had envisioned Jeremy Corbyn surviving as the leader of the party let alone leading a revolution. His empathetic nature together with his inspiring policies lead to one of the biggest youth turnouts the country has seen in decades. The revolution has prompted many to predict that he has undoubtedly transformed the trajectory of politics within the UK and future political battles will be between the left and center.
Michael Johnson is a Young Fabians member. Follow him on Twitter at @mike_1992