Critique of Growing Wage Inequality: Educational Training Income Beyond Zero Tuitions
"Free education for all children in public schools. Abolition of children's factory labour in its present form. Combination of education with industrial production, &c, &c." (Karl Marx and Frederick Engels)
In June 2009, the National Union of Students in the UK called for the government to replace tuition fees with a graduate tax spread out over a number of years after graduates receive their degrees, based on progressive taxation. The Guardian called this move "a radical departure from decades of opposition to any form of payment for tuition." A little over a year later, members of the new coalition government of Conservatives and Liberal Democrats, most notably the Business Secretary John Cable expressed support for this. Traditionally, student politics has been bankrupt, ranging from post-modernist activism to mere identity politics to zero-tuition agitation (calling upon individual universities or colleges to scrap tuitions, not society at large), and it is this demographic that has the lowest voter turnout.
What follows is an alternative analysis and brief policy that dispels illusions in graduate taxes being "a radical departure from decades of opposition to any form of payment for tuition" - courtesy of Paul Cockshott:
Now the question is whether people who have had more education should be paid more. Now, in a capitalist economy, they get paid more if there is a shortage of that particular skill, particularly, for example, if you look at doctors in the United States. They're paid extremely highly because the American Medical Association acts to restrict the supply of doctors. If, on the other hand, you have in a capitalist economy a profession which requires education, but there's a lot of people being educated for it like Media Studies, for example. A lot of people are being educated to do Media Studies at the moment, and the salaries that they get from that are not above what you'd get as an average manual worker. The reason is supply and demand, in that case, but more generally if you take professions which are paid highly in the capitalist world, it tends to be the case that the education is expensive and only rich families can afford to send their children to get that education, and therefore the supply is restricted. If the education is paid for by the state, and people are paid a salary whilst they're students, then there is no particular reason why the individual should benefit from that. The costs of education haven't been met by the individual. They've been met by the taxpayer, and if the restriction and entry due to lack of wealth is removed, one would expect to see that the shortage of supply is removed, as well. If one compares the situation of doctors in the United States with the doctors in the Soviet Union, doctors in the United States are relative scarce and highly paid, [while] doctors in the Soviet Union or Cuba are plentiful and not particularly highly paid, but it doesn't stop people wanting to become doctors because many people want to become doctors for humanitarian reasons.
It should be noted that, with the expansion of consumer credit, more than just rich students can afford education in highly paid professions. Nevertheless, there are immediate and future costs associated with student debts and similar "efforts" that are "given up" for higher income later on. Also, the analysis above - as opposed to any of the analyses leading to the graduate tax scheme - actually addresses both supply and demand and the structural role played by privately controlled, mostly private-sector, and monopolistic or oligopolistic guilds-in-all-but-name (legally controlling the "professional labour" supply at the national and regional levels with their pre-entry closed shop modus operandi and petit-bourgeois apprenticeship requirements) - be they in medicine, securities trading, real estate brokerage, public accounting, law, engineering, or elsewhere.
To be sure, a few demands were raised earlier to address the problem of growing wage inequality itself:
1) The March 2010 draft party program of Die Linke (The Left party in Germany) called for limiting manager salaries to "20 times the earnings of the lowest wage group in an enterprise" (again, an economistic measure by virtue of indicating a single relative limit legislated into law);
2) An intermediate or threshold demand was raised for fuller socio-income democracy through direct proposals and rejections - at the national level and above - regarding the creation and adjustment of income multiples limits in all industries, for all major working-class and other professions, and across all types of income; and
3) A new meaning was given to "sliding scale of wages" whereby wages under the suggested, multi-factor "sliding scale" would fluctuate in accordance with rising real costs of living, with limits on high-wage incomes based on productivity growth in effect due to priority given to zero non-frictional unemployment (and the related public employment program of last resort for consumer services), and with income multiples limits in all industries, for all major working-class and other professions, and across all types of income.
However, in the here and now, there needs to be a policy that goes beyond the scope of the first demand above but can be implemented before the latter two demands. For the purposes of this discussion and elsewhere, this policy, as outlined by Cockshott above, will be called Educational Training Income.
The first concern is how Educational Training Income - most likely at living-wage levels - should be funded from society at large. The primary funding can operate just like employers' portions of unemployment insurance and national pension plan contributions. In this case, employers would have to pay a special tax, the proceeds of which would then be allocated towards post-secondary students as Educational Training Income. It would then be easier for employers to limit high-wage incomes based on the special taxation costs.
[Note: Some will undoubtedly rush to say that this proposal is a limited implementation of the post-modernist call for unconditional basic income as discussed in Chapter 2. Unlike the implementation of that scheme under bourgeois society, there is no monetization of social benefits through their privatization, and as mentioned above, the downward shift in wages is limited to high-wage incomes.]
Meanwhile, the secondary funding should have an underlying aim that is more difficult but nonetheless possible to attain: lowering the incomes of the ever-unproductive and self-employed service providers with mainly middle incomes at the present time due to guild organization. Consider once more their pre-entry closed shop modus operandi and petit-bourgeois apprenticeship requirements. One of the forms this funding could manifest itself is the elimination of tax deductions for membership dues paid to these guilds and perhaps even a progressive income surtax (not mere "tax") levied on the guilds collectively but based on individual members' incomes.
The second concern is one of abuse. Without proper measures, there will undoubtedly be students taking degree programs their entire lives just for the sake of receiving Educational Training Income. Naturally, there should be a limit on the number of degrees one can pursue while receiving Educational Training Income.
The third concern is one of career availability: degree programs with career paths vs. those without. For example, career paths in philosophy only present themselves at the PhD level. Therefore, students in degree programs with career paths should be eligible to receive Educational Training Income, while students elsewhere, even in a zero-tuition education regime, wouldn't. Since in between are individual mixes of career-related courses and otherwise, a minimum level of credit hours taken in career-related courses is necessary to get the full income, below which income would be received on a pro-rated basis.
There are two more concerns: full-time vs. part-time study, and pure supply and demand. For the former, part-time students with jobs should not be eligible to receive the full amount of Educational Training Income (or should at least reimburse the public for income received) that they would otherwise be eligible to receive as full-time students. For the latter, there are degree programs whose career choices are in demand, and there are those whose career choices are not, and therefore funding might have to be granted only to the former in order to prevent over-saturation in degree programs whose career choices are not in demand.
Now, does this reform facilitate the issuance of either intermediate or threshold demands? Like with mandatory private- and public-sector recognition in full of professional education, other higher education, and related work experience "from abroad," Educational Training Income is meant to pose at least intermediate questions about the continued existence of the "professional" guilds.
Does this reform enable the basic principles to be "kept consciously in view"? The most obvious principle addressed here is class strugglism, since historically the guild is a petit-bourgeois and not working-class form of economic organization. Why give free passes especially to anti-union politics encouraged by guild membership? On the question of social labour, the divide between productive and unproductive labour will have to be addressed explicitly later on, since career paths in areas like law and luxury fashion design, while covered initially under the Educational Training Income policy, are ultimately unproductive.
The most difficult principle is that of transnational politics. As noted by Martin Wolf of the Financial Times on the graduate tax scheme mentioned earlier:
As a tax, it would not cover non-residents and so would shift the burden from emigrants and students who come from the European Union (more than 100,000) on to those who remained in the UK. It would, presumably, not apply to those who obtained degrees abroad.
Like with parochial "stolen jobs" sentiments, there can be increased sentiments against international students. Already, they pay higher tuitions than immigrant or citizen students, since the parents of international students do not remit taxes to the country of study. To what extent, if at all, should international students be eligible for Educational Training Income?
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