Pete said:
In principal this is correct but when GM has to pay some goober $39 per hour to drive a fork lift because of union brokered wages, and the company that supplies starters has to pay $32 an hour to screw on the nuts over the solenoid studs it makes the cost of an automobile significantly over 50% the MSRP.
Same with colleges. Buildings cost money. Heating and cooling buildings cost money. Professors cost money. The guy weed wacking the hacky sack park costs money. The campus police cost money. The cars the campus police drive cost money. If anyone who is employed or contracted to the University gets a raise it is passed on to you.
This is right on, but of course, there's more to it, and it's capitalism - the way it's SUPPOSED to be.
I could sell tomatoes from my garden for a penny apiece - because for one thing, they're fertilizer if I don't, and not counting the labor and the small investment - they didn't 'cost' me anything.
But the guy up the street is selling his for a dime apiece. I can still undersell him if I go three for a quarter. If I went to a quarter apiece, I've got no chance, unless I can convince buyers that my Lemon Boys and Beefsteaks are *better* than his Romas.
And this is also simple economics - the best way to run the business is to find the optimal cost - the cost that will bring the most revenue according to the demand. You might be able to sell a few tomatoes for a quarter apiece, but if you still have tomato inventory a week later, you're out of luck, unless you're also selling tomato JUICE. There's an optimal point.
Schools are finding this too. Yeah, you do pay everyone an impressive salary - but get real. Professors aren't known for being the richest guys on the planet, although if they primarily teach, they also aren't known for long hours of teaching, either. When I assisted research in college, the post-docs got paid pennies to further their research, and the school made the profits. So there's money to be made.
Everyone's touched on this - demand drives the optimal price. If demand dries up, there'll be a new optimal price. There's no intelligent reason for a college to charge chump change for a degree when the demand remains the same for a higher price. The reason a degree costs $$$$$ is because other degrees cost $$$$$. If they suddenly lose demand, and start costing $$ then others will follow. It's basic capitalism to maximize profit, and there ain't nothing wrong with that.
I do think however, that a smart entrepreneur should be able to market something in between for less cost. For example, when I took classes to learn about Microsoft Networks, there were guys trying to get certified without a degree. For a fraction of the cost of a degree and a LOT less time - they were securing a good paying job. Why can't someone start out somewhere in high school and get certified in a career of their choice without having to undergo some school's idea of a "rounded" education? Seriously. If you've been an engineer or computer scientist for 10-20 years, does anybody seriously think the art appreciation class or the medieval history class you took in college is of ANY value now? You got the degree to get the job. Wouldn't it have been better to just learn the crap you needed, and stop wasting four years in school?
(Damn. I'm beginning to sound like an advocate for Father Guido Sarducci's Five Minute College).
And they are correct about tuition costs. I'm paying out my azz for the daughters college costs.
