{"id":4354,"date":"2009-12-21T09:42:11","date_gmt":"2009-12-21T09:42:11","guid":{"rendered":"http:\/\/scienceblogs.com\/principles\/2009\/12\/21\/think-of-it-as-kid-insurance\/"},"modified":"2009-12-21T09:42:11","modified_gmt":"2009-12-21T09:42:11","slug":"think-of-it-as-kid-insurance","status":"publish","type":"post","link":"http:\/\/chadorzel.com\/principles\/2009\/12\/21\/think-of-it-as-kid-insurance\/","title":{"rendered":"Think of It as Kid Insurance"},"content":{"rendered":"

Janet has a typically thoughtful post about tuition benefits<\/a>, following on a proposal to eliminate tuition benefits<\/a> for employees of the University of Illinois. Janet does a great job of rounding up the various pros and cons of the benefit and its possible elimination.<\/p>\n

It takes no time at all for the “Tuition benefits are unfair to people without kids” argument to pop up in comments. This is, as always, pretty stupid, because the same logic leads to thinking that health insurance benefits are unfair to people who don’t become catastrophically ill. Tuition benefits are basically kid insurance– it’s a commitment to employees of an educational institution to compensate for lower salary, guaranteeing that even though they are not being paid as much as they might earn elsewhere, should they have children, they will be able to provide those children with a good education.<\/p>\n

And that’s the real problem, here. In a sense, the current employees of the University of Illinois have already “paid into” the system– they have worked for less for the last several years, and planned their investments, with the understanding that their children would be provided for. In the absence of the benefit, they might have chosen to work elsewhere, and they certainly would have handled their finances differently.<\/p>\n

For the current employees, eliminating the benefit is, in the insurance analogy, roughly equivalent to your health insurance canceling your coverage right before you get sick. Or, to change analogies a bit, it’s like the university not only stopping new contributions to an employee’s retirement fund, but retroactively taking back all of the employer’s contributions, going back to their first day on the job. It’s the breaking of a contract between the employer and employee, in every sense but the narrowest legal one.<\/p>\n

<\/p>\n

This general class of problem is not unique to academia, of course. You see the same thing in the business world– businesses who have traded generous benefits for lower salaries, who find themselves strapped for cash, and start attacking the benefits of their employees (or, worse yet, their retirees). This was a big part of GM’s problems, for example. Sadly, the solution always seems to end up screwing the employees, who have less money and power.<\/p>\n

“Yeah, but what are they supposed to do to make the budget work?” you ask. In the specific case of the University of Illinois, Janet has a good suggestion: eliminate the much larger expense of the free tuition waivers provided to members of the Illinois legislature (or, hell, just cut it in half, which would provide the same budget relief as eliminating the tuition benefit for staff). I wouldn’t recommend holding your breath while waiting for that, though– see earlier comment about money and power.<\/p>\n

In the general case, I have essentially zero sympathy for managers and administrators who paint their institutions into this kind of corner. They made the choice to buy employees off with generous benefits that they didn’t think would end up costing them anything, and while it looked great on the balance sheet in the short term, it’s blown up in their faces long-term. They deserve to sweat and squirm for a bit, but they should not be able to renege on their commitment to their employees.<\/p>\n

If it turns out that these sorts of benefits are not sustainable in the long term, then they might need to phase it out for new hires, but people who are already in the system have paid for their benefits, and should receive the tuition waivers they were promised. They should also investigate the possibility of means-testing the program (there may be tax law problems with this, though)– while these things are usually discussed on-line in terms of their effect on faculty, the effect of the benefit is much larger for the staff, who make considerably less than the faculty do. (Again, money and power.) I would be less offended by the proposals discussed in that article if they affected only faculty, and left the benefit intact for staff. But then, I’m the son of a teacher’s union official, so I’m crazy that way.<\/p>\n

Full disclosure: Union offers a tuition benefit that is many times more generous than that discussed in the article, and there have been recent discussions along these lines on campus. What I saw above is my own opinion, and nothing more, and should not be taken as anything official. I’m not in any position to make those sorts of policy decisions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Janet has a typically thoughtful post about tuition benefits, following on a proposal to eliminate tuition benefits for employees of the University of Illinois. Janet does a great job of rounding up the various pros and cons of the benefit and its possible elimination. It takes no time at all for the “Tuition benefits are… Continue reading Think of It as Kid Insurance<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"1","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49,47,40,28,81],"tags":[],"class_list":["post-4354","post","type-post","status-publish","format-standard","hentry","category-academia","category-class_issues","category-economics","category-health_care","category-politics","category-economics_1","entry"],"_links":{"self":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts\/4354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/comments?post=4354"}],"version-history":[{"count":0,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts\/4354\/revisions"}],"wp:attachment":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/media?parent=4354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/categories?post=4354"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/tags?post=4354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}