Up & Coming Weekly

November 07, 2017

Up and Coming Weekly is a weekly publication in Fayetteville, NC and Fort Bragg, NC area offering local news, views, arts, entertainment and community event and business information.

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Page 21 of 36

NOVEMBER 8 - 14, 2017 UCW 21 WWW.UPANDCOMINGWEEKLY.COM Community college delivers real value by JOHN HOOD With the national debate about tax reform heating up, you'll be hearing a lot about the difference between marginal and average tax rates. It's an important distinc- tion – and the concept doesn't just apply to taxes. Post- secondary education is another area where the "fallacy of the average" often rears its problematic head. To put it simply, what is true "on average" does not necessarily provide useful guidance about what will happen, or what one ought to do, in a particular case. You experience this difference all the time, even if you don't realize it. In sports, for example, Jones may be a better player than Smith in general. But if the other team plays Brown, Smith matches up better than Jones, so the coach makes a substitution. In business, the distinction is critical. e average cost of producing a product is usually different than the marginal cost of producing the next unit of that product because of up-front costs, limited capacity or efficiency gains that come from experience. To apply the concept to tax policy, it's important to understand that if income taxes, for example, have a sig- nificant effect on the individual decisions of employers, employees, investors and consumers, the effect typically occurs on the margin, not on average. If I work harder, add a second job, add a new product line or make a new investment, how much of the new income can I expect to lose to taxes? is future tax loss may be much higher than the tax burden I already shoulder. I mentioned that a less-familiar application of the principle can be found in post-secondary education and training. Fortunately, two American Enterprise Institute scholars, Mark Schneider and Rooney Columbus, have just produced a fascinating study that illustrates the effect in the education markets of three states: Florida, Texas and Tennessee. On average, students who pur- sue and earn bachelor's degrees certainly do have higher lifetime incomes than those who earn associate degrees, who in turn make more money than those who get post-high school certificates, who in turn make more money than those whose formal education ends with high school. But these relationships between averages don't necessarily mean that any specific person would be better off economically by foregoing community col- lege or the working world and enrolling in a university. Circumstances matter. Some young people who don't go on to universities have concluded quite properly that they aren't likely to succeed there – either because of academic preparation, distance from home or preexist- ing responsibilities. You can't assume that the popula- tion of those already university-bound is equivalent in every relevant respect from the population of those who aren't – or that any differences are purely matters of finances that can be eliminated by larger subsidies. More importantly, students don't get an "average" bachelor's degree. ey get degrees in particular sub- jects from particular schools. It turns out that there is a very wide variation in post-graduation earnings, a varia- tion that is masked by "average" lifetime incomes. For some careers and individuals, it makes more sense to pursue less-expensive education or train- ing at community colleges. One report estimated that 28 percent of holders of associate degrees have higher incomes than the median income of those with bachelor's degrees. In their own study, Schneider and Co- lumbus looked at careers with the high- est rates of return on investment. Many of them required community college, not university training, such as allied health and electronics techni- cians in Florida, fire protection and quality-control experts in Texas and automotive technicians and computer-assisted designers in Tennessee. Boosting personal incomes and the overall econ- omy aren't the sole purposes of higher education or even the most important ones. I think the study of arts and sciences has great intrinsic value (although it need not occur in expensive campus settings). For many young people deciding what to do after high school, however, career preparation is a high priority. ey shouldn't let the fallacy of the average obscure what North Carolina's ubiquitous and impressive community colleges have to offer. JOHN HOOD, Chairman of the John Locke Foundation. COMMENTS? Editor@ upandcomingweekly.com. (910) 484-6200. POLITICS There is a very wide variation in post- graduation earnings, a variation that is masked by "average" lifetime incomes. Any home for the political middle? by D.G. MARTIN "e bottom has fallen out of the Republican Party." So wrote Fort Worth's Star-Telegram columnist Cynthia Allen last week. "Well," she continued, "not the bot- tom exactly. More like the middle." She was writing about Texas, where the far-right-wingers are driving moderates out of the party. "So-called Republican 'moderates' have been living on borrowed time. ey are vestiges of an era when compromise was a hallmark of good policymaking." She had harsher words for Texas Democrats, who, she said, "drove out every member of their party who didn't adopt the agenda of the far left." If Allen lived in North Carolina, she might say the same things about both of our major parties. ey are forcing out the moderates who are uncomfort- able with their parties' unwillingness to accommo- date compromise and less strident approaches. "It's a sad state of affairs," Allen wrote. "We need the middle." About divisiveness within two parties nationwide, the Pew Research Center last week issued a report that confirmed major challenges for the political middle. "Nearly a year after Donald Trump was elected president," the report begins, "the Republi- can coalition is deeply divided on such major issues as immigration, America's role in the world and the fundamental fairness of the U.S. economic system." Democrats have a shade different stage of divi- siveness. "e Democratic coalition is largely united in staunch opposi- tion to President Trump. Yet, while Trump's election has triggered a wave of political activism within the party's sizable liberal bloc, the liberals' sky- high political energy is not nearly as evident among other segments in the Democratic base. And Democrats also are internally divided over U.S. global involvement, as well as some religious and social issues." e Pew report helps explain the power of the extremes in each party. Core Conservative Republicans on the right and Solid Liberal Democrats on the left "make up an even larger share of their partisan co- alitions when political engagement is factored in. "While Core Conservatives make up about a third of Republicans and Republican-leaning independents overall (31 percent), they constitute a larger propor- tion of politically engaged Republicans (43 percent)." Similarly, the Pew report says, "Solid Liberals consti- tute by far the largest proportion of politically engaged Democrats and Democratic-leaning independents. Solid Liberals make up a third of all Democrats and Democratic leaners – but close to half (48 percent) of politically engaged Democrats." anks to their more-active participation, far-right Republicans and far-left Democrats have moved their parties away from the middle and toward the fringes. Officeholders in the middle of the Republican Party face competition from Steve Bannon's support net- work and others on the fringe. One of them, moder- ate Texas House Speaker Joe Straus, announced his retirement earlier this month, as did U.S. Sens. Bob Corker of Tennessee and Jeff Flake of Arizona. Republicans on the fringe may be celebrating, but Cynthia Allen mourns, "While the fight may be futile for politicians like Straus, Flake and Corker, the only way they have a chance of improving the odds for their team is by staying in the game. Instead, they are abandoning the field, and everyone loses." Democrats have similar challenges. e middle may be bottoming out of their party, too. Long-time moder- ate Democrats with pro-business, free trade and socially conservative views wonder if they are still welcome. What are the pathways for those in the unwelcome middle of both major parties, other than following the route out of politics shown by Straus, Flake and Corker? Allen, who recognizes the need for a strong middle in both parties, wants the disaffected to stick with their parties and fight it out against their parties' controlling fringes. Although it has been more than 150 years since Americans organized a major new political party that competed for control of the national govern- ment, today's disappointed middle in both parties may see this possibility as their only alternative to dropping out. D.G. MARTIN, Host of UNC's Book Watch. COMMENTS? Editor@upand- comingweekly.com. (910) 484-6200. What are the pathways for those in the unwelcome middle of both major parties?

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