[I]n the past fifty years, education costs have doubled, college costs have dectupled, health insurance costs have dectupled, subway costs have at least dectupled, and housing costs have increased by about fifty percent. US health care costs about four times as much as equivalent health care in other First World countries; US subways cost about eight times as much as equivalent subways in other First World countries...
[A]ll of the numbers above are inflation-adjusted.
...And this is especially strange because we expect that improving technology and globalization ought to cut costs...
It’s actually even worse than this, because we take so many opportunities to save money that were unavailable in past generations [computers, outsourcing to India]...
And it’s actually even worse than this. A lot of these services have decreased in quality, presumably as an attempt to cut costs even further. Doctors used to make house calls, etc. etc.
Then the author goes on to list every explanation I could think of and more, and show it's not enough to explain the problem. It's not going to salaries. It's not going to investors. It's not going to the tax man.
What is going on here? (Every answer I can come up with, he did at least a partial job of puncturing.)
On the topic of education, particularly post-secondary education, I just want to point out that my wife's law degree probably cost her less than 15,000 CAD in total. (Including her undergrad!) She graduated in more or less 2007 I think. It's not a degree from Harvard or Oxford but it was certainly good enough to land her a job at the biggest law firm in our country, at job at a UN tribunal and two other offers from the UN: one at HQ in NYC, the other at the tribunal for the Khmer Rouge in Cambodia. So the idea of spending 10,000 - 20,000 USD per year for a university education absofuckinglutely blows my mind.
Getting a university education in Canada is far more expensive if you don't happen to live somewhere near a university (which was the case for me; the closest university to my home town is about a 3 hour 45 minute drive away). I spend anywhere from 8000-12000 CAD a year to go to school, mostly on residence fees (which vary year to year). Although I'm sure tuition + residence fees would be even more than 20,000 USD in the States, so it's still probably better here.
Even at a state school, it would likely be more. And god help you if you have to go out of state (or to a private school - which is most of them). Private schools, tution + fees and residence, it's not unusual to break 50K USD per year. But even Indiana University (to pick one example) - in-state tuition is 10K, room and board + fees is 10K (books are an additional 1200) - ~22K in state. Out of state, 34K tuition + the other costs, ~45K out of state.
This is perhaps off topic, but why does anyone have to go out of state for university? Are there not universities in every state?
As Sir said - as a for instance, Indiana University has one of the best music schools in the country, someone in Montana, may well wish to take advantage of that, depending on their desired degree.
The same holds true for many specialities like engineering. It's less of an issue for things like history, literature, etc. And further complicated by the time you are talking about graduate level work.
Even with undergrad, a degree from a school with a good reputation in the field can make a huge difference in the job market. Even just being a recognizable name. Michigan State's reputation is much better than Wyoming's.
Grad school I can definitely understand, but as long as you're taking a common major (and if you're not, I guess you'd have to assess whether or not that is worth the extra expense).
It honestly never occurred to me to think about the reputation of the school I decided to go to. Other than maybe McGill, I'm not even sure Canada's schools have very different reputations (I could be wrong about that). But still, unless maybe I was expecting to win a Nobel Prize at some point I can't imagine a degree from Harvard instead of say, a degree from the University of Wyoming, would generate enough additional income to justify the additional expense. I mean, an engineering degree, for example, has got to be pretty useful even it you get it in Wyoming.
It surprised me that it was such a range: http://www.payscale.com/college-salary-report/bachelors?page=65
College education isn't quite a commodity. I went to my (out-of-state) grad program because it offered a chance to do research in an area I was interested in. Students also pick colleges based on what majors are available, the reputation of the school (or the major), and who offers the best financial aid package. As well as other reasons.
If I could make it in the U Cal system, the UT system, in Ivy League, whatever, you can bet I wouldn't go local if I were in Alaska, Idaho, Kansas, Arkansas...
I know why it's that way with tuition. I'm sure that it's for the same reason in most of, if not all, those other categories you listed.
The government is constantly giving young men and women money to "help" them pay for college. Many kids see this a "free money" and not a loan-- a loan that never goes away until you pay it, even if you declare bankruptcy (cue Michael Scott). So there's this huge demand with a relatively consistent supply. Seeing as how the government will just keep giving the loans, the colleges have incentive to raise their tuition. It's a vicious cycle where the government "helps" while the colleges are motivated to give them more to "help" with.
Add to that the fact that student debt is still there whether you graduate or not, and that a good portion of those in debt don't even graduate.
Add to that, thr fact that many degrees are useless relative to the cost, or plumb useless all together. You have people paying $50k a year for "gender studies" degrees
To quote Mike Rowe,
"We are lending money we don't have to kids who can't pay it back to train them for jobs that no longer exist."
That's why medical costs keep going up. Un/underinsured go to the hospital and never pay their bills. Just google what your county hospital writes off in a year in unpaid hospital bills...So hospitals raise their costs across the board to make up for the bills that go unpaid, and we get to pay those unpaid bills...
It's true that when you throw 3rd-party money at something, there's no incentive to keep costs down. But... lawzy. You have to spend it on something. What?
On indigent care: we've always had that. So it can explain some of the unreasonable expense, but why would it make things keep going up? This can amplify the effect of whatever else is driving costs up, but it can't make them (unless the number of indigents has exploded).
You have to spend what on something?