Austerity Canadian-Style, Now in Britain? Pity

This appeared in the Globe and Mail yesterday. You can add your comments to the discussion here
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/austerity-canadian-style-now-in-britain-pity/article1796379/

Budget plans in the UK drove 50,000 students into the streets this week. They were protesting proposed public spending cuts that could double or triple university tuitions.

We’ve seen this movie, and it does not end well for students.

The British government is happily taking a page from the Canadian playbook of the mid-1990s, when our own Age of Austerity reshaped public policy and the role of the state.

Massive federal budget cuts in 1995 devolved responsibility for a range of social programs to the provinces and territories who, in turn, pushed costs onto municipalities and hospitals, schools and universities, community organizations and households.

One result of this cascade of downloading is that undergraduate university tuitions have more than doubled across Canada and tripled in Ontario since 1995. That’s just tuition. Compulsory administration fees, rents and the cost of books have also shot up.

For generations, parents have chided their children for grousing and told stories of how hard life used to be. But my generation of university students sure had it a whole lot easier than today’s kids.

When I entered university in the fall of 1979, the average full-time undergraduate tuition in Ontario was $740. The minimum wage was $3 an hour. I needed six weeks of full-time work in the summer to pay my tuition. Work all summer, and the costs of my books, rent and even some beer money were covered for the year. I could focus on learning during the school year.

By the fall of 1994, before the big federal spending ax came down, inflation and demand had caused full-time undergraduate tuition rates to more than triple in Ontario ($2,252). The minimum wage had risen too, but not as fast ($6.85 an hour). You would have had to work full-time for eight weeks to pay off tuition, but things were still manageable.

This fall, the average cost of a full-time undergraduate program was $6,307 in Ontario. Minimum wage was $10.25, meaning you’d have to work 15.5 weeks at 40 hours a week to cover off your tuition.
That’s if you could even find the work. One of the biggest casualties of this recession was young people. Between October 2008 and July 2009 – the bottom of the labour market’s slide – there were 213,000 fewer Canadian workers aged 15-24.

Unlike most other age groups, the nation’s youth is still waiting for signs of recovery. Last month there were still 206,000 fewer workers aged 15 to 24 than there were in October 2008.

Many in this age group have turned to post-secondary education. Since the recession hit tuitions have increased at twice the rate of inflation, or more, in most Canadian provinces.

The British are facing the biggest budget cuts in their history. They’re doing what we did in 1995 when we undertook, as Finance Minister Paul Martin noted in his budget speech, “the largest set of actions in any Canadian budget since demobilization after the Second World War….Relative to the size of our economy program spending will be lower in 1996-7 than at any time since 1951.”

This was no temporary change. Whether you see that as a good or bad thing depends on whether you’ve picked up the tab for the ensuing changes. In Canada, government books were balanced in part by shifting the burden of debt to the slender shoulders of the nation’s students.

Now not only in Canada, you say? Pity.