Can Starbucks Save the Middle Class? No. But It Might Ruin Higher Education.

Sep 14, 2019 by

The much-hyped partnerships between companies and universities might make college too expensive for the rest of us.

Image result for StarbucksA number of large employers have garnered praise recently for creating higher-education benefits for their employees in partnership with one or more universities. For example, Starbucks has established a program through Arizona State University; Walmart has partnered with several institutions, including the University of Florida, Brandman University, and Bellevue University; and Peet’s Coffee has an arrangement through Oregon State University. Arizona State is planning to create a for-profit subsidiary to broker employer-university partnerships on an even larger scale.

These programs have generally been seen as both innovative and enlightened; they provide evidence that employers are willing to invest in their workers — many of whom are at entry-level, low-skill jobs — and that universities are developing new ways to expand access and respond to the needs of the work force. At first glance, arrangements such as these appear to deliver benefits to everyone concerned. Employers gain from more stable and better-educated workers; employees gain access to educational programs they might not otherwise have; and universities hungry for revenue gain a new wholesale business model to supplement the traditional retail approach.

While it is easy to appreciate both the good intentions and the opportunities represented by these arrangements, we should be concerned if they become the new standard pathway to college. Doing so could replicate the problems created decades ago when access to health care became linked to employment.

Employer-sponsored health-care plans became prevalent during World War II as a way for companies to skirt federal wage freezes. Employers realized that offering fringe benefits such as health insurance would increase worker compensation without adding to cash income. These programs gained momentum when, in 1943, the IRS ruled that health benefits are exempt from taxation. The practice quickly spread, and as health-care costs rose, employer-sponsored health insurance became the only way most people could afford even basic medical care. The U.S. health “system,” such as it is, arose more by accident than from thoughtful policy making.

Source: Can Starbucks Save the Middle Class? No. But It Might Ruin Higher Education. – The Chronicle of Higher Education

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