The cost of an education in America

Consumer Price Index, CPIAUCSL, Consumer Price Index for Education, CUUR0000SAE1, monthly,1993 to 2013

The incessant stream of happy news most people pay attention to (instead of looking at data and crunching the numbers themselves) continues to reassure that the Consumer Price Index, or CPI is only running at about 2.0% pa so there is nothing to worry about. This is the first in a series of posts that will examine the official CPI numbers in detail, breaking apart this aggregate metric and looking at sub series. The overall goal of this series will be to prove that CPI as officially presented is deceptive, and that since the greater majority of Americans don’t question “official” communiques they are willingly misled.

The chart above presents two series: first, Consumer Price Index (CPIAUCSL, blue line) reflecting the overall price changes, and second, Consumer Price Index for Education (CUUR0000SAE1, black line) for the period 1993 to 2013. Each series is measured monthly and for to make comparisons easier I’ve baselined the pair at 100 in January 1993.

Its easy to see there are clear differences between the overall level of prices (series CPIAUCSL) and the cost of an education (series CUUR0000SAE1), specifically even as the official consumer price data show a relatively benign increase in the cost of living the cost of obtaining an education in The United States has SOARED. More specifically, the cost of an education has increased some 77% more than the overall cost of living across the period analysed. In terms of increases on average across the period studied the overall cost of living rose some 0.20% per month while education increased over twice that amount, 0.44% per month.

Bottom line: the cost of getting an education in America has sharply increased and far outstripped gains in the cost of living. I’ve previously written about declining wages in The United States, a phenomenon that we see accelerating so even as the price of an education increases there are automatic disincentives to learning, specifically the cost as a function of wages.

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