April 23, 2024
Economy

Harvard’s Bubble Economy Is Not the American Economy | Opinion


Harvard might be the best package deal you’ll ever get. Win the golden admission ticket and your tuition buys you 13 undergraduate dining halls, the world’s largest academic library system, an Olympic-sized pool, and a multi-speciality healthcare practice. You are also granted exit from the realities of the American economy that the rest of the country must deal with.

Take housing, for instance. Today, half of American renters pay more than 30 percent of their income on housing, a huge jump from 2019. This is not the case for the 98 percent of Harvard undergraduates living on campus – a vast majority of students that sets the College apart from most schools in the country. At Boston University, for instance, the portion of students living in college housing is only 65 percent. At big state schools like the University of Cincinnati or UT Austin, that figure falls to 25 and 18 percent, respectively.

Because Harvard bundles housing with a mandatory meal plan, only roughly two percent of students don’t subscribe to the unlimited HUDS meal plan, entitling you to food most hours of the day once the sunk cost is paid. Out there in the real world, a pack of smoked salmon costs $15; here in the Harvard bubble, an endless stream of salmon is just a student ID swipe away (at least on Sundays).

We do not mean to suggest that no Harvard student has ever felt the pressure of rising living costs. Many continue to shoulder financial burdens during their time at college, concerned, for instance, by the economic security of their parents. These students always have one foot planted in the real world. Of course there are also plenty who leave the bubble by choice, venturing off to buy Blank Street coffee and Sweetgreen harvest bowls.

Yet, the point remains that very few Harvard undergrads engage in the real economy on a daily basis out of financial necessity, especially given that 55 percent of us receive need-based scholarships. The University has curated a college experience reminiscent of an all-inclusive resort.

We applaud Harvard’s attempt to free its students from the anxieties of navigating rent, groceries, and utilities. But it is important to recognize that this approach produces a cohort of young people insulated from the economy everyone else is waking up to.

Right now, that also means insulating us from the cost-of-living crisis going on at our doorstep. In the fall, the number of consumers saying it was “very difficult” for them to pay household bills in the last week rose from 26.9 million in Oct. 2021 to 43.2 million last Oct.

The solution to this problem is not to kick students out of their dorms and watch them fend for themselves on the Cambridge housing market. Or to deprive them of salmon at Sunday brunch. Instead we must ensure that as students progress through their formative intellectual years, deciding what kind of world they want to live in and how they want to shape it, they aren’t fooled by the Harvard bubble’s abundance.

Seventy-two percent of Americans report being very concerned about prices for food and consumer goods. The 2024 election will largely be determined by how people feel about the economy.

It will also be influenced by the growing divisions in our society and increasingly negative sentiments towards institutions like Harvard and the people who attend them. Confidence in higher education has plummeted to 36 percent. To the Ivy League educators scratching their heads at this number, we say: Make sure your students are reckoning with the realities of normal people.

Teach your economics students that while prices can be socially optimal on lecture slides, they don’t always feel optimal on the ground. Go beyond the textbook models implying that markets are efficient if left unregulated and incorporate instead the data, the facts, and the anecdotes that complicate this view — not just as an afterthought. Invite students to think critically about whether market failures are the norm rather than the exception. Burst their Harvard bubble.

Maibritt Henkel ’25 is a double concentrator in Social Studies and Economics in Pforzheimer House. Mie L. Holm ’25 is a double concentrator in Social Studies and Economics in Pforzheimer House. Their column, “Rethinking Economics,” runs bi-weekly on Fridays.



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