The Decline of the Midwest's Public Universities Threatens to Wreck Its Most Vibrant Economies
And there could be far-reaching consequences for the national economy too.
Four floors above a dull cinder-block lobby in a nondescript building at the Ohio State University, the doors of a slow-moving elevator open on an unexpectedly futuristic 10,000-square-foot laboratory bristling with technology. It’s a reveal reminiscent of a James Bond movie. In fact, the researchers who run this year-old, $750,000 lab at OSU’s Spine Research Institute resort often to Hollywood comparisons.
Thin beams of blue light shoot from 36 of the same kind of infrared motion cameras used to create lifelike characters for films like Avatar. In this case, the researchers are studying the movements of a volunteer fitted with sensors that track his skeleton and muscles as he bends and lifts. Among other things, they say, their work could lead to the kind of robotic exoskeletons imagined in the movie Aliens.
The cutting-edge research here combines the expertise of the university’s medical and engineering faculties to study something decidedly commonplace: back pain, which affects as many as eight out of every 10 Americans, accounts for more than 100 million annual lost workdays in the United States alone, and has accelerated the opioid addiction crisis.
“The growth of the technology around us has become so familiar that we don’t question where it comes from,” says Bruce McPheron, an entomologist and the university’s executive vice president and provost, looking on. “And where it happens consistently is at a university.”
But university research is in trouble, and so is an economy more dependent on it than many people understand. Federal funding for basic research—more than half of it conducted on university campuses like this one—has effectively declined since 2008, failing to keep pace with inflation. This is before taking into account Trump administration proposals to slash the National Science Foundation (NSF) and National Institutes of Health (NIH) budgets by billions of dollars more.
Trump’s cuts would affect all research universities, but not equally. The problem is more pronounced at public universities than private ones, and especially at public institutions in the Midwest, which have historically conducted some of the nation’s most important research. These schools are desperately needed to diversify economies that rely disproportionately on manufacturing and agriculture and lack the wealthy private institutions that fuel the knowledge industries found in Silicon Valley or along Boston’s 128/I-95 corridor. Yet many flagship Midwestern research universities are being weakened by deep state budget cuts. Threats to pensions (in Illinois) and tenure (in Wisconsin) portend an exodus of faculty and their all-important research funding, and have already resulted in a frenzy of poaching by better-funded and higher-paying private institutions, industry, and international competitors.
While private institutions are better shielded from funding cuts by huge endowments, Midwestern public universities have much thinner buffers. The endowments of the universities of Iowa, Wisconsin, and Illinois and Ohio State, which together enroll nearly 190,000 students, add up to about $11 billion—less than a third of Harvard’s $37.6 billion. Together, Harvard, MIT, and Stanford, which enroll about 50,000 students combined, have more than $73 billion in the bank to help during lean times. They also have robust revenues from high tuitions, wealthy alumni donors, strong credit, and other support to fall back on. Compare that to the public university system in Illinois, which has cut its higher-education budget so deeply that Moody’s downgraded seven universities, including five to junk-bond status.
This ominous reality could widen regional inequality, as brainpower, talent, and jobs leave the Midwest and the Rust Belt—where existing economic decline may have contributed to the decisive shift of voters toward Donald Trump—for places with well-endowed private and better-funded public universities. Already, some Midwestern universities have had to spend millions from their battered budgets to hang on to research faculty being lured away by wealthier schools. A handful of faculty have already left, taking with them most if not all of their outside funding.
“We’re in the early stages of the stratification of public research universities,” said Dan Reed, the vice president for research and economic development at the University of Iowa. “The good ones will remain competitive. The rest may decline.” Those include the major public universities established since the 1860s, when a federal grant set aside land for them in every state. “We spent 150-plus years building a public higher-education system that was the envy of the world,” said Reed, who got his graduate degrees at Purdue, in Indiana. “And we could in a decade do so much damage that it could take us 30 years to recover.”
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That land grant was called the Morrill Act. Abraham Lincoln signed it into law during the depths of the Civil War, in 1862, resulting in the establishment or major expansion of, among others, Purdue, the University of Illinois at Urbana-Champaign, the University of Minnesota, the University of Missouri, and Ohio State. Along with many other major public universities in the Midwest, each would go on to have an outsized impact.
It was at Illinois that the first modern internet browser was developed, along with other advances in computer science and technology including early versions of instant messaging, multiplayer games, and touch screens. Today, researchers there are working on a new treatment for brain cancer, a way to boost photosynthesis to increase crop yields, and a solution to the growing problem of antibiotic resistance.
Scientists at the University of Minnesota created the precursor to the World Wide Web, performed the first open-heart surgery, and developed Gore-Tex waterproof fabric. The University of Wisconsin is where human embryonic stem cells first were isolated, and it has since become a center of stem-cell research. Researchers there are trying to develop new drugs to fight the Ebola and West Nile viruses. The University of Iowa’s Virtual Soldier Research Program uses human modeling and simulation to design new military equipment, and its National Advanced Driving Simulator is heavily involved in driverless-vehicle research.
Universities perform more than half of all basic research in America, and public research universities in particular account for two-thirds of the $63.7 billion allocated annually by the federal government for research. That spending, in turn, produces more than 2,600 patents and 400 companies a year, according to the Association of University Technology Managers.
The impact on local economies is hard to miss. In places like Columbus, Ohio, and Columbia, Missouri, the big research universities are among the most important institutions in town. The checkerboard patchwork of farms on the approach to Port Columbus International Airport gives way to office buildings housing high-tech companies spun off by Ohio State and the affluent suburbs where their employees live. The real-estate company CBRE ranks the city as the country’s top small market for attracting tech talent.
More than one in five graduate students who worked on sponsored research at eight Big Ten universities studied by Ohio State economist Bruce Weinberg, including Indiana, Michigan, Minnesota, Purdue, and Ohio State, stayed in the state where they attended school—13 percent of them within 50 miles of the campus. That may not sound like a lot—and, indeed, the exodus of highly educated people is a serious problem—but it’s significant when considering that the jobs for these students exist in a national labor market. People with engineering Ph.D.s from Minnesota could take their talents anywhere. If even 20 percent stick around, that’s a big win for states that can’t expect an influx of educated elites from other parts of the country. These graduates provide an educated workforce that employers need, create jobs themselves by starting their own businesses, and pay taxes.
These universities have served as bulwarks against a decades-long trend of economic activity fleeing smaller cities and the center of the country for the coasts. Since the 1980s, deregulation and corporate consolidation have led to a drastic hollowing out of the local industries that once sustained heartland cities. But a university can’t just be picked up and moved from Madison to New York in the way a bank, an insurance company, or even a factory can be.
“What difference does having a major research university in a place like Wisconsin make?” said Rebecca Blank, the chancellor of the University of Wisconsin. “It’s the future of the state.” If Blank is right, then current trends put that future in doubt for much of the Midwest. Many of these same universities have suffered some of the nation’s deepest cuts to public higher education. Illinois reduced per-student spending by an inflation-adjusted 54 percent between 2008 and last year, according to the Center on Budget and Policy Priorities. The figure was 22 percent in Iowa and Missouri, 21 percent in Michigan, 15 percent in Minnesota and Ohio, and 6 percent in Indiana. While higher education funding increased last year in 38 states, Scott Walker’s budget for 2015 through 2017 cut another $250 million from the University of Wisconsin system. The University of Iowa recently had its state appropriation cut by 6 percent, including an unexpected $9 million in the middle of the fiscal year.
The University of Missouri is eliminating about 400 employee positions, many through layoffs, after protests over race and other issues resulted in the resignations of the chancellor and system president and a major drop in enrollment. That decline, plus state budget cuts, will cost the school more than $31 million, though it hopes to make up some of that shortfall by increasing tuition.
These financial woes would only be made worse by Trump’s proposed budget, which would cut funding by between 11 percent and 18 percent for the federal agencies that provide the bulk of government support for university research. Congress has so far resisted this call, instead adding $2 billion to the NIH and $8.7 million to the NSF in the five-month budget extension approved in April. But budget cuts remain a threat. So does a Trump budget proposal to eliminate so-called indirect cost payments—billions of dollars’ worth of federal reimbursements for overhead such as lab space and support staff to conduct the research. (The House Republicans’ 2018 budget plan rejects that idea, at least for medical research.)
Private universities with big endowments and wealthy donors may be able to weather the storm. (So, too, may the handful of public universities, like the University of Michigan and the University of Virginia, that receive far more private than public funding.) But most public research institutions won’t.
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This is not abstract or anecdotal. Midwestern public universities are already experiencing a pattern of relative decline, based on NSF rankings of universities by total research-and-development expenditures.
From fiscal years 2007 to 2015, according to NSF data, federal funding for university- and college-based research grew by 8 percent nationwide. But for the seven states generally considered by research organizations to make up the Midwest—Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin (to its definition of “Midwest,” the U.S. Census Bureau adds Kansas, Missouri, Nebraska, North Dakota, and South Dakota)—the increase was only 4 percent. Both those numbers lag far behind the roughly 14 percent inflation during that time period, meaning that federal funding for university research actually decreased overall, and it decreased more in the Midwest. As private and better-funded public universities elsewhere in the country found alternative sources of support, they pushed their Midwestern rivals down the research rankings.
The University of Wisconsin–Madison was ranked second in 2008; in 2015, for the first time since the figures have been tracked, it fell out of the top five. Ohio State dropped from 10th to 20th, Missouri from 71st to 85th. The University of Iowa rose from 60th in 2008 to a peak of 39th in 2010, but has since fallen back to 49th. Purdue, for which the NSF rankings date only from 2010, has slipped from 32nd then to 37th now.
Some experts caution against reading too much into these numbers. Big changes in research rankings could result from shifts in the type of research under way, said Howard Gobstein, the executive vice president of the Association of Public and Land-grant Universities. Biomedical research, for example, costs more and brings in bigger grants than research in the humanities.
The question is how long that can last. In Illinois, for instance, research output has stayed surprisingly steady as of 2015, the most recent year for which full data is available. But since then, a budget impasse has resulted in some of the deepest cuts to higher education in the nation. (Thanks to a legislative override, the more-than-two-year budget standoff finally ended in July, but significant damage had already been done to university enrollments, staffing, and facilities.)
“It really is amazing that the administrators and staff can keep it together by cutting everywhere they can,” said Arthur Kramer, who last year left a post as head of the University of Illinois’s Beckman Institute for Advanced Science and Technology, a 313,000-square-foot research center, for a provost position at the private Northeastern University in Boston. “But this can’t go on forever.”
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Rebecca Blank, chancellor of the University of Wisconsin–Madison, has been outspoken about the problems facing her institution and others like it. She told the state board of regents in 2015 that budget cuts had hastened Wisconsin’s much-lamented fall out of the top five of the NSF rankings; more reductions, she warned, would further jeopardize the school’s standing as a top research university. (Governor Scott Walker’s proposed budget would restore $105 million over the next two years to the University of Wisconsin system, and an additional $35 million to offset money lost from cutting tuition. But that’s still a full $110 million less than what the system lost in the budget covering 2015 through 2017.)
Prodded by Walker, Wisconsin’s legislature changed tenure protections to allow for the firing of tenured faculty for reasons other than an imminent threat to the survival of the institution—the threshold in many other systems. The result has been something many other public universities are reluctant to discuss, but that Blank addresses frankly: the raiding of her faculty by better-endowed institutions.
More than 140 Wisconsin faculty members were approached with job offers by other universities, including Harvard and Temple, last year, a third more than the year before. Most of them stayed, thanks in large part to salary increases of as much as 49 percent, plus inducements like new research equipment and teaching and research assistants. All of that cost the already cash-strapped university nearly $24 million. Still, 29 faculty members left, and with each one of them what the university calculates is an average of $271,795 worth of research funding, or nearly $8 million total. That included the award-winning chemist Laura Kiessling and the biochemist Ronald Raines, who both went to MIT.
“We lost some of our very best people,” Blank said. “It is our very best faculty that get outside offers. If you’re looking at research dollars, those are the people who are bringing in millions in research funding. And the people you replace them with bring in much less. So those retention issues have a real impact.”
There’s equal concern about attracting top new faculty. “Reputations matter here,” Blank said. “If you’ve been a university people have wanted to be coming to for 25 years, and suddenly they don’t, that will be very deadly.” Private and better-funded public universities can continue to offer talented new professors not only more money, but also more stability—and they can continue to treat Midwestern universities like candy stores, shopping there for star faculty who may be ready to jump ship.
Illinois lost a slightly smaller number of professors—22, up from 13 in the year before. There, the ongoing budget uncertainty has been made worse not because of changes to tenure but because of threats to pensions earned by public employees, including those at universities.
Most Wisconsin faculty cited salary as the reason for leaving or entertaining job offers. Blank said the median offer promised a salary 30 percent higher. Pay is another area in which public universities are losing ground—especially those in the Midwest, unable to get more money from their legislatures for counteroffers. The University of Wisconsin system requested $78 million this year for faculty raises. Walker has offered less than $12 million. University of Iowa’s president, Bruce Harreld, said in a statement that his faculty is being “cherry-picked by other institutions.” But when he asked the legislature in 2015 for $4.5 million to retain key faculty and recruit more, the request was turned down. (The university announced in late June that it would find $4.9 million from its existing budget to give some of its faculty raises.)
Full professors at public doctoral universities already make 24 percent less than their counterparts at private ones, according to the American Association of University Professors. And full professors at public universities in Illinois, Indiana, Michigan, Ohio, and Wisconsin earn 9 percent less than those at institutions on the West Coast, 17 percent less than those in the Mid-Atlantic states, and 28 percent less than those in the Northeast.
“Clearly, private universities have an advantage in this case to expand their faculty, because they haven’t been dependent on state funding,” said Barbara McFadden Allen, the executive director of the Big Ten Academic Alliance. “If you’re in Illinois and you haven’t had a budget for three years, your faculty are restless.”
That’s what Kramer saw among his University of Illinois colleagues before he left, along with his wife, Laurie, who was also a professor there. “A number of the faculty came to me and said either their spouse was worried or they were worried or they both were worried about the pension situation,” he said. “I had a budget cut every year. It gets tough. It also gets frustrating.”
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While the decline in public research funding may hurt Midwestern communities first, in the long run it puts the national economy at risk. The long slide in American R&D has triggered warnings since 2007, when a commission of experts from the National Academy of Science, the National Academy of Engineering, and the Institute of Medicine produced a report ominously titled “Rising Above the Gathering Storm.” It urged that the federal government do no less than double spending on research.
Instead, the situation worsened. By 2012, the National Science Board pronounced itself “concerned about the continued ability” of public universities to “conduct the basic science and engineering research that leads to innovations.” In a 2013 survey by the Association of Public and Land-grant Universities, more than three-quarters of provosts said federal spending cuts tied to sequestration were taking a toll on their universities, including in research. The state cuts have only made things worse.
Meanwhile, global economic rivals have continued to approach and even surpass the level of American research output. The U.S. share of all research and development funding worldwide dropped from more than a third to barely a quarter from 2003 to 2013, the most recent period for which the figures are available. China could catch up by 2030 based on current trends. Last year, Chinese researchers for the first time filed more patents applications in the life sciences than their U.S. counterparts. The historical global leader in science and technology, the United States is now ninth among the nations of the Organization for Economic Cooperation and Development in the proportion of gross domestic product spent on research.
Because basic science can take decades to translate into new drugs or products, the consequences of this won’t be immediately visible. That makes it hard to argue for renewed investment in research in a political system that doesn’t prioritize long-term thinking. Nor does private industry always want to invest in the years of research it can take to translate fundamental discoveries into the kind of marketable commodities that drive the American economy—and that often originate at universities.
“We’ve been in the lead long enough that people think we always will be, [but] we cannot assume that we are going to lead the world in technology 20 or 30 years from now,” Wisconsin’s Blank said. “I think we’ve stalled out.”
Meanwhile, doctoral students and younger faculty are leaving, too, or are stuck in limbo while awaiting research funding of their own. Where the NIH funded more than 30 percent of its grant proposals as recently as 2000, it now approves just over 15 percent of them. The NSF approves only one in four proposals. The average age at which researchers win their first NIH grant now is 42, up from 38 in 1980.
“It’s getting more competitive to get this funding, and that’s your bread and butter if you want to get a faculty position,” said Billy McCulloch, a 26-year-old doctoral candidate at Ohio State who is developing a next-generation fuel cell. McCullouch does want a position in academia, but he’s almost certain there won’t be one for him; many of his friends are getting jobs in Asia.
“The long-term consequence of this is a significant brain drain,” said Nicholas C. Burbules, a professor of education at the University of Illinois. “Other countries around the world are looking at what’s happening here with eagerness and snapping people up. It takes a long time to build up quality and talent at this level. It doesn’t take very long to lose it.”
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There are some efforts being made to reverse these trends. Universities are trying to do more to make the public understand their value, while more private philanthropic money has been flowing into research.
“We are working hard to diversify the funding sources of the faculty funding portfolios,” says Susan Olesik, a professor of chemistry and biochemistry at Ohio State, as she gives a tour of a two-year-old, $120 million building that combines chemical and biomolecular engineering research. “It’s a matter of survival.”
But without a renewed commitment to research funding from the federal and state governments, that survival is in serious doubt. The system of public research universities that Abraham Lincoln helped create—the one that became the envy of the rest of the world and a central component of America’s dominance of science, technology, and the global economy—has become an afterthought and even a target of state and national political leaders. Declining university research may be less visible than decaying roads and rail systems, but the results could be even more devastating and harder to reverse.
Behind Olesik, in a frigid room crammed with $15.4 million worth of nuclear magnetic resonance spectrometers that look like stubby spaceships, scientists are analyzing how polymer chains interact, down to their individual amino acids. The results will help the state’s polymer industry avoid costly impurities. There’s a steady wheezing of compressors and a whoosh as a sample is whisked through a tube and into a huge white tank, where superconducting magnets are bathed in liquid helium to keep them at a temperature of –273 degrees Celsius.
Olesik gestures toward the researchers working in the lab. “They will leave,” she says. She is referring not just to her own staff, but also to the bright young researchers working in centers like hers on this campus and others across the Midwest. “That’s the problem.”
This article appears courtesy of Washington Monthly.