“It costs more to put the label on the can than to put the tomatoes in it.”
It was 1953. I was seven years old when I heard this. Half of our neighbors were farmers who grew the crops. Others worked at the canning company. It was true.
But it didn’t sound right then. And it doesn’t sound right now.
Sixty years later, we are rightfully complaining about the exorbitant cost of health care, pharmaceutical drugs, and higher education. Unfortunately, all of these costs are higher due to the cost of labeling.
The cost of medication took off when drug companies discovered that sales of prescription drugs skyrocketed when they advertised on television: “Is blork right for you? Ask your doctor! (Side effects may cause thinner wallet, etc.).” The slick-dressed drug sales representatives (making five to six figure salaries) who are ever visible “educating” physicians about the benefits of their drug and the constant barrage of commercials are a major expense that drives up costs far beyond what it costs to produce the drugs. Actual research on new drugs only consumes 15-20 percent of their budget.
Since patients cannot directly buy prescription medicine on our own, there is absolutely no excuse for this advertising. If the drug is still under patent, there is no “competition” excuse. By charging what the rich market will bear, they can ignore the many poor folks who will go without.
And why are medical doctors and hospitals also advertising on billboards and television? Those added costs of advertising are paid by patients who are mostly in doctor’s offices and hospital wards for conditions they did not elect to have.
But my battleground is education. I think it is time for Kansas citizens to ask why our interstates are lined with billboards and our cable channels laden with advertisements for colleges and universities? Advertising may not be anywhere as big a portion of college expenses as it is in pharmaceuticals. But the bottom line is that either state taxpayer money, student tuition, or alumni contributions go toward convincing students to attend one school rather than another.
In public universities, this advertising cost is less than for private non-profit colleges. But the extent of money wasted on advertising becomes outrageous when we move to for-profit and especially for-profit online “schools.”
The report “Student Debt and the Class of 2012" was recently released by the Project on Student Debt, part of the nonprofit Institute for College Access & Success. It breaks down borrowing by state and by college. College debt goes up dramatically as students shift to for-profit and online, the schools that also do the most advertising.
Another analysis of “Millionaires at Private Colleges” released in December of 2013 shows where their money goes. Some for-profit online operations spend more money on advertising than they do on faculty—who are mostly adjunct “hire-a-profs” living in poverty. And for-profit online institutions also have far more presidents who are paid more than $1-million a year. That pay is more an award for pulling in more “customers” than it is for providing a good education.
Unfortunately, higher education administrators and education leaders in Topeka may blather about advertising merely being a “cost of doing business.”
But every dollar spent on a fancy label is one dollar that cannot go to making the product better or less expensive.
Any seven-year-old knows that.