The college town economy

Barbara Ehrenreich has some interesting thoughts in this exchange about Wal-Mart. Since I received my first paycheck, I've been thinking about this:

So, I would have to advise H. Lee that the Wal-Mart plan may not be sustainable: If you underpay people enough, in the absence of adequate and reliable government subsidies to compensate for their meager wages, they're not going to be able to buy your stuff.

Specifically, I've been thinking about how the economics of my town are endlessly sustainable because of a certain large university.

I almost cried when I got my first paycheck. After taxes, it wasn't even enough to cover the money I spent on my uniform. "But what about all those hours I've been working?" That paycheck comes two weeks later, July 14th. So I resigned myself to another two weeks on a $50 budget: I can spend $25 per week on groceries, and that's it.

Okay, you shouldn't feel sorry for me. I'm just scraping through one lousy summer. But countless workers earn these poverty wages for decades. We have an entire population of workers who carefully budget for rent and groceries their entire lives. They don't contribute to the local economy. But the local economy doesn't affect my company because of the university.

This is how it works:

1. Tuition dollars and alumni donations support the university.
2. The university pays contractors to run the place.
3. The contractors hire local workers for poverty wages.

And, nobody cares that the entire community is poor. Because it's a one-way equation:

Tuition & Donations --> University --> Contractors

Local businesses would make more money if the university paid a living wage, but I can see why the university doesn't care about local poverty. All of the money comes from out of town.