In my jurisdiction, 71% of the education budget goes to teacher salaries, so education expenses couldn't have grown substantially faster than teacher salaries.

And Baumol doesn't require salaries going up, it works just fine if salaries stay constant while the price of consumer goods goes down.

Here's an alternative explanation that explains the rise in both education and health care as well as the drop in the price of consumer electronics: the customer doesn't pay.

In both health care and education, the final customer often does not pay. When I go to a doctor and ask them how much something will cost, I get bewildered looks. They rarely hear that question. I don't pay, my insurance pays and I pay some co-pay. Same thing for education. I'm pretty much stuck with my local school district, or if its college, I get subsidized no questions asked student loans.

But compare that to something that's paid out of pocket by the consumer. Consider something like Lasik surgery. It costs about $2-3k per eye an. Pretty incredible considering its relatively new procedure. I can't find a single outpatient surgery covered by insurance that costs that little. Cosmetic surgery is similarly cheap. And the difference is that the Lasik surgery is paid by the consumer and most people would shop around, ask about prices, etc. No subsidized Lasik loans, no insurance coverage, just straight forward pricing.

You're helping my argument, not yours. :) The energy market is different/better than education and health care, so subsidies are more likely to flow to the consumer.