Why creating (and keeping) a better-educated workforce is good for the economy
The amount of money in your paycheck can make or break the U.S. economy, because consumer spending accounts for 70 percent of economic activity.
The single most significant indicator of how much money you will earn is your educational attainment. Men and women with a bachelor’s degree earned an average $50,900 in 2005, while those with a high school diploma earned $31,500 and those who did not finish high school earned $23,400, according to a 2007 College Board study, “Education Pays.”
That’s why higher education plays a vital role in fueling Connecticut’s economic growth: The more college graduates the state produces, the more state residents earn — and spend.
The positive news: The percentage of college graduates among Connecticut’s adult population has continued to rise, from 27.2 percent in 1990 to 34.7 percent in 2009, according to the state’s Department of Economic & Community Development (DECD).
The less-positive news: The 1990 numbers were enough to rank Connecticut first among the 50 states, but other states started to catch up in the early 2000s, and currently Connecticut ranks fourth, behind Massachusetts, Colorado and Maryland. And a 2006 report by the
Nellie Mae Education Foundation predicts the number will decline from its current
34.7 percent to 30 percent by 2020.
“For the first time in 50 years, we will not replace our retirees with a more educated workforce,” reads the conclusion to a 2009 report by the P-20 Council, a commission formed by Gov. M. Jodi Rell last year to foster collaboration between schools and industry.
Adding urgency to the situation is the fact that Connecticut has lost a higher percentage of its 25-to-34-year-old population than any other state in the nation since 2000, according to the U.S. Census Bureau. The state population in the 25-34 cohort plummeted 10.8 percent between 2000 and 2007, a trend the Census Bureau projects will continue through 2030. At the same time, the population of those aged 65 and over has jumped 75 percent since 2000, a trend that is also expected to continue.
“As the state’s population ages in place, young talent is not replenishing those retiring — the birth rate is below replacement and young adults continue to leave the state,” according to the DECD’s Connecticut Economic Strategic Plan.
There is already a talent shortage in Connecticut in vital areas such as manufacturing, and 85 percent of companies surveyed by the state in 2007 said they have no strategy in place to offset the impending wave of baby-boomer retirements.
“The future of the state hinges on whether thousands of young people will launch their educations, their graduate studiesand their careers in New England,” says the Connecticut Economic Strategic Plan. “Moreover, it is crucial to find entry-level jobs that offer sufficient pay and upward mobility to entice young Connecticut students to stay.”
Many young adults and graduates of Connecticut colleges are leaving the state due to the high cost of living — housing, energy and taxes — and to a comparative lack of opportunities to obtain high-paying jobs, the plan says.
An Economic Powerhouse
From Yale University to Gateway Community College, institutions of higher education in Connecticut contributed nearly $24 billion to the state’s economy in 2006, the latest figure available, according to a 2009 report by the New England Board of Higher Education. That included $3.2 billion in direct expenditures and $203 million contributed by more than 7,000 foreign students attending school in the state.
Higher education employs more than 40,000 Connecticut residents, and Connecticut ranks seventh nationwide among states when it comes to fostering new technologies, companies and patents, the study shows.
Major Connecticut schools include the University of Connecticut, the four state universities, 12 community colleges and 28 independent colleges such as Yale, Quinnipiac University, Wesleyan University and Trinity College.
“Connecticut is rich in institutions of higher education, which really positions Connecticut to produce and attract the best and the brightest,” says State Rep. Roberta Willis (D-64) of Salisbury, who co-chairs the Higher Education and Employment Advancement Committee. “We really are fortunate. People come from all over the country to go to school here.”
Willis, a former teacher with four children of her own, says the focus of her legislative committee is on finding ways to maintain and grow Connecticut’s highly skilled workforce, a process that begins with education.
“The more education you have, the more money you make,” Willis says. “When people don’t have disposable incomes, they’re not spending it.”
A highly educated and skilled workforce has always been Connecticut’s strongest draw to bring in new businesses, Willis says. “We are never going to be the least expensive state to do business in, so the question is: What do we have to offer business and industry? Businesses need employees who can give them a competitive edge in a more technological and knowledge-based economy.”
The key to ensuring the state’s workforce remains competitive with other states is to persuade more young people to remain in Connecticut after they graduate. That requires state officials to make every effort to support job creation, Willis says.
Of the 17,928 students who graduated from Connecticut public colleges in 2007, a total of 12,471, or 70 percent, were employed in Connecticut in the third quarter after graduation and earned an average of $40,684 per year, according to the DECD. However, the economic downturn in 2008 and 2009 led to the loss of 70,000 jobs in Connecticut.
“Our biggest problem now is getting companies to start hiring again,” Willis acknowledges. “Do we conduct workforce development training and education if there are no jobs at the end of the tunnel?”
Willis says the state is unable to invest as much into education and job growth as it needs to, because state revenues have plunged 24 percent in the midst of a global recession. Still, the legislature has taken action, passing various tax incentives and loan assistance programs to keep capital flowing to small businesses, she notes.
“It’s going to take a while, and we don’t know how much it’s going to help, but you have to do something,” she says. “We’ve taken a step in the right direction.”
Coming Together
The primary strategy employed by state agencies and private industry groups has been to establish programs designed to bring representatives of business, education and government together to work collaboratively on the problem. Some of these efforts are beginning to bear fruit.
“If you look at economic development, states draw companies with tax incentives and grants,” says Judith K. Resnick, executive director of the Connecticut Business & Industry Association’s (CBIA) Education Foundation. “A third key factor today is that companies look to expand or relocate to places where they know there is a supply of people who they can hire, both today and in the future. That’s where higher education comes in.”
The CBIA Education Foundation recently completed work under a $1.77 million grant from the U.S. Department of Labor designed to help Connecticut manufacturers find workers trained in advanced manufacturing techniques. The foundation brought manufacturers together with the state’s community colleges, which created two new certificate programs to teach the skills needed in today’s global environment. Ten of the state’s 12 community colleges now offer the certificate programs.
“Our community colleges are very responsive,” Resnick says. “They have become ‘graduate schools’ in their own right.”
The foundation received another grant to look at the critical hiring needs of pharmaceutical and biotech firms, which revolve around research and chemistry, Resnick says. The foundation created a new fellowship program under which undergraduate chemistry majors can conduct research at Pfizer (along with graduate students), and also created new courses at the University of Connecticut.
“Our goal is to build a skilled workforce for Connecticut’s business community,” says Resnick. “We need higher education and business to be partners in economic development, and we will work to make that happen so that Connecticut has the workforce it needs.”
Willis also praises the work being done by Connecticut’s community colleges. “They really have the ability to quickly give people the skills they need to go out and get jobs,” she says. “They respond more quickly to the changing needs of industry.”
The Higher Education and Employment Advancement Committee held hearings earlier this year about the need for community colleges to focus on remedial education, and the committee hopes to find funds to help with the effort, Willis says.
The committee also passed a bill this year providing money to renovate the University of Connecticut Health Center, which is expected to add up to 5,000 new jobs over the next decade.
Focus on Manufacturing
The state’s manufacturing industry has been hit particularly hard by the double whammy of globalization and the recession. Connecticut has lost 19,000 manufacturing jobs since May 2008, according to the 2011 Connecticut Manufacturers Register. Contributing to the problem is a lack of students trained in today’s advanced manufacturing techniques, explains Robert Klancko, chairman of the Workforce Enhancement Committee of the New Haven Manufacturers Association.
Klancko says many of the current efforts to bring university faculty and industry representatives together fall short because the schools focus too much on the largest employers, such as General Electric, Pfizer and United Technologies Corp.
“Small manufacturers are the backbone of our industry, but these are resource-strapped companies that can’t endow scholarships,” Klancko says. “Yet these are the people who need technology assistance more than anyone else.”
Government and educational leaders “are not focusing enough on first-day employability skills and the actual needs of manufacturers in the state of Connecticut,” Klancko says. “When it comes to scholarships and grants and internships, it appears that there is a lot being done from the theoretical perspective, but in the applied engineering sciences it’s weaker.”
Klancko says small manufacturers function as subcontractors for larger companies, and often they need workers with unique skills rather than someone who has been highly trained in theory.
“Many students today are involved in esoteric research projects,” he says. “But the industry today needs people who can solve immediate problems quickly and efficiently. There has to be an emphasis on creating graduates who possess the knowledge, skills, motivation and relationships necessary to help these employers out.”
Klancko says government and industry leaders should direct more funding and support toward the state’s 19 vocational agricultural schools, which provide students with both theoretical knowledge and practical skills. He cites the example of New Haven’s Sound School.
“Sound School students learn not only how to design a boat, they must also build and launch a boat,” he says. “They learn teamwork and design principles. They understand the theoretical science because they apply it to real-world applications. They also have machine shops, where they learn how to work on engines.”
Klancko also urges faculty members to make more efforts to connect with the local business community, including small businesses.
Resnick says educational leaders need to start focusing on emerging needs as the competitive picture changes more rapidly in today’s global market.
“Right now we are examining the energy sector,” she says. “It’s potentially a huge growth area. How do we make sure that when geothermal or wind energy emerges we will have trained workers ready? It’s a crystal ball, and it can be very difficult.”
Emerging markets include energy efficiency, nanotechnology, genetics, digital health-care technology and long-term care nursing, she adds.
Back to School
Efforts to ensure that institutions of higher education continue to serve Connecticut’s employment needs must begin in grade school and even earlier, says Michael P. Meotti, commissioner of the state’s Department of Higher Education.
“If we want to have an adult workforce that is ever increasing in educational attainment, we’re going to do that with students who graduate from Connecticut high schools who go to post-secondary schools in their own backyard,” Meotti says. “But the majority of students from local high schools today who attend Southern Connecticut State University or Gateway Community College need to take remedial math or English. There is a lot of room for improvement.”
Indeed, the P-20 Council cited a survey showing that Connecticut’s community college system estimates that 80 percent of its entering students require one or more courses in developmental math or English.
Sixty-two percent of the state’s high school graduates enroll in college the autumn after they graduate, and Connecticut ranks 13th in the nation on this measure, according to the P-20 Council. Forty percent of Connecticut’s high school graduates are academically ready for college, and the state ranks fourth nationally on this measure.
As Connecticut’s minority population has increased, so have the challenges facing many students who come from low-income backgrounds. “Some are parents themselves, and many have financial challenges that go beyond tuition to the broader cost of living and supporting a household,” Meotti says.
In order to address some of these new challenges, the Department of Higher Education has started a program that brings high school and college instructors together to discuss how to ensure students are better prepared for college coming out of high school. The first meetings occurred in Danbury, between instructors at Danbury High School and Western Connecticut State University.
“It is showing early signs of success in reducing the need for students to take remedial math,” Meotti says. “We are building on that approach, and this fall we are going to promote new regional partnerships. If we can significantly improve the success that Connecticut residents have graduating from a Connecticut high school and going to college in their backyard, we will have an adult workforce that is much more ready for the jobs of the 21st century.”
The Department of Higher Education is also working with business and industry leaders to make sure curricula are in alignment with business needs, Meotti says. It’s becoming clear from these interactions that the state needs to more broadly define post-secondary education, he says.
“We are now talking about any kind of rigorous educational program after high school that are relevant to a student’s future plans,” Meotti says. “Many students are looking for career relevance, and you will start to see credentials changing. You will see more associate degrees and certificate programs.”
Certificate programs tend to be highly career-focused, with courses designed specifically to teach skills in fields such as allied health or green technology. Meotti says a new model is emerging under which students will earn a certificate in order to start working, meeting their short-term goals, and then build on that by attending a broader educational program down the road.
A 2006 report by the state’s Department of Labor estimated that 34 percent of Connecticut’s job openings over the next ten years would require post-secondary education, while 38 percent would require short-term on-the-job training.
“Increasingly jobs require some kind of post-secondary credential,” Meotti says. “The number of good jobs you can get with a high school diploma is shrinking. If employers cannot find the workforce with the right background they will start to look elsewhere to locate their operations.”
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