In Their Quest to Advance Michigan, New State Leaders Should Prioritize Talent Development

In Economic Development by Dan Hurley

An earlier version of this commentary originally appeared in Bridge Magazine

The world of work has changed over the last 20 years. It’s vital that Michigan change with it. That means placing a priority on investing in education that can provide the talent needed to attract and retain good paying jobs.

The $25-an-hour factory job is no longer the driver of a successful economy, as it was for years in Michigan. And those jobs are not coming back as automation and globalization continue to transform our workplaces and economy. Today, successful economies are driven by knowledge industries, the kind that locate and grow in communities with an abundance of college graduates.

It’s time for Michigan to accept and embrace this future; otherwise, we risk continuing to fall behind other states in the competition for good-paying jobs that can pay for a family’s home, an education for their children, and a decent retirement. That requires a rethinking of some basic state policy and investment priorities.

Michigan in 2000 was a top 20 state in per capita income in a factory-driven industrial economy. Today, it has fallen to 31st, as factory wages and the number of factory jobs have declined. Our median household income growth over the last four years was 12.6 percent—well behind the national average of 15.5 percent. While Michigan’s unemployment rate is low in contrast to 2010, it remains comparatively high nationally, ranking 30th.

The reason for this is straightforward: Michigan ranks low for residents who possess a college degree, also coming in at 31st.

It is no surprise that the top 10 states in per-capita earnings (excluding the oil-pumping states of Alaska and Wyoming) are among the top 15 states in educational attainment (bachelor’s degree or higher). Our Midwest counterpart, Minnesota, invests nearly 50 percent more in higher education than does Michigan. The result: it ranks 9th in educational attainment and 13th in income.

One need only look at companies such as Apple, Google and Amazon, and growing industries like health care, information technology, engineering and business services to realize that they are built on talent.

Amazon bypassed Michigan in its search for its second headquarters, with its $100,000-a-year jobs, because the state didn’t have a deep enough talent pool due to a lack of college graduates. Instead, the company has received tax breaks to build warehouses here, creating $15-an-hour jobs. That same pattern—the state investing in low paying jobs, and then being unable to invest in advanced education—has been repeated time and time again for the last 20 years.

Research by the Georgetown Center for Education and the Workforce says by 2020 we will need 176,000 more college grads to fill Michigan job openings, along with 126,000 workers with a two-year degree or certificate. A state government analysis of the “Hot 50” high-demand, high-wage occupations in Michigan through 2026 indicate that 36 of them will require at least a four-year degree.

While the data clearly show that Michigan needs a lot more college graduates, not everyone needs to earn a four-year college degree. But it’s important to recognize that those skilled workers who do not have a degree—plumbers, electricians, and others—command higher earnings when they work in communities with a lot of college graduates, who can better afford to pay for their services.

Since 2002, Michigan’s financial support per public university student has dropped from $9,511 (in current dollars) to $5,546. We fund our state universities at half the national average. We simply are not investing adequately in talent.

The Michigan Higher Education Attainment Roundtable (MiHEART) shared its recently released report “Total Talent,” calling for talent-building to be a top priority for the state. Fortunately, there is growing support with a new administration and Legislature to reset our state’s support for postsecondary education, to create more four-year college degree, associate degree and certificate-holding workers for Michigan.

In her first State of the State Address, the policy priorities set forth by Michigan Governor Gretchen Whitmer clearly reflected the incredible economic value of investing in higher education, in our people, and in our state’s future prosperity. Setting an ambitious and much-needed educational attainment goal for the state and proposing new scholarship programs to increase college affordability is a strong and commendable start.

What’s needed now is for state lawmakers to act on these bold and vital initiatives.

Daniel J. Hurley is the Chief Executive Officer at the Michigan Association of State Universities

@Daniel_J_Hurley     @MASUmichigan