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Education and the economy

June 10, 2011 - Jim Anderson
Lou Glazer is the president and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. He previously served as deputy director of the Michigan Department of Commerce during the Blanchard administration.

One of his chief causes is public investment in higher education. Currently, Michigan ranks 36th when it comes to the percentage of adults with a college degree — a statistic that Glazer finds especially troubling.

"That's our fundamental problem," he said in a recent interview. “It’s not taxes or economic development programs. By far the single best predictor of income for both regions and states is the percentage of adults with a four-year degree.”

That’s a driving vision in Michigan Future’s mission to be a source of ideas on “how Michigan can succeed as a world class community in a knowledge-driven economy.” (The organization’s work is funded by Michigan foundations.)

In addition to supporting more money for higher education, Glazer opposes cuts in support for local government. He applauds portions of Gov. Rick Snyder’s budget, but says the overall strategy is misguided.

“The big picture is that Gov. Snyder’s budget continues the now decade-long pattern of his two predecessors: tax cuts accompanied by cuts in higher education and support for local government. It is a strategy that hasn’t worked the last decade and won’t in the future. In an economy increasingly driven by talent the strongest levers available to states to grow the economy are human capital development and quality of place. Those should be the budget priorities.”

According to Glazer, the most important factor in attracting business to Michigan isn’t the tax rate. Rather, it’s the quality of life and the quality of schools.

Here is how he summarizes Michigan’s economy:

— The state’s prosperity in the last century was built primarily on good-paying, lower-education attainment jobs. Those jobs are gone.

— The auto industry will never again be the state’s major engine of prosperity. It will be much smaller, employ far fewer and will pay its workers less with fewer benefits.

— Manufacturing is no longer a sustainable source of high-income jobs. Nor is it a good source of future job growth. Manufacturing makes up less than 10 percent of the American workforce today and is declining.

— The other industries that are widely believed to be drivers of the Michigan economy — farming and tourism — are also not a solid source of high-paying jobs.

“If the Michigan economy of the future is built on a base of factories, farms and tourism we will be a low-prosperity state,” Glazer says. “The world has changed fundamentally. We either adjust to the changes or we will continue to get poorer compared to the nation.”

The alternative, he continues, is knowledge-based sectors of the economy: health care, education, finance and insurance, professional and technical service and information.

“These are the fast growing and high wage sectors of the American economy today and tomorrow.”

Nearly all the states and regions with the highest incomes, he argues, will be those with the highest proportion of adults with a four-year degree or more.

That’s why Glazer supports public investments in education and what he calls “quality of place” — to prepare residents for the economy of the future and to retain and attract “mobile talent.”

Low education attainment regions and states are destined to be low prosperity regions and states, Glazer says.

Even in the current economic environment, Glazer supports raising taxes to make higher education more affordable or even free.

On the flip side, the conservative Mackinac Center cites statistics showing that states that grow their base of college graduates actually do no better in per capita income growth than those who don’t. It’s better to concentrate on lowering taxes and enacting right-to-work laws, the center says.

“You can’t just wear a white suit to become Mark Twain,” is how the center’s James M. Hohman puts it.

Glazer, meanwhile, says it’s income, not growth, that pays the bills.

Of the 15 states with the highest proportion of adults with a four-year degree, 13 are in the top 15 in per capita income. Wyoming and Alaska are the only low education attainment states in the top 15 in per capita income, largely because of energy resources.

The high college attainment and high per capita income states are in order: Connecticut, Massachusetts, New Jersey, Maryland, New York, Virginia, New Hampshire, Washington, Illinois, California, Minnesota, Colorado and Rhode Island.

Michigan is 36th in college attainment and 36th in per capita income.

Current income should always be the prime metric in comparing states, Glazer says.

Mississippi, for instance, despite having high economic growth rates, is still the poorest state in the nation. Its per capita income in 2009 was $30,103, compared to $34,025 in Michigan; $41,552 in Minnesota and $54,397 in Connecticut.



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