Traverse City Record-Eagle

September 27, 2012

Phil Power: Education beyond high school vital

BY PHIL POWER, Columnist

---- — "Today, money flows toward people who also have knowledge, advanced skills and the relentless determination to find a better way. Michigan, historically, has not grown enough of this kind of talent. That kind of change will take time and an evolution of our education system."

-- Ron Dzwonkowski, the just-retired associate editor of the Detroit Free Press, from his last column

It's now widely accepted that the "Great Recession" was our nation's worst economic calamity since the Great Depression.

But few are paying much attention to what we've learned from it "¦ except for the thousands of Michiganders still out of a job.

Yet there are lessons aplenty here. Consider data recently assembled by Georgetown University:

n Nationally, people with a high school diploma or less lost 5.6 million jobs during the recession. Not surprising perhaps — except that same people also went on to lose another 230,000 jobs during the "recovery."

n Those with a community college degree or at least some college lost 1.75 million jobs in the recession, but they also gained 1.6 million jobs back during the recovery.

n As for people who had at least a bachelor's degree? They added 187,000 jobs even during the recession. And jobs for those folks increased by 2 million during the recovery!

The conclusions are so stark and so simple it's a wonder every politician now running for office isn't sounding a trumpet:

Workers with a high school diploma or less bore the brunt of the recession. The only people who gained jobs during the recovery were those with education beyond high school.

Here's another way to illustrate the same point, courtesy of the U.S. Bureau of Labor Statistics. In Michigan in 2010, unemployment among those who hadn't graduated from high school was 26 percent. Another 18 percent of those with only a high school diploma were jobless. Unemployment fell to 10 percent among workers with a community college degree.

Yet only 5 percent of those with a bachelor's degree or better were unemployed.

Tragically, the state estimates there are 77,000 jobs going unfilled in Michigan today because employers can't find workers with the necessary skills to fill them.

I talked with Charles Ballard, professor of economics at Michigan State University, about what it takes to attract good-paying jobs to our state. Tax breaks? A better business climate? Nah.

"No. 1 is having skilled workers. No. 2 is having skilled workers. No. 3 is having skilled workers," he said.

Finally, there are signs that what's beginning to slowly happen in Michigan is an emerging consensus that the absolute key to our prosperity as a state is an unprecedented, focused, long-term emphasis on investing in the human capital of our citizens.

"Human capital" sounds like a business term.

It is. It's the sum of the education, skills and talents of people. Investments in capital goods — new plant, equipment, R&D, even humans — are measured by Return on Investment.

The short version is ROI. This is a number that shows how much capital investments pay off over their life. The higher the ROI, the better. The data show conclusively that investments in human capital produce a higher return than anything else.

Like many other things, how we describe things goes a long way to how we understand them "¦ and what we do as a result. Right now, we chop investments in human capital into various artificial categories: Early childhood. Kindergarten through 12th grade schools. Community college. Four-year college. Graduate school.

Separating them is a mistake. They are all aspects of what should be a seamless web of investments in human capital that begins even before birth (with good pre-natal care) and ends whenever a person has enough skills to succeed in the work force.

Our tendency to divide various parts of our human capital system according to whichever bureaucracies happen to manage it is a perfect argument against governments running things.

Regardless, this fact is clear: If you don't have a education and skills beyond a high school diploma, you're toast.

The question is whether Michigan politicians — and Michigan citizens — are ready to recognize facts that are both indisputable and crucial to our survival — and whether they'll have the will to do something beyond it paying lip service to it in an election year.

Phil Power is a former newspaper publisher and University of Michigan Regent. He is founder and president of The Center for Michigan, a centrist think-and-do tank. The opinions expressed here are his own. By e-mail at: ppower@thecenterformichigan. net.