Monday, December 07, 2009

You Can't Have Cake and Eat it Too

by Daniel L. Bennett

Surely the temperature was warmer than the message delivered by Mark Wilson of the Florida Chamber of Commerce at last week's Higher Education Government Relation's Conference in Orlando: "Stop asking for money!"

Wilson was quoted by Inside Higher Ed as saying:
Colleges can't just engage in their usual tack of asking business leaders to help them lobby legislators for more money...

they must show a propensity to "match up their supply of students with the demand for jobs.... I'm confident there will be more money available for degrees that the business community needs," but not necessarily more money for the status quo.
Wilson's statements are laudable in calling for accountability of higher ed and he continues with an equally compelling statement that:
What the state needs in order to an education system that serves as a “talent supply chain” to produce enough educated and skilled workers to provide the workers needed by companies in Florida’s emerging industries
However, Wilson continues with somewhat of a dubious claim:
If Florida doesn’t produce them, the companies will leave to go where the workers are...
I agree with Wilson that the education system should aim to produce graduates with the skills and education in demand by the labor force, but his assertion that companies will pack up shop and skip town if the local supply of workers is less than demand is questionable. Skilled workers are a highly mobile group, with a high propensity to follow the money trail. The high concentration of migratory skilled workers in the nation's most prosperous cities (New York, San Francisco, Washington, DC, etc) seems to suggest that educated workers go where the jobs are, not vice versa.

The idea that a state can attract businesses by increasing its pool of educated citizens is an unproven myth. Yet, it is precisely this fallacy that is often championed by higher education officials and their cheerleaders (see for example, efforts by Arizona and North Dakota) in lobbying for more public funds. A recent study released by CCAP and the ND Policy provides evidence to the contrary: that there is a negative relationship between public investments in higher education and economic growth.

While I'm sure that a skilled local workforce is appealing to prospective businesses, they are likely to consider a number of additional details when deciding where to locate, including the tax and regulatory conditions, local market / wage conditions, and access to distribution routes, among other things. The higher ed establishment favors tax hikes in order to increase the pool of funding available to it, which is counter intuitive to making a state or locale attractive to the businesses that will hopefully hire its graduates. If a state has an oversupply of college graduates but no employers to hire them, then they will migrate to places where jobs do exist. The higher ed establishment needs to learn that it can't have its cake and eat it too.


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