CLASP: Wisconsin will leave $870 million on the table in revenues unless increases are made in the number of adults with postsecondary credentials by 2025
For Immediate Release:
Thursday, April 26, 2012
Contact: Jillian Holzer at CLASP, 202.906.8017, email@example.com
(Washington, D.C.) - New analysis of US Census, National Center for Education Statistics and Department of Education data by CLASP, the Center for Law and Social Policy, and the Center for Higher Education Management Systems (NCHEMS) shows to remain globally competitive, the United States will need to produce 24 million additional degrees by 2025 to achieve a 60 percent degree attainment rate among adults 25 to 64. In Wisconsin, the current rate is 39.1 percent. At current attainment rates, the U.S. is on track to produce just 278,500 additional degrees.
Between now and 2025, Wisconsin is expected to produce fewer credentials than it did the year before, each year slipping further from meeting future business demand for postsecondary credentials. Under the state’s current postsecondary patterns, annual personal per capita income in Wisconsin is projected to decrease by about $59 in 2025 and state revenues in income taxes, property taxes, sales taxes and savings in spending on Medicaid and corrections will decline by about $55 million in 2025 due to the reduction in college degree holders.
However, if Wisconsin improves college participation rates and credential attainment rates to the levels of the top three states, the state will see state revenue exceed postsecondary costs by $450 million in 2025. Wisconsin ranks 28th out of the 50 states, with a significant gap in degrees needed to meet the 60 percent attainment goal by 2025, which is what the state will need to hit to remain globally competitive. To meet this goal, which is 422,727 degrees, Wisconsin will have to outperform leading states in rates of college participation and credential attainment. However, simply by equaling top states’ performance, Wisconsin still reaps significant revenues - annual per capita income would increase by approximately $850 in 2025 and state revenue would increase by about $815 million that year.
The nation overall is also falling behind other leading countries in the number of adults with a postsecondary credential and the skills needed by employers. If the United States does not significantly increase the number of credentialed adults, the country stands to walk away from about $600 billion in additional national revenue in 2025. Currently, the United States ranks 15th among 34 Organisation for Economic Cooperation and Development (OECD) member countries with only 41 percent of the young adults having college degrees, behind leading OECD countries like Canada, Japan, France, and the UK. The top three OECD countries – South Korea, Canada, and Japan - are on track to increase their college degree attainment to 60 percent by 2020.
“Leading OECD countries understand the direct correlation between educational attainment and national economic success. As policymakers and business leaders in the United States continue to look at ways to ensure our national economic prosperity, they need to push for investments to dramatically increase the number of postsecondary credentials,” said Vickie Choitz, Senior Policy Analyst, CLASP. “These increases can’t be put off for another five or 10 years if we want a strong economic future for America.”
The Return on Investment Dashboard released today by CLASP and NCHEMS allows stakeholders to calculate the short- and long-term effects of either maintaining the status quo or increasing investments in postsecondary education. For example, under the status quo, additional national revenues from the 278,500 additional credentials will be about $6 billion. On the other hand, additional national revenue from meeting the 24 million credential mark would top about $600 billion in 2025.
“For some states, the 60 percent goal is out of reach; however, all states would see substantial revenue gains if they invest in increasing the number of adults who attain postsecondary credentials,” said Patrick Kelly, Senior Associate, NCHEMS. “This is a win-win for states, their local businesses, and their local economies.”
Federal and state funding for higher education, adult education and workforce development has declined over the past few decades and remains under threat with budget pressures. This tool shows that moves to cut state funding for postsecondary education and federal Pell Grants are short-sighted. By investing more in postsecondary education, not only will the country’s coffers reap rewards, but so too will personal income grow. Better educated workers earn higher wages and are more likely to be employed than less-educated ones. Under current postsecondary investment patterns, however, annual personal per capita income in the U.S. is projected to increase by just $14 in 2025. By meeting the 60 percent credential attainment goal, annual per capita income would increase significantly more to approximately $1,400.
View the CLASP-NCHEMS Return on Investment Dashboard >>
This dynamic new tool uses data from the Census Bureau, National Center for Education Statistics and the Department of Education, to allow users to project returns by changing various factors like the high school graduation rate and the number of public research university versus public two-year college credentials produced. CLASP has also produced a set of resources based on the tool to help local and state advocates and policymakers know where their state stands comparatively and what levels of investments their state must make to meet credential goals and increase public revenues.
Read the accompanying report, The Credential Differential: The Public Return to Increasing Postsecondary Credential Attainment >>
Read the paper’s Executive Summary >>
Read the state-by-state fact sheets >>
State Ranking Fact Sheet >>