For Immediate Release: April 26, 2012
New Tool: U.S. on Track to Leave Nearly $600 Billion in Revenue on the Table Unless Nation and States Increase Number of Adults with Postsecondary Credentials
U.S. will need 24 million additional degrees by 2025 to remain competitive; State ranking show some states have much more ground to make up than others
The nation is 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 leave hundreds of billions of dollars in revenue on the table. These are the findings from a dynamic new data analysis released today by CLASP and the National Center for Higher Education Management Systems (NCHEMS).
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. 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. At current attainment rates, the U.S. is on track to produce just 278,500 additional degrees by 2025 - a significant shortfall.
"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 tool allows stakeholders to calculate the short- and long-term effects of either maintaining the status quo or increasing postsecondary participation and credential attainment. 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.
Using the tool, Nevada, Alaska and Louisiana lead the states with the highest year-to-year percentage increases needed to meet the 2025 goal of having a 60 percent degree attainment rate among adults 25 to 64, while New York, North Dakota and Massachusetts are in better shape, needing the smallest year-to-year percentage increase to meet the 2025 goal. A full state ranking list can be found online.
"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.
"It's clear from using this tool that Illinois and its residents are set to see significant financial gains if the state increases the number of adults with a postsecondary credential," said Meegan Dugan Bassett, Senior Policy Associate at Women Employed in Chicago, Ill. "At a time when states are facing tough budgetary decisions and many families are struggling, policymakers need to focus on fiscal decisions that will bring real returns. Investing in helping more people access and complete postsecondary education will bring these returns."
Using data from the Census Bureau, National Center for Education Statistics and the Department of Education, the tool allows 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.