Improving Educational Attainment Is Best Way to Strengthen Oregon Economy

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Improving Educational Attainment Is Best Way to Strengthen Oregon Economy

InsideCapitolDome
The best way for Oregon to strengthen its economy is by investing more to create a better educated workforce, according to a national report by the Oregon Center for Public Policy (OCPP) and the Economic Analysis and Research Network (EARN), a project of the Economic Policy Institute (EPI).

Improving Educational Attainment Is Best Way to Strengthen Oregon Economy

The best way for Oregon to strengthen its economy is by investing more to create a better educated workforce, according to a national report by the Oregon Center for Public Policy (OCPP) and the Economic Analysis and Research Network (EARN), a project of the Economic Policy Institute (EPI).

The EARN report found “clear and strong” evidence that states’ workforces with higher levels of educational attainment tend to be more productive and enjoy a higher median wage. The median wage represents what the typical worker earns.

“If Oregon lawmakers want a stronger economy — one where typical Oregonians earn more — they need to raise our workforce’s educational attainment,” said OCPP executive director Chuck Sheketoff. “That means lawmakers need to invest more in education, from early childhood through higher education.”

Download a copy of this news release:

Improving Educational Attainment Is Best Way to Strengthen Oregon Economy (PDF)


Related materials:

A Well-Educated Workforce Is Key to State Prosperity, Economic Analysis Research Network, August 22, 2013

The Key to Increasing Wages and Productivity, Oregon Center for Public Policy, August 2013

The EARN report also documents that cutting taxes in the hopes of attracting businesses would not increase wages. The authors found “no clear relationship” between state tax levels and median wages.

“Tax cuts for corporations and the wealthy not only won’t strengthen our economy, they will waste valuable resources needed to better educate our workforce,” added Sheketoff.

The report found that median wages hover around $15 an hour in the 22 states with the least-educated workforces, defined as states with 30 percent or less of the workforce with at least a bachelor’s degree.

By contrast, in the three states where more than 40 percent of the population has at least a bachelor’s degree, median wages are $19 to $20 an hour. That is nearly a third higher than in states with the least-educated workforces.

The authors of the report, Noah Berger, president of the Massachusetts Budget and Policy Center, and Peter Fisher, research director at the Iowa Policy Project, described a “striking consistency” in their findings, noting that “there are no states with a relatively well-educated workforce and relatively low wages and virtually no states with low levels of education and relatively high wages.”

The report also found that states with better-educated workforces enjoyed higher gains in productivity. Higher productivity, in turn, was associated with higher wages for the typical worker.

In this respect, Oregon is an exception. The report found that Oregon has had relatively little change in the compensation of the typical worker despite big increases in productivity.

Sheketoff called this result the “Intel effect.” The semiconductor giant, the state’s largest private employer, has been the main driver in productivity increases in the Oregon economy. “Intel’s significant productivity doesn’t spill far into the broader state economy in terms of the well-being of the typical worker,” he said.

“By investing in improved educational attainment, Oregon could see even more productivity growth and at last a boost in wages for the typical worker,” Sheketoff said.

Sheketoff noted a long-term benefit besides wage gains. “Investing in education is also good for state budgets in the long run,” said Sheketoff. “Highly educated workers have higher incomes and thus pay more in taxes.”

The report points to several policies states can use to increase educational attainment. These strategies include increasing access to postsecondary education by curbing tuition growth and increasing financial aid, reducing high school dropout rates, moving people without high school degrees through GED and associate degree programs, increasing the quality of K-12 education to improve success of high school graduates in postsecondary education, and offering universal preschool programs, which lead to long-term improvements in educational outcomes.

“We know what’s preventing higher educational attainment and what’s needed to improve it,” said Sheketoff. “We just need to make those policies a priority and stop the wasteful tax subsidies that plainly don’t work and rob the state of valuable resources.”

The Oregon Center for Public Policy is a non-partisan research institute that does in-depth research and analysis on budget, tax and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.

Posted in Education.

More about: intelproductivity

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Written by staff at the Oregon Center for Public Policy.

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