Numbers Don’t Lie – Education Drives Employment, Economic Growth

By: Carol D’Amico - President & CEO, Conexus Indiana

Categories: Economic Development, Economy, Education

In July, Indiana’s unemployment rate ticked up to 6.3%. It’s certainly not good news, though we still boast the lowest unemployment among our neighboring states, thanks to aggressive economic development efforts and record levels of foreign investment in our manufacturing sector.

Continued Below...

Phil Ray, Omni Severin Indianapolis, General Manager

Omni Severin Indianapolis General Manager Phil Ray talks to Inside INdia...

Jonathan Weinzapfel, Mayor of Evansville

In a Studio(i) interview with Inside INdiana Business Host Gerry Dick, W...

Mike Peduto, Partner, Circle City Tickets

In a Studio(i) interview, Peduto talked about the demand for Colts ticke...

We applaud the hard work of our friends at the Indiana Economic Development Corporation, the Indy Partnership and other economic development agencies to bring new jobs to the region. But their efforts have to be matched by longer-term policies to help Hoosiers find work and keep it – and the numbers tell us once again that education is critical.

The Bureau of Labor Statistics reports on annual unemployment rates by educational attainment, and the 2007 data tell a compelling story: Among the adult population without a high school diploma, the unemployment rate was 7.1%. For Americans who graduated from high school, that number dropped to 4.4%. If you went on to earn an associates degree, your odds of finding a job continued to improve, with unemployment at 3%. And if you earned a 4-year college diploma, unemployment was just 2.2%.

I took a cursory look at the July unemployment statistics here in Central Indiana, and see a similar pattern. Indianapolis, Bloomington and Lafayette all boast around 25% of the adult population with a college degree, and all three have unemployment rates hovering just above 5%, well below the state average. In Muncie and Terre Haute, just about 20% of workers graduated from college; their unemployment rates are higher, at 7.6% and 7.1% respectively. And in Kokomo, where only around 15% of workers are college-educated, the unemployment rate grows to 9.2%.

I’ve spent my professional career exploring the power of education. I’ve focused on those issues from a policy perspective at the Hudson Institute, led the nation’s efforts in adult vocational education at the U.S. Department of Education, and tried to help more Hoosiers get on the path to higher education as Chancellor and Vice-President at Ivy Tech.

Now I serve as President of Conexus Indiana, an economic initiative focused on growing our advanced manufacturing and logistics sectors. I’ve found that education is shaping the future of these industries as well, as they evolve to become more high-tech and employers struggle to find skilled workers.

So I could easily be accused of seeing education as the solution to all of our economic woes. It’s like the Mark Twain quote – “To a man with a hammer, every problem looks like a nail.”

But the numbers don’t lie. There’s a definite link between education and employment. And two recent studies by Federal Reserve economists show educational attainment as the strongest driver of per capita income and overall output, perhaps the two best indicators of economic vitality. The evidence continues to mount that education is the common denominator for prosperity in our knowledge-based economy.

For Indiana, it means that our ranking among the bottom ten states in educational attainment – both for adults with bachelors and associates degrees – is unacceptable. We must explore all options to invest in making higher education more accessible and affordable for Hoosiers, whether young people fresh out of high school or incumbent workers seeking new skills. New revenues to meet these priorities could be available through private management of the Hoosier Lottery, proposed by Governor Daniels and recently endorsed by the Indiana Chamber of Commerce in its “Letters to our Leaders” agenda.

But the broader point is that every dollar spent on education must also be seen as an investment in economic development. It brings to mind the old saying – “If you think education is expensive, try ignorance.” Action that we don’t take now will prove far more costly in the future in lost business opportunities, jobs and income.

To view the past 6 months of archived Perspectives, select an article from the dropdown below and hit 'View':

To search the archive of Perspectives articles, go to the Search page