The Case for State Investment in Higher Education

When you try to make “the economic development case for higher education,” it’s pretty easy. I’m not just talking about the huge economic impact of higher education institutions like the University of Washington. I’m talking about how important it is to the economy for people to get higher education. The Seattle Times put it pretty well yesterday: “More skills or less pay.”

The funny thing is that, while the above argument is easy to make, there’s a related one that’s not so easy: “the economic development case for state investment in higher education.”

The thing is that Washington state is really good at attracting highly educated people, which is clearly great for the local companies that get to hire them. But it’s also really great for state government, because they’re getting way more smart people than they’re paying for. Think about it: if Washington state had to rely only on locals to fill all the jobs of our economy, one of two things would have to happen: 1) the state would have to pay for a ton more people to be educated, or 2) local companies wouldn’t be able to fill their jobs and would either be less successful or leave. In the former case, they’d have to make hard choices about cutting other things or raising new revenues; in the latter case, the business community would suffer.  Neither is a good option.

Now, luckily, we don’t have to rely on just the people we educate, because we’ve got great companies to work for and a fantastic quality of life – two factors that help us recruit and retain the best and the brightest from around the world. Which is negative reinforcement to the state legislature: “Oh, you mean we can pay even less to educate kids and still get the super smart people we need for our knowledge economy? Sweet! Let’s cut even more!”

Which gets me back to my point: how do you effectively respond to this argument? I’ve got a couple options:

1) Yeah, the best and the brightest are coming now, but what happens when things shift and they start preferring Boise or Austin or Bangalore or Ibiza?  Then we really will have to start educating smart folks, and we’ll be way behind after years of disinvestment. We need to keep investing now so that we’re not just caught off-balance when there’s a change in the whims of highly educated 20-year olds.

2) Yeah, the best and the brightest are coming now, and they’re getting the good jobs. Don’t you have an obligation to your constituents and their children to help local kids gain the skills they need to get local jobs?  Or do you want kids who grow up here to have to choose between getting low paying jobs or going somewhere else for their education?  And by the way, we can’t rely on sending them elsewhere for their education, getting some other state to pay for it and then getting them back; 70% of students who go to college in another state don’t come back to their home state.

3) Yeah, the best and the brightest are coming now, but we still have a huge gap between the number of jobs in this state that require higher education (specifically STEM degrees) and the number of people that have them.  We can’t just rely on a significant increase in the in-migration numbers; the only thing we have control over is investing in our own students to grow the talent to fill those gaps.  Otherwise, those companies located here are going to get fed up about not having the talent they need and leave…or else just stagnate because of lack of human capital.

4) Yeah, we’re in a recession and the state needs to balance its budget, but investment in higher education pays a huge dividend in both the short term and the long term. If you’re looking to use limited funds in strategic ways that leverage returns on investment, this is the place to put your money.

Any of those resonate with y’all?  Or are there others that I’m missing. Again, it has to be that nuanced argument, not about how important higher education is, but why our state now needs to continue to invest in higher education. Suggestions welcome!

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