Why spend so much time on Mississippi? Because Michigan needs to get on a new path. And one of the ways of identifying that path is to look at states that are doing well now and/or positioned to do well in the future.
So if per capita income growth rates are a good predictor of future prosperity – as many argue – we would need to consider those states as possible models for Michigan. Mississippi is one of those states with good income growth over the past two decades. But as we have seen in my three previous posts on Mississippi it turns out not to be a good predictor at all.
So if growth rates –even over as long a period as 1990-2008 – aren’t a very good predictor of future prosperity, what is? Our analysis is that its human capital. Its the best explanation of current income differences between states and we believe is likely to grow in importance as the economy becomes increasingly knowedge-based.
Job growth and good paying jobs are concentrating in those industries with the highest proportion of workers having a four-year degree or more. These high education industries are concentrating in those regions/states with the greatest concentrations of talent. Its why of the top ten states in college attainment, nine are in the top twelve in per capita income. So Michigan’s fundamental challenge is that we are thirty fourth in college attainment.
As we demonstrated in our latest posts its a state like Minnesota that is the model for Michigan to return to high prosperity. Minnesota is not only much more prosperous than Mississippi today but is much better positioned to be prosperous in the future because they are tenth in college attainment. The bottom line remains: either Michigan gets younger and better educated, or we will get poorer!
This Post Has 3 Comments
Has there been any study on how having a high percentage of educated professional young people impacts the less educated people in a state? My observation is that a lot of folks in Michigan are just not going to make it through college. I am semi-retired teaching college part time, and see students struggling to make it. Hopefully the ones who do succeed will attract businesses to this area that may even create lesser paying secondary jobs not requiring as much education. Knoledge-based industries tend to require a lot support services which will create opportunities, not only for the educated workers, but also for the less-skilled as well.
In each of our annual progress reports (new report out in May) we provide data for both states and metro areas on the proportion of households with incomes of $75,000 or more and less than $25,000. As you would expect, places with the largest concentration of knowledge-based enterprises have the highest proportion of households with incomes of $75,000 or more. And they also have the smallest percentage of households with incomes of less than $25,000. So being part of the growing and higher wage part of the American economy does lift incomes for more than just those who are college educated. As I often say you would rather wait tables in Manhattan than Ishpeming. Because of the affluence in places like Manhattan all sorts of service jobs pay more.
I’m a career changer that entered college late at almost 31 years old. I managed to earn 4 associate degrees at one of our state community colleges and a bachelors degree at one of our state universities. Before I started college I had a low skilled dead end job making 30K a year plus benefits. Now I making 25K with no benefits and this is with almost 4 years experience doing skilled work in my field. Thank goodness my parents helped me pay for school or else I would have to default on student loans. We have several great colleges here to choose from, but no money to pay to go to them, and no jobs waiting for us when we finish. Where is the incentive?
Comments are closed.