Editorial

Educational achievement key in talent shortage problem

February 17, 2017
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Grand Rapids employers universally are impacted by the talent shortage and identify the issue as the top concern in moving their businesses forward or expanding. The comparatively low wage levels paid in the greater Grand Rapids area do not salve the wound of job openings in the nationally competitive fight for talent and recruitment or provide promise for the longevity of regional economic improvement.

The Grand Rapids region and state of Michigan have put emphasis on skilled trade training and community college educations, but Business Journal reporting on the local numbers of earnings by millennials is revealing for the dismal facts of median earning, even for those with college degrees. Millennial women earn even less than their male counterparts, according to a study by the Institute for Women’s Policy Research reported by Business Insider. The Michigan numbers from that study are among the worst in the nation.

Lou Glazer, president of nonprofit think tank Michigan Future Inc., told the Business Journal he often hears employers, parents and politicians opine high school graduates can make higher wages by pursuing two-year degrees or occupational certificates, but actual wage tax filings and financial aid statements do not support those opinions.

Glazer points to a study released last month showing four-year institutions across the nation are helping propel students into upward mobility more than their two-year and for-profit counterparts.

The Equality of Opportunity Project, led by Stanford economist Raj Chetty, used tax filings and financial aid statements of millions of post-college students to create college-by-college and university-by-university report cards on income mobility and median wage rankings. Glazer told the Business Journal, “If you look at the facts, no matter what the framing or the story is, students who attend four-year universities are earning a lot more at 34 than those who go to two-year colleges or for-profit colleges or universities.”

The Business Insider report ranked Michigan 37th among all states, showing millennial wages at $34,000 for men and $29,019 for women. Another interesting note from the study: only women in New York, who are one-third more likely to have a university degree than men, made more than men ($1,000).

A Forbes/Payscale study reported by the Business Journal placed Grand Rapids among the worst regions for worker compensation among the 100 largest metro areas in the U.S., and like every other metropolitan community in the country, pay rates are flat — not up — for employees who hold at least a bachelor’s degree. The compensation report measured not just early career pay but mid-career and median pay for those holding at least a bachelor’s degree. Add to that dismal — though likely unsurprising — report the fact the Grand Rapids region continues to show much lower education rates than other regions, even in comparison to other Michigan cities, such as Detroit and Ann Arbor.

Glazer opines another point that, while hopefully untrue, bears consideration. He said there is belief employers are doing what is called rent seeking: trying to use their political power to get government to push kids into jobs with wages below what the market demands rather than raising wages.

The West Michigan region economic prosperity and local economy are especially vulnerable in any economic downturn. Educational achievement and wages are key to that success.

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