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POLICY ALERT

POLICY ALERT. Workforce Income Projections & Education Levels 2005 - 2020. INCOME OF U.S. WORKFORCE PROJECTED TO DECLINE. IF CURRENT TRENDS CONTINUE: The proportion of workers with high school diplomas and college degrees is decreasing

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POLICY ALERT

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  1. POLICY ALERT Workforce Income Projections & Education Levels 2005 - 2020

  2. INCOME OF U.S. WORKFORCEPROJECTED TO DECLINE IF CURRENT TRENDS CONTINUE: • The proportion of workers with high school diplomas and college degrees is decreasing • The personal income of Americans will decline over the next 15 years.

  3. Changing Numbers • There will be substantial increases in those segments of America’s young population with the lowest level of education • The coming retirement of the baby boomers—the most highly educated generation in U.S. history—are projected to lead to a drop in the average level of education of the U.S. workforce over the next 15 years.

  4. Additional Factors • The projected decline in educational levels coincides with the growth of a knowledge-based economy that requires most workers to have higher levels of education. • At the same time, the expansion of a global economy allows industry increased flexibility in hiring workers overseas. • As other developed nations continue to improve the education of their workforces, the United States and its workers will increasingly find themselves at a competitive disadvantage

  5. Impact on Our Nation • The drop in the average level of education of U.S. workers will depress personal income levels for Americans • This will create a corresponding decrease in our nation’s tax base

  6. Changing Demographics • The U.S. workforce (generally ages 25 to 64) is in the midst of a sweeping demographic transformation • From 1980 to 2020, the White working-age population is projected to decline from 82% to 63% • During the same period, the minority portion of the workforce is projected to double (from 18% to 37%), and the Hispanic/Latino portion is projected to almost triple (from 6% to 17%).

  7. White Workforce Population (25 – 64) vs. Minority Workforce Population

  8. Primary Causes These demographic shifts can be traced to two primary causes: • Larger numbers of younger Americans (ages 0 to 44) are ethnic minorities • Increasing numbers of white workers are reaching retirement age • Over the next 15 years, the largest increase in the younger U.S. population is projected to be Hispanic/Latino

  9. The Greatest Increase in US Population Growth from Ages 0-40 will be Minority Groups

  10. Impact of Changing Demographics • The younger population—including those most likely to be in school, college, or professional training—is growing ever more racially diverse. • Meanwhile, the largest portion of the white population is aging. • The number of Whites is projected to decline in all age groups younger than 45 over the next 15 years • The only age level in which whites will outpace minorities in population growth is among those reaching retirement: ages 65 and older.

  11. Educational Levels of Minority Groups • The greatest increase in population growth in the U.S. workforce is occurring among those racial/ethnic groups with the lowest level of education. • The group reaching retirement age is predominantly White with higher levels of education. • In 2000, Whites ages 25 to 64 were twice as likely as African-Americans to have a bachelor's degree, and almost three times as likely as Hispanics/Latinos.

  12. Working Age Population (ages 25-64)with a Bachelor’s Degree or Higher

  13. Widening Gaps • The gaps among racial/ethnic groups in levels of education completed are widening. • Of the working-age population, from 1980 to 2000 Whites and Asian-Americans made the most progress in attaining a bachelor's degree or higher. • African-Americans, Native Americans, and Hispanics/Latinos made the least progress

  14. Gap Percentages • The educational gap between Whites and Hispanics/Latinos (as measured by the percentage of the working-age population with a bachelor's degree or higher) has almost doubled over the last two decades—growing from 12 percentage points in 1980 to 19 percentage points in 2000. • The gap between Whites & African-Americans has expanded from 11 percentage points in 1980 to 15 percentage points in 2000.

  15. Performance Measures • An important measure of the educational performance of segments of the population is their level of success in progressing from high school to a college degree • About 50% of African-American and Hispanic/Latino 9th graders do not become eligible to enter college after four years of high school because they have not completed high school.

  16. US Educational Pipeline (Percentage)

  17. Educational Levels: Impact Effects • Given the current gaps in educational levels in the United States, projected changes in the population by race/ethnicity from 2000 to 2020 are likely to lead to a substantial increase in the percentage of the workforce with less than a high school diploma • Similar educational declines are projected for the workforce at each educational level from the high school diploma to a graduate degree

  18. Declines in Workforce Educational Levels

  19. The High School Diploma • The most telling indicators of college preparation are generally said to be standardized test scores, rigorous course-taking, and dual enrollment—all of which are important— • However, the single largest barrier to college entrance for African-Americans and Hispanics/Latinos is high school completion.

  20. The Global Economy • These disparities in levels of educational success are particularly important when considering America’s need to compete in the global marketplace. • Although educational levels have been increasing in the United States over the past two decades, they have not kept pace with similar rates in other countries. • As a result, the young population in the United States is not as well-positioned as its counterparts in several other nations to compete for high-skilled jobs

  21. US and Canadian Comparisons • Canada leads in the percentage of its young working age population (ages 25 to 34) with an associate’s degree or higher. • In the United States, Asian- Americans/Pacific Islanders are the only group that exceeds the educational level of Canada’s young adults, with whites falling substantially below. • African-Americans, Hispanics/Latinos, and Native Americans in the United States are struggling to compete at all.

  22. Impact of Changing Demographics • The current educational disparities among racial/ethnic groups are projected to lead to a decline in the educational level of the U.S. workforce as a whole. • This drop in the levels of education completed will result in a decrease in personal income per capita among Americans

  23. Three Projection Scenarios Based on Educational Disparities • Projection 1: Current educational gaps remain (but they do not continue to widen) • Projection 2: Parity between minorities and whites within each state • Projection 3: Parity across the U.Sfor minorities and whites

  24. Impact on Personal Income • Under Projection 1, if the educational gaps remain as they are, then the average personal income per capita in the US is projected to decline from $21,591 in 2000 to $21,196 in 2020 – a drop of $395 or 2%. • Under Projection 1, over one-third of the states would experience a decline in personal income per capita, including many currently with the highest levels, such as California, Colorado, Connecticut, Massachusetts, and New York. • In these states, the decrease in income would be much more substantial than the U.S. average and could significantly affect their tax bases. • For example, the projected decline in personal income per capita from 2000 to 2020 in Colorado would be $662, in New York $1,182, and in California $2,475

  25. Projections 2 and 3 Impact on Personal Income • In contrast, if states are able to close the educational gaps between whites and racial/ethnic minorities, then personal income per capita is projected to increase in the United States • In terms of total personal income across the United States, Projection 2 represents an increase of $298 billion over Projection 1 (status quo), and Projection 3 represents a gain of $425 billion over Projection 1.

  26. Comparison of Projections on Personal Income

  27. How Do We Solve the Problem? • Education is the most effective intervention for improving our social and economic future—for individuals, communities, states, and the country as a whole. • Given the changing nature of the global marketplace, the high school diploma is no longer sufficient for individuals seeking good jobs, nor for communities building a vibrant economy.

  28. Post-Secondary Education Addressing inequalities in higher education opportunities will require persistent and meaningful efforts by states in order to put in place the policies and resources to advance the education of all their residents.

  29. The Educational Pipeline:Big Investment, Big Returns • Many states are now focusing on improving their "K-16" policies-those local and statewide policies that seek to bolster student success at key transitions from high school into college, and from college admission to completion of a degree. • This new trend is an effort to create a stronger "educational pipeline," a productive, integrated system of high schools, colleges and universities within each state.

  30. Educational Capital • The educational pipeline is being viewed as the key avenue to increasing a state's "educational capital." • This is the number of highly knowledgeable, skilled people in a state's workforce. • Educational capital has a direct impact on a state's economy and quality of life. • With this increased awareness, state leaders are renewing their interest in helping students gain college degrees.

  31. BENEFITS Encouraging a college-educated population in the workforce results in pivotal benefits to the state: • Individuals with higher degrees can expect to earn higher incomes. The result: more tax revenue and economic activity for the state. • An educated, skilled population makes fewer demands on social services such as welfare and corrections. The result: less expense to the state. • People with more education make more informed health and lifestyle choices. The result: state savings in public resources. • Educated individuals are more comfortable handling decisions about health care, personal finance, and retirement. The result: less government responsibility in those areas.

  32. The Goal: Increase Educational Capital State policymakers can use three primary methods to increase educational capital: • Create a high-quality K-16 system for bringing students to a college degree. This is the most direct and reliable way of increasing educational capital. • Develop and maintain an economy to employ the state's educated residents. • Attract educated workers from outside the state by creating an appealing state economy and quality of life.

  33. Entry into Higher Education • The number of high school graduates who enter college depends on student preparation levels and the capacity of the college and university system. • Improving these factors is within the reach of state policies.

  34. Completing Higher Education • Holding a college degree generally increases an individual's income level. • Still, less than 50 percent of first-time, full-time college students complete an associate's degree within 3 years or a bachelor's degree within 6 years at their original institution (the 150% standard).

  35. NC’s Higher Education Statistics

  36. NC’s HS Grad Success Rate Per 100 9th Graders Rank = 43rd out of 50 states Percentage Graduated = 60%

  37. NC Percentage of Students Immediately Entering College After HS Rank = 22nd out of 50 states Percentage = 41%

  38. NC Percentage Graduating Within the 150% Time Period* Rank = 22nd out of 50 states Percentage = 19%

  39. Five Southern States Lead the Nation in HS Drop Outs • Georgia • Texas • Florida • North Carolina • South Carolina

  40. The HS Graduation Gap • One in five high schools in the U.S. have unacceptably low graduation rates and high dropout rates. • The number of high schools with low graduation rates and high dropout rates grew substantially during the 1990s. • The gap between high schools with the lowest graduation rates and the national norm is a striking 40 to 60 percentage points. • High schools with low graduation rates and high dropout rates have an overwhelmingly large number of minority students (a majority of minority students). • A predominately “minority” high school is five times more likely to have low graduation rates and high dropout rates when compared to a “majority” white school.

  41. HS Grad Rates: The Demographics • 50% of the nation’s African American students attend high schools in which graduation is not the norm • 40% of Hispanic/Latino students attend high schools in which graduation is not the norm • Only 11% of White students attend high schools in which graduation is not the norm.

  42. 3 Recommendations for Improving Educational Capital • Increase the Number of HS Graduates • Improve College Access • Promote Graduation from College

  43. Increase the Number of HS Graduates • Develop strategies to improve basic skills • Involve parents, business leaders, and the community in the educational process • Ensure sufficient financial support of low-income districts

  44. Improve College Access • Create college tuition policies based on median income and support need-based financial aid. • Build high-capacity, open-entry, two-year college systems that encourage transfer. • Encourage dual enrollment and advanced placement policies that speed the transition from high school to college.

  45. Promote Graduation from College • Set up programs for individual learners • Support intensive enrollment in basic coursework in the first college year • Develop schedules based on students' needs • Avoid pushing students toward a high education debt • Establish transfer policies that retain academic credit

  46. The HS Diploma • The most significant barrier to higher education for minority students in NC • The high school dropout for minorities is significantly higher than for white students

  47. References: • Ewell, P.T., Jones, D. & Kelly, P.J. (2007). Conceptualizing and researching the educational pipeline. The National Center for Public Policy in Higher Education. Retrieved September 16, 2008 from http://higheredinfo.org/analyses/Pipeline%20Article.pdf. • The National Center for Public Policy and Higher Education. (2008). Policy alert: Is the college opportunity slipping away? Retrieved September 16, 2008 from http://www.highereducation.org/pa_college_opp/ • NC Department of Public Instruction (2008). First four-year cohort graduation rates. Retrieved September 16, 2008 from http://www.dpi.state.nc.us/newsroom.news/2006-07/20070228-01

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