Higher wages needed to reward better educated workforce

by Dr. Margaret Ellibee (mellibee@pulaskitech.edu) 290 views 

Arkansas is making positive strides to advance our citizens’ opportunities for a great education that transitions into a meaningful career – and those careers are right here at home.

There is a strong statewide focus by Chambers of Commerce, local governments and our state government to put Arkansas and its communities in the forefront of business recruiting both nationally and internationally.

The AR Futures program is a significant step taken by Gov. Asa Hutchinson and the legislature. The program positions Arkansans to receive a two-year degree in a “high demand” industry and to have the prospect of a free college education in exchange for residing in Arkansas for three years as an employee in that industrial field. Our fellow citizens who take advantage of this opportunity will gain a new chance to advance themselves and their families in ways that are not possible without that education.

For the state of Arkansas, the advantages are many: wages are higher for better-educated workers; the health of those employees is better; there is less employee turnover for the employer; and a more productive workforce emerges.

As chancellor for one of our state’s 22 two-year community and technical colleges, I and many of my colleagues – from education and business sectors – understand the need to supply an educated workforce for the continuing demand of our state’s various industries. This seminal work feels like a never-ending quest. Businesses need more skilled workers and at the same time the education system is always striving to get enough students into the career pipeline. When we look at the situation in context with low unemployment and a state median household income of $41,995 (US figure is $55,775) that hasn’t moved forward in 10 years, and the perception by many that numerous manufacturing jobs are “less than,” we see that circumstances have conspired to stagnate the flow of educated, well-trained Arkansans into high demand, potentially career-advancing jobs.

So, what can we – as a state – do to “prime the prosperity pump” and really make some gains to satisfy these challenges?

Many states, as well as other world nations, have had similar challenges. They have looked to a variety of innovative strategies to advance education, address industry demand, increase productivity and move wages upward. With AR Futures and our state’s community and technical colleges, we have a quality “priming” mechanism to the “prosperity pump.” But, what else can be considered?

According to the Aspen Institute (2016), Wisconsin’s Fast Forward Initiative includes government grants to employers who agree to provide six months of coordinated training. And, Apprenticeship Carolina gives employers a $1,000 tax credit for every worker hired as a registered apprentice, and workers can receive up to two years of community college training.

Across the globe, various countries employ tax incentives in the form of allowances or credits to industries to help “prime the pump.” These policy strategies generate both enhanced education and compensation differentials that reward continuing education with wage growth. As a result, a larger pool of trained workers is available for employers, and students/employees accessing these education/training opportunities are more focused and productive. Ultimately, with that positive productivity comes the pathway that enables trained individuals to continue to move into advanced job opportunities (with increased wages) with even more available education.

In “What Works in State Economic Development?” (2009), the author, Timothy Bartik, senior economist at W.E. Upjohn Institute for Employment Research, suggested this: “Additional higher-skilled labor attracts employers with more skilled jobs. So it is posited that if you educate them [our Arkansas citizens], jobs will come. On the flip side then, strategies to increase the demand and wages for skilled workers may also be needed.”

Let’s think about that suggestion. The future is today. Models of success are available. Arkansas’ academic, governmental and private sectors – as fully engaged partners – have key responsibilities in this idea. Let us “prime the prosperity pump,” not only to build prosperity for our industries, but also to simultaneously grow the prosperity for our citizen’s education, training and wage potential.

It will be another significant “win” for Arkansas.
Editor’s note: Dr. Margaret Ellibee is the chancellor of the University of Arkansas Pulaski Technical College. The opinions expressed are those of the author.