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Higher Education Leaders Discuss Costs, Job Market Demands

In a roomful of state education and business leaders that met at the Governor’s mansion this week, the discussion about higher education reform was nautical-themed.

Economists talked about Tennessee “treading water” while other states and countries zoom by with improving education. Gov. Bill Haslam referred to reforming higher education as an “everyone in the boat” process. One speaker said it would take “all hands on deck” to repair the gap between higher education and the workforce.

Tennessee’s higher education system, it would seem, is a sinking ship waiting to be saved.

According to the leaders gathered, the real question at hand is how to get post-secondary schools to crank out people ready for real-world jobs rather than the classroom. And also, how to get more people in those classrooms in the first place.

The problem is threefold, said Haslam. Jobs are scarce in Tennessee. Employers are increasingly demanding their employees be more skilled and better educated. And at the same time, the cost of post-secondary education is rising.

“The reality is that while costs continue to go up, we need more graduates—not less—in Tennessee, and those graduates need to be better prepared for the workforce than they are currently,” Haslam told reporters after hosting the higher education summit in Conservation Hall attached to the governor’s residence Tuesday.

This comes in the wake of hikes in tuition and fees at colleges across the state.

“We’re pricing a lot of middle class people, whose parents may be unemployed right now, out of the chance of going to college,” House Democratic Caucus Leader Mike Turner, D-Old Hickory, told reporters last week.

The risk, according to Haslam, is “that Tennessee doesn’t prepare the graduates that we need for the workforce and that all these businesses that we’re recruiting go somewhere else. It’s really that simple.”

On the flip side, he said, “If we give them the graduates and the workforce they need, I think they’re going to come here or stay here.”

Proposed solutions included better career advising, devising methods of measuring the outcome of higher education, and developing metrics for testing the quality of education that students get along the way.

The summit was inconclusive, introducing ideas about what to do but eliciting “no promises” from the governor, who will be holding roundtables with business leaders and college officials over the next six weeks to discuss what they want out of a trained workforce.

The governor invited members of the Tennessee Higher Education Commission, the Tennessee Independent Colleges and Universities Association, and officers of the Tennessee Business Roundtable and Tennessee Chamber of Commerce.

Also included on the invite were the speakers of the state House and Senate and the chairmen of the House and Senate finance and Education committees, positions all held by Republicans in the GOP-controlled Legislature.

Representative Craig Fitzhugh, D-Ripley, who was not present, said the governor’s selection process left Democrats out: “While I commend Governor Bill Haslam on beginning a review of higher education, I am disappointed that he has chosen to do so in a partisan manner. … House Democrats stand ready to have a serious discussion about higher education.”

Haslam defended his choice, saying “there’ll be plenty of time for legislative input. This wasn’t about that. This was about calling the three boards together.”

The governor said he doesn’t know if he’ll approach the General Assembly with a higher education package next spring or if his first wave of changes can be made administratively.

“My sense is that a lot more of this will be internal to the schools and the systems than it will be legislative. I wouldn’t be surprised, though, if we ended up with one or two structural issues that we bring to the (legislature),” he said.

As for reforming how the universities are governed, Tennessee isn’t ready for a complete overhaul, he said.

“I don’t think we’re ready to go there yet. I think governance is part of it, but I want to emphasize I don’t think that’s the root of the issue. The root of the issue is more around cost and access and quality, and governance structure is a piece of that,” Haslam said.

 

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Haslam Links South’s High Unemployment to College Graduation Rates

Tennessee may not sport the worst record in the country for high unemployment, but the Volunteer State and its neighbors make up a regional pocket where lots of people are having a hard time finding work.

Five of 10 states with the highest unemployment rates in the U.S. touch Tennessee’s borders. Of other nearby states, Virginia, home to many federal employees who work in and around the nation’s capital, is the only one among those states with the lowest jobless rates in the country.

Gov. Bill Haslam reasons that the high level of joblessness is related to low college graduation rates.

“If you look at this recession, it’s hit particularly hard on those folks with lower education attainment. Even in Tennessee, if you have a college degree, unemployment is 5 percent or less. If you don’t have a high school degree, it’s over 20,” he said, citing figures from the Bureau of Labor Statistics.

“I think if you compare college graduation rates across the country … by and large, graduation rates are lower in the South, and that’s been part of the issue.”

There’s some truth to that.

According to U.S. Census data, Tennessee and half of its neighboring states have both lower percentages of adults with post-secondary degrees and higher unemployment rates when compared to the nation’s average. Those states include Alabama, Georgia, Kentucky and Mississippi.

Arkansas and Missouri both have fewer adults with some sort of college diploma but their unemployment rate is lower than the U.S. average of 9.2 percent. North Carolina and Virginia have graduation rates that meet or exceed the country’s 34 percent average, although North Carolina still has a high percentage of jobless workers.

Haslam’s assessment was echoed one Tennessee economist.

“The skill issue is one that’s critical,” said Mhurat Arik, associate director of the Business and Economic Research Center at Middle Tennessee State University. “It may not be in the commonly used unemployment rate, but when you look at the broader picture … many don’t have the educational skill to perform in the current market.”

Add that to a lack of certainty among business owners in the economy’s recovery, and you have a recipe for persistently high unemployment in the South, Haslam said.

Tennessee’s June unemployment rate was 9.8 percent and has been gradually rising for three months.

In fact, Tennessee’s employment picture hasn’t been all that rosy for quite some time, going back well into former Democratic Gov. Phill Bredesen’s time at the helm.

Federal data suggests Tennessee lost 170,600 jobs in the last five years — more than most states in the nation, according to The Business Journals, a division of the American City Business Journals.

But that shouldn’t negatively reflect on Bredesen’s administration, Tennessee’s top Democrat in the state House of Representatives told TNReport this week.

“Those jobs lost are because these companies have exited us for this super-cheap labor,” said Rep. Craig Fitzhugh, D-Ripley. “We lost those manufacturing jobs, and we’re in that downturn of trying to replace those jobs with the new 21st-century jobs.”

Growth in white-collar jobs — which have helped drive down other states’ unemployment numbers — aren’t making making much of a dent in Tennessee’s joblessness rates, according to Chris Cunningham, a statistician for the U.S. Bureau of Labor Statistics.

Before the recession, Tennesseans held 333,700 jobs in industries like architecture, engineering and businesses that generally require higher levels of education. As of June, there were 26,000 fewer white-collar jobs, although that number is slowly shrinking.

Employment in the transportation industry is beginning to expand, but it’s still at pre-recession levels. Meanwhile, growth in manufacturing is stagnant as communities watch companies like Goodyear pack their bags and hit the road.

“Any growth that you’re having is not very strong. Until some of these larger sectors start to really take off, the unemployment rate is going to stay pretty high,” Cunningham said.

From May to June the total number of employed Tennesseans fell by 3,900 people, according to the state Department of Labor and Workforce Development. However, an additional 1,800 people joined the labor force.

Indeed, more people are moving to Tennessee or re-entering the labor force looking for work, said Arik. Those additions are creating a larger pool of workers seeking jobs, driving the rate up.

The state’s jobless rate hit 10.8 percent in the summer of 2009. Since then, it’s dipped as low at 9.4 percent last fall.

Nearby states are seeing much of the same trend, but states in the West and Midwest — like the Dakotas, Nebraska, Wyoming, Iowa, Kansas and Minnesota — all have relatively low unemployment rates.

Data courtesy of the U.S. Bureau of Labor Statistics and the U.S. Census Bureau.