Community Colleges Assist in Economic Recovery

Column by Debbie Evercloud

By Dr. Debbie Evercloud
Posted

As the U.S. economy is poised to begin a fourth year of what has politely been termed "a recovery," there are ample signs indicating that growth will remain sluggish and that any expansion of employment in the near-term future will be very gradual. With Colorado's employment projected to grow at an annual rate of around 1 percent for the remainder of this year, many of those looking for jobs today will still be looking as 2011 comes to a close. The consensus forecast is not as encouraging as we might hope. It will be some time before Rosy Scenario steps up to the podium to give the press briefing the next time monthly employment figures are released.

In a high-profile speech at a symposium in Jackson Hole, Wyo., this August, Federal Reserve chairman Ben Bernanke characterized the U.S. economy as "suffering today from an extraordinarily high level of long-term unemployment, with nearly half of the unemployed having been out of work for more than six months."¹ Among policy makers, there is increasing concern about a potential "lost decade" ahead for the U.S., in which chronic unemployment will be an enduring hindrance to growth.

In looking honestly at this situation, it is also useful to consult the record of history for some hints as to what job growth looks like coming out of a recession. It is clear from the track record of the past century that jobs lost at the start of a recession typically do not come back ... ever. Emerging from a recession, there is employment growth, of course. But it is invariably in new industries, using new skills, applied to new technologies. In the Great Depression, the agricultural sector was devastated by farm foreclosures, declining prices for agricultural products, and unavailability of credit. But even as the U.S. emerged strong enough from World War II to be the world's leading economy, those farm sector jobs never returned. The manual labor that had been done on farms was replaced by automation that swept in on the 1940's wave of innovation. This same wave of innovation created the jobs that did account for employment growth following the war: high-value manufacturing, telecommunications, labor-saving home appliances, and eventually, computers. But agricultural employment itself dropped permanently.

Most likely, the job growth that will gradually strengthen throughout this prolonged recovery will follow a similar pattern. It will blaze new territory rather than re-trace steps back to where the economy was in 2008. In one sense, this is exciting, because in the process we will find ways to address material needs that are currently not being met. But it is also a daunting prospect, because it prompts a question: How will workers acquire the skills needed for these new industries and new occupations? Although the complex answer to this question will unfold with the very process of the recovery itself, part of the answer is already known: Community colleges.

The 13 campuses of Colorado's Community College System provide education and training for more than 115,000 students annually. While not as visible as the state's high-profile research universities, these community colleges play a vital role in preparing students for a labor market that demands relevant, finely-tuned skills. A 2010 report by Federal Reserve economists Alison Felix and Adam Pope evaluated the contributions of community colleges to the modern-day workforce.² They find that community colleges are particularly flexible with regard to the needs of employers, often designing customized courses in collaboration with corporate partners.

Nationwide, about one-third of students enrolled in post-secondary institutions attend two-year colleges. This means that community colleges make a significant contribution to the education industry. It is also the case that students educated at community colleges are more likely to stay in the local area than are graduates of 4-year universities, thereby contributing to the tax base with incomes earned following completion of their classroom studies. Many students pursuing associate's degrees have already been in the work force for awhile, and are returning to acquire certifications needed for a new career. With their focus on skills of relevance, community colleges are particularly well-equipped to provide the training that employers value in their new hires.

According to Felix and Pope, it is expected that the rate of growth in employment for community college graduates will exceed the rate of labor force growth overall for the next ten years. In Colorado specifically, the strongest area of employment growth for associate's degree graduates will be in health care. But growth in the leisure and hospitality industry will add many job opportunities as well for workers with a community college diploma. As long unemployment rates remain elevated, community colleges will continue to experience high enrollments that must be accommodated with limited funding.

There is still much ground to cover before we will see signs of a truly healthy economy. Throughout this fall season, there will be downturns in the stock market, news of nervous markets overseas, and plenty of foreclosure notices in the Denver area papers. Yet in looking forward to a more prosperous time in the future, we can keep in mind that community colleges are hastening the day when Rosy Scenario will deliver the latest news, and we will all have reason to applaud.

1 "The Near- and Longer-Term Prospects for the U.S. Economy," address by Ben Bernanke to the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming, August 26, 2011. Full text available: http://www.federalreserve.gov/newsevents/speech/bernanke20110826a.htm

2 "The Importance of Community Colleges to the Tenth District Economy," by Alison Felix and Adam Pope, Economic Review, Federal Reserve Bank of Kansas City, Third Quarter 2010. Full text available: http://www.kc.frb.org/publicat/econrev/pdf/10q3Felix_Pope.pdf