Remarks by Jamie P. Merisotis, President/CEO, Lumina Foundation
City Club of Cleveland, Cleveland, Ohio
Thank you, and good afternoon. I’m pleased to be with you today, and I’m truly honored to be included among the remarkable individuals who have addressed this forum over the years. It’s humbling to consider the combined wisdom in a group that includes everyone from William Jennings Bryan and Marian Wright Edelman to Ronald Reagan and César Chávez. Clearly, this venue has been a beacon of learning for many decades … and that’s another reason I’m pleased to join you. After all, I am here to talk about learning—specifically, about college-level learning and its importance to the economy and to America’s future.
A college education—and when I say “college” I mean all types of post-high school education—has always been valuable, of course. It’s added immeasurably to my own life—so much so that I’ve made it my life’s work to advocate for the enormous benefits of postsecondary education … to make college more accessible for all Americans and to help ensure that many more students stay in school and earn their degrees.
The thing is, after two decades in this work, I’m more convinced than ever in the power of higher education. In fact, it’s clear today that college attainment is longer merely beneficial; it is vital— to individual success, and to the future of our nation as a whole.
Over the last few weeks, we’ve seen unprecedented attention to the issues of college affordability and rising student debt. As a result, we’ve also heard a lot about the value of a college education, especially in these economically turbulent times, as well as the quality of the credentials that we are awarding at our colleges and universities. In my brief time today, I hope to underscore why a postsecondary degree or credential really is more important now than it ever has been before, and how you can play a part in the critical national imperative of achieving much higher levels of high-quality educational attainment for the vast majority of Americans.
To give you some sense of where I’m coming from, it might be helpful to tell you a bit more about me, and about the organization I represent. I grew up in a family of limited means, and am proud to call myself a first-generation college graduate. I was fortunate to have parents who pushed me and my siblings to achieve more educationally, even though they never had those opportunities. I also benefited greatly from the support of the federal government, my local community, my church, my alma mater Bates College, and many others. I’ve called myself a walking advertisement for virtually every form of financial aid that was available when I attended college, from Pell Grants to student loans to a whole lot of work.
My experience is not atypical. There are many Americans like me. But more importantly, there are many millions more who need the opportunities that I was fortunate enough to have. And that’s where an organization like Lumina Foundation comes in.
Based in Indianapolis, Lumina Foundation is a national foundation that plays an unusual role as one of the nation’s largest private foundations. We are committed to one cause: enrolling and graduating more students from college—especially low-income students, students of color, first-generation students and adult learners. In fact, we are the largest private endowment in America that focuses exclusively on that mission. And we pursue our mission in a very targeted way. All of our energy and resources are focused not on individual achievement through scholarships or other support, but on system-level change that can lead to large-scale impact. Lumina’s work is entirely focused on achieving one ambitious but specific goal for college attainment. We call it “Goal 2025” or simply, the Big Goal.
Our Big Goal is this: By the year 2025, we want 60 percent of Americans to hold high-quality degrees and credentials beyond high school.
Today the national degree-attainment rate is a shade above 38 percent. Actually, it’s hovered just below 40 percent for much of the last four decades—and that level of college attainment hasn’t really hampered us until recently. In fact, a decade or so ago, the U.S. led the world in educational attainment. No longer. College-attainment rates are soaring among young adults in many other nations, while our rate remains essentially flat. Figures released over a year ago put us in eighth place. And now, according to the latest figures, we’ve slipped to 15th in the proportion of 25- to 34-year-olds who have obtained a two- or four-year degree. Clearly, in an age where economies and labor markets are increasingly global, this downward trend is more than merely troubling. It’s a serious and urgent problem … perhaps the most serious problem we face as a nation.
Today, and certainly in years to come, workers without college-level learning simply won’t have the knowledge and skills they need to succeed. In fact, the Georgetown University Center on Education and the Workforce has estimated that by 2018, 63 percent of all of the nation’s jobs will require some form of postsecondary education or training. That’s a huge increase since the mid-’70s, when less than 30 percent of jobs required any education beyond high school. The ramifications are clear and sobering: If we fail to address this massive shift—if we fail to adequately prepare our citizens to compete in the modern global economy—those citizens, and our nation, will fall behind.
According to 2010 Census figures, just 38.3% of working-age Americans—those between 25 and 64 years old—hold at least an associate degree. The attainment rate has increased a bit, up from 37.9% in 2008 and 38.1% in 2009. But obviously, progress has been painfully slow—well below the level that will get us to 60% by 2025. In fact, at our current rate of degree production, the national attainment rate will reach only 47% by 2025. That gap of 13 percentage points represents more than 23 million people … 23 million degree-holding workers that our economy and society desperately need, but simply won’t have unless we find ways to increase college access and success.
Almost a million Ohioans who will lack the education and training they’ll need to be competitive in the labor market
Let’s put the issue into a more local context. Here in Cleveland, college-attainment rates are right in line with the national average: Only 38.6 percent of working-age residents have at least a two-year degree. Not exactly encouraging. And yet the statewide college-attainment picture is even darker, because Ohio is consistently running 3 percentage points behind the national trend. In 2010, the state’s degree-attainment rate was less than 36 percent, and it’s on track to reach only 44 percent by 2025. That rate translates into a shortfall of more than 900,000 degree-holding citizens … almost a million Ohioans who will lack the education and training they’ll need to be competitive in the labor market.
And make no mistake: Ohio’s labor market is increasingly demanding. Labor experts predict that, by 2018, 57 percent of jobs in this state will require some level of postsecondary education. In the next six years Ohio will need to fill 1.7 million vacancies resulting from job creation, worker retirements and other factors. Of these expected vacancies, well over half will require postsecondary credentials.
Now I know what some of you may be thinking right about now. “What is this guy talking about? Hasn’t he been reading the newspaper? Jobs for recent graduates are in short supply, and opportunities are more limited than they have been for many years.”
Among 18- to 24-year olds who have only a high school credential, the jobless rate is a whopping 22.9%
Well, let’s talk about that. Here are some things we know. First, the unemployment rates for those with college degrees are considerably lower than for those who lack postsecondary credentials. This is true even for recent college graduates. According to data from late 2011, national unemployment rates for 18- to 24-year olds (not enrolled in school) are about 8.9% for bachelor’s degree recipients and 11.9% for those with associate degrees. For those in that age group who have only a high school credential, the jobless rate is a whopping 22.9%.
We also know that wage differentials for people with college degrees compared to those with high school credentials are wide. That’s a fact that we’ve understood for many years—if you go to college, you make more money. What is less recognized is that the wage differential is actually growing. Individuals with a bachelor’s degree make an average of 84% more over their lifetimes than those with just a high school diploma. This is an increase even since the late 1990s, when the wage premium was about 75%. This increasing wage gap shows that the labor market is hungry for college graduates. Even in this job market, employers are willing to pay an increasing premium for college graduates.
Median salaries for 2012 graduates are up 4.5%, well above inflation and other key cost of living indicators
Median salaries for 2012 graduates are up a healthy 4.5%, according to the National Association of Colleges and Employers, well above inflation and other key cost of living indicators. Starting salaries in some of the fastest-growing industries, like business, computer science, engineering, and health sciences, range from the mid-40s to the high-50s.
Let’s look at the picture in still another way. Data from the Georgetown University Center on Education and the Workforce show just how important postsecondary education should be to job-seekers. On average, in industries that are growing the fastest—healthcare and various service industries—about seven in ten workers have at least some college. On the other side of the ledger—the industries that are declining in terms of their relative share of jobs, only four in ten workers have attended college.
So the message is clear: In the coming years, fewer and fewer jobs will be available to those who lack postsecondary education, with the best-paying jobs going going to people with college degrees, especially in high-demand fields.
So does this mean that every person who graduates from a college or university is going to get a good job and lead a middle class life? No. The point is, in this environment, a college degree is a prerequisite. There’s no guarantee that a student who obtains a college degree is going to get a good job and have a middle-class life. But in the future, you almost certainly will be poor without some kind of postsecondary credential.
But even this doesn’t tell the whole story. The seismic shift that is under way is not just a shift from low-skill occupations to high-skill occupations. It’s that almost all jobs are becoming higher-skill jobs.
Even in some so-called declining industries, the need for college-educated workers is becoming acute as jobs become more complex. Jobs in manufacturing, in mining—really, in nearly any practical field you can name, from auto repair to X-ray technology—now require some level of postsecondary education. What’s more, all jobs increasingly demand the “soft skills” that higher-level learning provides … the critical thinking and analytical skills that make workers more adaptable in an ever-changing workplace.
And here’s one more compelling truth about the benefits of boosting college attainment: It’s not just a way to prevent job loss; it’s actually a proven means to stimulate job creation. Economists tell us that much of the nation’s economic growth over the last half-century is largely attributable to two things: technology and increased educational attainment. Why are these two so important? Because they increase productivity, and productivity growth is the engine that drives all advanced economies.
With a more highly educated workforce, employers been shown to organize the work in more efficient and productive ways
When employers have a more highly educated workforce, they’ve actually been shown to organize the work in more efficient and productive ways. They have learned through experience that hiring better-educated workers increases productivity and enhances workplace creativity. This, in turn, helps fuel the innovation that leads to new products and services, new markets … and new jobs to serve those markets.
The key to the nation’s long-term economic success is a 21st century labor force, one with adaptable workers who possess high-level skills and relevant knowledge. And those skills … that type of knowledge … can only be offered in well-designed and rigorous postsecondary programs. That’s why Goal 2025 is all about ensuring that many more students enroll in and complete such programs. It’s all about the learning.
Of course, the benefits of higher education aren’t limited to individuals, and they extend well beyond economics and labor markets. The broader societal benefits of a well-educated population are enormous: lower crime rates, less reliance on public assistance, better health, increased levels of civic involvement. And, as Americans, we all recognize equity of educational opportunity as a shared value. Every person, regardless of finances or family circumstances, deserves the chance to succeed and contribute to our collective well-being. Like nothing else, higher education offers that opportunity.
For all of these reasons, then, Lumina is committed to the Big Goal. As I said earlier, everything we do as an organization is aimed at achieving Goal 2025. The grants we provide to support research and effective practice in higher education … our communications and convening efforts … and, increasingly, our work in public policy—all of this has a singular focus: to boost the proportion of Americans who hold high-quality degrees and credentials to 60 percent by 2025.
We know it’s an ambitious goal. In fact, we know it can’t be reached without the concerted and cooperative effort of stakeholders from every arena, including K-12 and higher education, government, labor, business and economic development. In fact, one of the specific lessons we at Lumina have learned most recently is that we must make the employer community an increasingly important partner in the drive to improve college attainment. My appearance here today is very much a part of that ongoing effort to reach out to the business community.
Over the years, in part because it has its roots in postsecondary education arena, Lumina has enjoyed good relationships with the “supply side” of higher ed—that is, with institutions and systems, and with the policymakers who shape the environment in which those schools and systems operate. Clearly, we value those relationships, and we work hard to maintain and strengthen them.
But we’re increasingly interested in involving individuals and organizations on the “demand side.” This includes students, to be sure, but also employers, workforce-development officials and other members of the business community. It’s clear that, as a nation, we need to tighten the connection between college success and economic success … and that connection must be tightened from both sides. In other words, for us to have any hope of reaching the 60 percent attainment goal, both sides must change.
On one side, higher education institutions and government officials must do a better job of listening and responding to the needs of employers. They must show greater willingness to work in genuine partnership with the business and workforce-development community … to give students what they truly need to succeed on the job, and in life. And they must eradicate the false distinctions between what many tend to revere as “education” and what is often derided as mere “training.” It’s well past time for a full realization that virtually all skills are workforce-relevant and that all are constantly evolving.
The work we’re doing at Lumina—and, really, all that I’ve learned in more than two decades of work in the higher education arena—convinces me that fundamental changes are needed on the supply side. Simply put, it’s time for a thoughtful redesign of the postsecondary system. Despite its many strengths—strengths that, admittedly, served this nation well for many decades—the current system simply cannot get us where we need to be in the 21st century.
Perhaps the best indicator of the limits of the current system is the very real problem we have with college costs. After my remarks today, I’m looking forward to the chance to talk informally with participants in the City Club Student Program, all juniors or seniors from area high schools. I am absolutely sure that many of these promising young people—perhaps all of them—are worried about how they will afford that all-important next step in their academic careers. They know—and anyone listening to me today surely knows—that the increasing cost of higher education has challenged students and families for many years. But now, the challenge is immense. In fact, it’s clear that we’ve reached a critical crossroads when it comes to funding higher education in this country. What we’ve always done just isn’t working anymore.
For decades, the American higher education system has essentially relied on two major sources of funds: government appropriations, and the tuition and fees paid by students and families. When one source was in short supply, institutions looked to the other. Both of these sources have increased over the last two decades to meet rising college costs. It’s been a constant chorus droning in the background … what I like to call the “mood music” accompanying the national conversation about college finance.
But now the music has stopped. After years of college costs rising faster than inflation, faster than family incomes, faster even than the cost of health care—we’re at the limit. Neither government nor students can afford these continuing cost increases. The money, and the political will, are just not there. Yet the demand—and the societal need—for increased college attainment is greater than ever before in our nation’s history. That’s what Goal 2025 is all about: meeting that rising need.
Make no mistake: The challenge is huge: We need to scale up the system so that it can produce the numbers of graduates that our economy needs, all while maintaining or improving the quality of its graduates … and without major new investments made by the federal government, states, parents and students.
In short, we need a more productive higher-ed system—one that enables institutions to provide the support needed to help every student succeed. We need a system that ensures quality by fostering genuine learning, not mere program completion … a system that truly prepares students for work—and for life—in an increasingly global society.
Such a system should allow students to accumulate credits from different institutions over several years to earn a degree, minimizing waste and duplicative learning. That system should also acknowledge and credit prior learning—skills developed through work or military service and which often reflect a student’s abilities even better than earning classroom credit.
At Lumina, we believe strongly that higher education needs to be far more focused on the needs of students and less on the needs of higher education institutions. And it’s critically important that we focus on today’s students—the ever-growing number of low-income, first-generation, minority and adult students … the 21st century students who constitute the “real world” on campuses these days.
Ultimately, this means that higher education must be more student-centered. Or, to put it in terms that might resonate better with the employers and business leaders we seek as partners: it must be more customer-focused. By better serving its main customers—students—the postsecondary system will also meet the needs of employers, not to mention the ultimate customer base, which is American society itself.
Again, the business community—the demand side—also has a major role in making the Big Goal a reality. And as I said, my Lumina colleagues and I are doing more and more these days to encourage employers to seize that role. Put most simply and directly, we are urging business representatives to get in the game.
Too often in the past—and even today, despite the urgent need for a new approach—employers, local chambers of commerce and workforce-development groups have stayed on the sidelines when it comes to higher education reform. In far too many cases, the business community has assumed one of only two roles. Sometimes it acts as a detached critic of the higher education system; at other times, it’s an unabashed supporter of particular institutions—often institutions that have personal meaning to those leading a business or organization.
What’s needed now is for employers and business advocates to get off the sidelines, to actively and eagerly participate in a broad-based effort to increase college attainment. The numbers don’t lie: Achievement of Goal 2025 will demand steady increases in the number of Americans earning degrees and certificates each year for more than a dozen years. Clearly, for that to happen, the higher education system will have to operate with much greater efficiency than ever before.
New processes and procedures will be required; innovative approaches will have to be taken—all in an effort to boost productivity and to maximize higher-ed’s return on investment. Obviously, these are lessons that any successful businessperson has learned and applied many times over. And they are lessons that can and must be taught in the postsecondary arena. True, colleges and universities generate people, not products, so the lessons won’t translate precisely and will have to be adapted. Still, if the approach is mutually respectful and truly collaborative, there’s no doubt that much progress can be made if business takes a teaching role in the productivity effort.
It’s also important that higher education focus much more of its efforts specifically on increasing attainment among adult students. The idea in targeting adults for postsecondary success is not simply to ensure that employers have a ready supply of trained workers for their own businesses. The view that’s required is much broader than that. Really, it’s about empowering the individual … because that’s the power that ultimately drives ALL businesses.
Finally, employers can’t limit their working partnerships to those that include members of the higher-ed community. They must also reach out to a third vital partner: the policy community. In short, employers must become active and committed advocates for policy change—the kind of systemic, civic-minded policy change whose aim is to improve the overall economy and society as a whole.
In other words, it’s vital that business leaders think and work expansively as they join the reform effort. Public-private partnerships are critical to our success as we work to achieve the Big Goal, but they must be inclusive partnerships—cooperative, mutually beneficial ones that involve business, higher education and the policy community.
In practical terms, we’re asking business representatives to view their role in the Goal 2025 effort from three perspectives or through three lenses: company, community and country.
From the company perspective, each employer can take direct and meaningful steps to aid college attainment among its own workers. Some examples:
- More and better programs that provide tuition reimbursement.
- Flexible work scheduling to allow workers to attend college classes.
- Assistance and counseling to help create individualized learning plans for workers.
- Use of company communications to promote employees’ educational efforts.
- Programs that offer tangible rewards to employees who earn degrees and credentials.
- Partnerships with higher-ed institutions to offer classes at work sites.
- Finally, employers can also show their commitment by upgrading their hiring standards; in other words, making credentials a requirement for employment.
Next, from the community perspective, employers should make education a central plank in their platform of community engagement and community service. In fact, boosting higher-ed attainment should be at the top of the list when it comes to corporate responsibility efforts. What better way to demonstrate good corporate citizenship than to foster an “education-friendly” workplace? Such a move not only opens a wealth of partnership opportunities with other local organizations, it also can produce huge, long-term benefits to the community. After all, a well-educated populace doesn’t merely improve and deepen the local labor pool, it boosts the overall quality of life in any community.
Finally, and most broadly, employers need to view this effort through the larger lens of country. In other words, business leaders—and really, all of us as Americans—need to be advocates for increasing college attainment because that’s what the entire country needs. Reaching that Big Goal—60 percent attainment of high-quality college credentials—will benefit all of us. A better workforce leads to more robust job creation, sustained growth, and greater economic security in this global age. A better-educated citizenry also means increased civic involvement and greater social stability.
In other words—and in closing—Goal 2025 isn’t something for Lumina to achieve. It’s not an initiative owned by the field of philanthropy … or employers … or state and federal policymakers … or the higher education community. It is—and must be—a broad-based, all-inclusive, national effort. Increasing postsecondary attainment is in everyone’s interest … and that makes it everyone’s business.
Thank you again for the opportunity to speak with you today.