Financial aid in a good direction
Michigan’s economy depends on having skilled workers.
In the “glory days” of Michigan’s past, high school graduates could enter the middle class by getting jobs in the manufacturing sector immediately after graduation and moving eventually into skilled, higher-paying positions.
Today, because technological advances and offshore production have greatly decreased the need for low-skilled, entry-level labor, a high school diploma has far less value in the job market. Employers increasingly prefer to hire skilled workers with a credential such as a college degree, an occupational certificate, or a license.
Despite the growing need for postsecondary credentials, 37% of adults 25 years old and older do not have education past high school, and another 23% have some college but no degree.
In Alcona, Alpena, Montmorency, and Presque Isle counties, 44% to 53% of adults have no education past high school and 22% to 26% have some college but no degree.
With all that in mind, Michigan has established a goal of having 60% of its working-age population possess some kind of postsecondary credential by 2030. That is known as Sixty by 30, and the state Department of Labor and Economic Opportunity even has an office dedicated to that purpose.
The governor’s budget, released three weeks ago, supports that goal with several significant investments to help Michigan residents go to and succeed in college or training programs.
The governor’s budget:
∫ expands eligibility for Michigan Reconnect by lowering the age from 25 to 21, making it available to up to 350,000 more students. Michigan Reconnect provides full (in-district) or partial (out-of-district) coverage of community college tuition costs and can be used to complete an associate degree or a Pell-eligible skill certificate program.
∫ increases funding for the Michigan Achievement Scholarship, which offers up to $2,750 a year at a community college, $5,500 a year at a public university, or $4,000 a year at an eligible private university.
∫ creates a one-time student wellness fund to address college and university students’ mental health needs.
∫ creates a new student success program to promote student degree and credential completion.
∫provides a Reconnect Bachelor’s Degree Pathway Program to help students whose education was disrupted by the coronavirus pandemic go back to college and earn a bachelor’s degree.
∫ includes funding for student wraparound services such as child care, on-campus food pantries, housing, mental health supports, or funding to resolve institutional barriers to college success.
∫ increases funding for adult education to help adults needing basic skills remediation become ready for postsecondary education or training, and
∫ establishes pilot programs to connect adult learners with postsecondary and employment opportunities.
Those are bold investments that will pay off for Michigan.
According to estimates from the Economic Policy Institute, Michigan workers with a bachelor’s degree have a median wage ($36.02 per hour) nearly twice as high as those without education beyond high school ($18.73 per hour). (Unfortunately, that data is not available for associate degrees or occupational certificates).
In addition to lower educational attainment levels in the counties in this paper’s readership, there are higher poverty rates and lower median wages than in the state as a whole. Giving local residents financial aid and wraparound services to help them succeed at Alpena Community College or one of Michigan’s many public and private, nonprofit universities would seem to make sense.
Raising Michiganders’ wages by helping them attain higher levels of education and skills training reduces financial hardship and increases family well-being. It results in more consumer spending at local businesses, which stimulates the economy as more dollars are in turn spent locally by the employees of those businesses. It helps reduce unemployment and addresses the skilled labor shortage. Finally, it increases tax revenue and reduces the need for public assistance.
In other words, the new spending proposed by the governor is a form of economic development that will benefit Michigan’s businesses, workers, and families and will strengthen the state budget. It will be a sound investment.
Peter Ruark is senior policy analyst at the Michigan League for Public Policy.