The companies and industries that employ California, have a rapidly growing demand for a college-educated workforce. By 2025, 2 of 5 jobs will require a college degree and less-skilled jobs will decline as a share. In 2005, about 31% of jobs required college education. It is projected that by 2025, nearly 41% of jobs will require a college degree. If the current trends persist ,California faces a shortage of 1 million college graduates needed for the workforce by 2025.
The members of the Silicon Valley Leadership Group believe that it is imperative that California attract and retain enough students to higher education – community college, CSU and UC, and graduate studies – in California to fill these positions. This means that the innovation, creativity, job generation, and productivity will stay competitive in California and Silicon Valley.
We know that college-educated individuals earn, on average, higher salaries than non-college educated individuals. We also know that there is a widening income gap between jobs that require a degree and those that do not.
Higher incomes for California’s workers will mean more contributions to California’s economic vitality. In fact, for every $1 invested in getting students through college has a return of $3 in tax revenue and lower jail and social service costs. Furthermore, if just 2% more of Californians earned AA degrees and 1% more earned BA/BS degrees, our economy would grow by $20 billion. State and local tax revenue would increase by $1.2 billion per year and 174,000 new jobs would be created.
Divesting in this system has serious consequences for our state, our companies, and our residents.
Investing Today Will Have Significant Future Returns
Since 1990, the state’s contribution to educating each college and university student has dropped by more than 50% in inflation-adjusted dollars. The Silicon Valley Leadership Group believes that it is important to consider higher education as a uniquely powerful investment for creating the jobs and new economic activity that are vital to California’s recovery and budget stability – particularly in Silicon Valley.
As such, the members of the Silicon Valley Leadership Group encourage the Legislature to protect higher education funding and Cal Grants.
Of additional concern to Silicon Valley employers are that:
- California’s per student funding is an average of $7444; the lowest per pupil state funding in Santa Clara County is $5425.
- The state’s budget shortfall is estimated to be $28 billion, which is the size of the total general fund budget of 12 states combined.
- Undergraduate demand is expected to grow by 387,000 by 2019 and to meet this demand it will take $1.5 billion more in revenue.
The Master Plan Recommendations
Given the depth of state funding cuts to the higher education system, it is imperative that the systems find ways to reduce costs and work as efficiently as possible, while safeguarding access and academic excellence.
The members of the Leadership Group believe that the draft recommendations developed by Assemblyman Ira Ruskin and the Joint Committee on the Higher Education Master Plan outline some important areas for the state to focus, including:
- Fiscal and programmatic accountability and the importance of longitudinal data
- Articulation and coordination among the state’s K-12 and higher education systems
- The need for sound and reliable state financing; and
- The power of higher education to stabilize and improve the state’s economy.