If baby boomers need another persuasive reason why it’s critically important to invest more now in higher education in California, they should consider this: They’ll need more workers with college degrees, if they want to make money selling their homes in the next 20 years.
University of Southern California demography professor Dowell Myers made this pitch to self-interest Tuesday during the second hearing of the Joint Legislative Committee on the Master Plan for Higher Education. He and others have warned about the coming threat to the state’s economy from a shortage of workers with college degrees. Thirty-five percent of workers 55 to 59 years old have at least a bachelor’s degree, compared with 26 percent of workers aged 25 to 39. Workers with a college degree earn on average 90 percent more than workers with a high school degree in California.
The Public Policy Institute of California has projected a shortage of 1 million workers without a bachelor’s degree in 2025. CEO Mark Baldassare said the state won’t be able to close that gap, but it could cut it in half, with a three-prong effort to increase the percentage of high school graduates who go on to college, the transfer rate from community colleges, and the college graduation rate.
California will have to grow its own talent, because it will no longer be able to count on importing a surplus or workers from other states. Quite the opposite, more Californians with college degrees are leaving the state than coming in. The state will continue to draw skilled foreign workers, but not enough to fill the need, Baldassare said.
California is 18th in the nation in the percentage of population with a bachelor or associate degree, Baldassare said; 56 percent of high school grads go directly to college, compared with 62 percent nationally.
In order to increase the college completion rate, students need the right classes in the right sequences in the right time, said Henry Powell, chairman of the UC Academic Senate. Instead, with budget cuts, students are getting shut out of classes they need – or they’re not getting being admitted to a state university. The California State University’s 23 campuses have reduced admissions by 40,000; the University of California by 2,300. And 200,000 students in community college are not finding the classes they need.
Demographics will compound the problem. For the past 50 years, there have been 20 to 21 senior citizens (age 65 or over) per 100 working residents. By 2030, the ratio will shift to 37 seniors per 100 workers, Myers said. There will be serious revenue and policy implications for the state and the nation – and the real estate market that seniors are counting for a nest egg to hatch their retirement.
Soon after housing prices stabilize following the current recession, prices could erode again as baby boomers unload their houses, creating a buyer’s market. Seniors’ best hope is for an educated workforce to prop up prices, Myers said, noting that Latino home buyers with a college degree buy homes priced an average of 64 percent higher.
Expanded access to higher education is more important today than at any time in California’s history, Myers testified, and it “benefits the older generation at least as much as it does young people.”