Report: States Can Build a Stronger Economy by Focusing Resources on Education

A new report from the Economic Policy Institute points to education as the key to economic wellbeing.  The takeaway: To raise the median wage, state lawmakers should focus on improving the entire education system and helping students attend college and gain degrees.

"If Oregon lawmakers want a stronger economy — one where typical Oregonians earn more — they need to raise our workforce's educational attainment," said Chuck Sheketoff, executive director of the nonprofit think tank Oregon Center for Public Policy.

  "That means lawmakers need to invest more in education, from early childhood through higher education."

The report, "A Well-Educated Workforce is Key to State Prosperity" looked at education levels, productivity and median wages by state.

It found that the states with more educated workers have a higher median wage.

Authors Noah Berger, president of the Massachusetts Budget and Policy Center, and Peter Fisher, research director at the Iowa Policy Project, found what they called a striking consistency in the findings.

"Overwhelmingly, high-wage states are states with a well-educated workforce. There is a clear and strong correlation between the educational attainment of a state's workforce and median wages in the state."

Not a single state broke the pattern by having less-educated workers and higher median wages, or well-educated workers and lower median wages.

The report also found that lowering taxes for corporations had no positive impact on average wages.  It concluded that states that reduce corporate taxes in order to attract and keep businesses, also reduce their ability to fund education.  So they receive little benefit from the "race to the bottom."

Instead, the report says states should increase efforts to graduate more students, help dropouts get GEDs, hold down tuition costs, increase financial aid and improve the education system from pre-school through high school.

"We know what's preventing higher educational attainment and what's needed to improve it," said Sheketoff. "We just need to make those policies a priority and stop the wasteful tax subsidies that plainly don't work and rob the state of valuable resources."