Investing in Education Pays off for States
States can raise wages and build a strong foundation for economic success by making investments in education, particularly higher education, according to a new report from the Economic Policy Institute.
The report, “A Well-Educated Workforce is Key to State Prosperity,” makes the following points:
- High-wage states have a well-educated workforce;
- Expanding access to high-quality education strengthens economic opportunity for residents and boosts the state’s overall economy;
- Trying to outdo other states in cutting taxes makes it harder for states to invest in education; and
- Investing in education is good for state budgets in the long-run, since highly-paid workers contribute more in taxes.
The conclusions of this report might seem like common sense to many people in Wisconsin. After all, education has long been an engine of our state’s economic growth. We have depended on a well‑educated workforce, shaped by excellent public schools, to lay the foundation for our prosperity.
Unfortunately, recently Wisconsin has been reducing investments in education. Between 2006 and 2012, state General Purpose Revenue (GPR) spending for the UW System fell by 8.6%, as shown in the chart below. GPR spending on K-12 education decreased 16.1%, and GPR support for the state technical college system dropped by a startling 25.4% over this period.
Given the strong link between investing in education and broad-based economic prosperity, Wisconsin should reverse recent trends in education cuts that could do long-term harm to Wisconsin’s economy.