Many workers in Indiana will miss out on quality jobs because they have no education. If left unaddressed, experts and advocates say Indiana’s workforce could lag other states as the pace of digital development and automation accelerates.
According to federal data, Indiana ranks 35th in the number of first-time enrollments for any type of postsecondary education per capita and 37th in the percentage with any degree or certificate.
Kevin Brinegar, CEO and president of the Indiana Chamber of Commerce, said the problem begins with young Hoosiers falling behind in reading and math.
“We must all redouble our efforts if Indiana is to be as competitive as possible in an increasingly knowledge-based economy,” he said.
The state’s low literacy and math proficiency on standardized tests is “somewhere between alarming and depressing,” said Chamber Vice President Jason Bearce.
Indiana’s 2021-22 IREAD assessment results suggest so approximately 1 in 5 Hoosier children do not have basic reading skills until third grade.
In a Tuesday news conference, Indiana Chamber leaders joined a chorus of voices urging lawmakers to address the state’s “leaky talent pipeline” in the 2023 session.
“The system” leads to worse results for black and Hispanic students, Brinegar said.
Those with at least a bachelor’s degree are less likely to be unemployed and more likely to participate in the state workforce, according to state data the chamber leadership pointed out in a report earlier this month.
“There’s a kind of wishful thinking and in some circles, ‘well, students might not go to any kind of higher education, but they go to work,'” Bearce said. “The labor participation rates for students who do not go to post-secondary school are up to date [the] Waste. So they don’t work. They do not go to school and are not able to work in the long term.”
The country’s labor market is currently so tight that there are about twice as many job vacancies as there are job seekers, according to federal estimates.
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The Chamber argues that the state must “focus our policy focus and state resources on improving the educational outcomes and skills of those at the bottom of the educational scale”.
Bearce also recommends more government investment in “quality early education” to make childcare more affordable for Hoosier families. This includes more families being eligible for government vouchers that help cover childcare costs.
“You could argue that it’s a broken system, it’s very costly. On a good day, childcare workers barely break even,” he said. “The wages for the workers we have are quite low which makes it difficult to retain childcare workers, we think the funding mechanism should take this into account where possible, and [incentivize] childcare workers to raise the wages of their workers and … raise their education and skill levels.”
Chamber leadership also said the state should consolidate low-population school districts to improve outcomes. It wants lawmakers to require high schoolers to fill out the federal Free Student Aid Application (FAFSA) after a bill to that effect was reset in session 2022.
And they also want the state to encourage participation in its 21st Century Scholars program. Fewer than 40 percent of eligible low-income students enroll in the program, they note, and of those, fewer than half complete the preparatory activities required to receive the scholarship, which can take up to four years to complete can cover tuition fees.
Even when students go to college and graduate, many do not stay and work in the state after they graduate. Only 29 percent of 18-year-olds in Hoosier finish college and stay in Indiana, according to an analysis by Ball State economist Michael Hicks. The chamber recommends that state legislatures invest in programs that encourage postgraduates to stay.
These recommendations line up very well with some of the proposals put to lawmakers by the Governor’s Workforce Cabinet earlier this month.
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For example, the cabinet recommended that all eligible students be automatically enrolled in the 21st Century Scholars program, rather than applying. They also recommended adjusting state funding for colleges and universities based on how many of their students stay and work in Indiana after graduation.
“Most of these recommendations are extraordinarily cheap and should come as part of a modest policy adjustment.” said Michael Hicks, a Ball State economist . “But it misses the big problem… We spend less on child and young adult education today, adjusted for inflation, than we ever have in 30 or 40 years.”
Hicks said high school graduation requirements have been relaxed to the point that diplomas are “worthless.”
“We’re well behind advanced states in terms of percentage of bachelor’s degrees or higher,” he said.
Hicks said the problem won’t be solved unless lawmakers recognize “we have a deficit here. We need to raise taxes, spend more money on them and do it more efficiently.”
Brinegar prefers “strategic investments” using Indiana’s existing surplus funds.
“My thought would be that we need to take an incremental approach. But with a great sense of urgency,” he said.
But Brinegar said he needs more specific information about plans to increase taxes and spending on education before he can act.