16 Dec Closing the income gap begins with education
Madison, Wis. – In Milwaukee County, roughly one in five adults holds a four-year college degree. In Dane County, more than two in five adults graduated from college. Is it any surprise that household incomes in Dane County are proportionately higher?
A report by the Wisconsin Taxpayers Alliance has provided a fresh look at household incomes in the state, but the conclusion is an old as your mother’s advice: Stay in school, earn a degree, and maybe you’ll make something of yourself.
The median family income in Madison-centered Dane County is $64,264 per year compared to $35,765 per year in Milwaukee County, the non-partisan Taxpayers Alliance reported this month. That’s a city-to-city wealth gap of about 80 percent, compared to less than 10 percent in 1990.
There are some obvious explanations. Madison is a more tech-oriented city than Milwaukee, which was stung by the loss of high-wage manufacturing jobs over much of that same time period. Madison also has more public-sector employees because it’s the hub of state government and the University of Wisconsin-Madison, one of the nation’s largest universities.
Then again, Dane County has been the state capital and the home of the state’s largest college campus for more than 150 years. During most of that time, Milwaukee was easily the wealthier city. What changed the equation?
The answer is the rise of the “knowledge economy.” In decades gone by, all that was required to earn a good living in America was a strong back and a willingness to work. It was possible to be laid off at the end of first shift in one factory and be hired by third shift in the next. For the most part, no one asked how far you got in school. If you had a high-school degree, that was usually good enough.
Playing catch up
But the rest of the world caught up to us. Goods that once were manufactured predominantly in the United States could be made elsewhere, usually at comparable (or better) quality and at lower cost. Some American companies and unions were slow to embrace change, and more innovative competitors abroad grabbed market share by the slice.
Those companies that put innovation at the core of their business plans survived and even prospered, however. They adopted technology to improve their processes and their products – and they hired workers who were up to the task. That usually meant workers who had gone beyond high school, perhaps earning a technical college or four-year college degree.
Today, those educated workers are a valued commodity. Companies that are competing in the “knowledge economy” are drawn to places with educated workers. For some of those firms, having the right workers is far more important than cheap land or tax cuts. If a tech-oriented company doesn’t have an educated workforce, it must find one.
Some leaders in Milwaukee have reacted defensively to the report, even fanning the flames of ancient Madison-versus-Milwaukee rivalries. Others have suggested the comparison to Madison isn’t relevant because Milwaukee is a larger city, better measured against Pittsburgh or Cincinnati.
Fair enough: Let’s look at larger cities. San Francisco, San Jose, Austin, San Diego, Portland, Raleigh, Atlanta, Charlotte and, yes, Pittsburgh. All rank among the nation’s top 20 cities when it comes to workforce education levels. Predictably, they all boast income levels to match.
Degrees of attainment
Wisconsin’s education gap is statewide; the percentage of adults with a four-year degree runs about one percentage point behind the U.S. average. But it’s a more serious problem in Milwaukee, where statistics show African-American children are less likely to score well on tests, to attend classes routinely, and to graduate from high school. That’s not just compared to all Wisconsin students, but to African-American students elsewhere in America.
Education levels drive economic opportunity, performance, and wages. That’s true whether it’s big-city Milwaukee or small-town Wisconsin. Those places with educated workers will prosper in today’s economy; those without will lag behind.
Recent articles by Tom Still
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