Skilled work force: chicken or egg problem?

Posted by R. Neal

Here's an all too familiar story in the South:

In Mississippi, the average income for someone with an advanced degree is nearly triple that of a high school dropout, $45,000 compared with $16,000. A bachelor's degree alone increases a person's average salary to about $36,000.

But only 17 percent of Mississippians have a bachelor's degree or higher, according to census figures. The national average is 24 percent.

"It's a problem," said Tom Meredith, the state's new commissioner of higher education. He has made increasing the education level for Mississippi a major initiative.

"The answer to every economic question is education," he said, noting that college grads are generally healthier, vote more frequently and are less dependent on government programs, according to a variety of studies.

One solution of course is to throw more money at the problem. Georgia and now Tennessee have been quite successful with their tax-on-the-mathematically-challenged lottery scholarship programs, which have increased enrollment (but not necessarily academic quality, which is a debate for another day). According to the article, Mississippi plans to up the ante:

In recent years, state officials have been making efforts to attract to Mississippi industries that require skilled labor. This summer, lawmakers passed Momentum Mississippi, a $27 million incentive package geared toward attracting high-tech companies to the state.

"Having highly trained technical graduates is important to attracting the research-oriented technology businesses that Momentum Mississippi is designed to attract," said Scott Hamilton, spokesman for Mississippi Development Authority.

The problem is that if there are no technology jobs and therefore no demand, students will be less inclined to take advantage of such programs or move to another state where there are jobs once they're trained. Conversely, companies that require a skilled work force won't move where there isn't a skilled work force. We have the same problem here in Tennessee. It's a sort of Catch-22. Then there's that whole outsourcing thing.

One idea with interesting potential is to leverage the South's lower cost of living and generally lower wage structures to create low-cost software development "in-sourcing" centers. One such company, Rural Sourcing, Inc., has done just that, setting up operations in Arkansas and North Carolina to provide cost-competitive alternatives to offshore outsourcing of IT projects. I would rather see states working with companies such as Rural Sourcing in a homegrown, grassroots cooperative approach as opposed to corporate welfare handouts to huge politically-connected companies like BearingPoint as mentioned in the Mississippi job training article.

State job training programs are also missing the point that there are plenty of skilled labor and professional trade jobs that don't require a college education and that can't be outsourced overseas. There should be more emphasis on this kind of vocational job training for those not inclined or equipped for college.

But the lack of government funding for education and job training isn't necessarily our problem here in the South. It's a symptom. The larger problem is that we just don't value education. Our lack of education funding is a reflection of that -- we aren't willing to pay for it because we don't perceive the value.

We're known for having a good "work ethic," but we seem to have a self-defeating "we're not smart enough so why bother" attitude that makes us content with low pay, no skill, no benefit call-center jobs or slightly better factory jobs provided by benevolent foreign manufacturers, bought for us by our paternalistic government. We're way behind in transitioning from a rural, agricultural economy. By the time we geared up for the "industrial age" it was over. Maybe it's time for us to set our sights a little higher and start thinking ahead of the curve. And dream bigger.

OK, then.