A recent assessment of business climates in the 50 states prepared for USA Today by the financial news site 24/7 Wall Street assumes that a higher-than-average share of the adult population holding a bachelor’s degree in a state in any given year is invariably an indication that the state is doing well at attracting and retaining good jobs for its residents.
And a report filed late last week for the Capital Times (Madison, Wisc.) by business journalist Mike Ivey speculating about the likely impact of pending Right to Work legislation (subsequently signed into law by Gov. Scott Walker on March 9) on Wisconsin’s business climate shares the same assumption. (See the link below for Ivey’s story.)
But is this a reasonable assumption? Common sense suggests that there are several ways the college-educated share of a state’s adult population can rise to a level higher than the national average. And the two that are very likely the most significant pertain to domestic migration.
A state’s adult population can become more educated over time if more college-educated people move in than move out. But a state’s adult population can also become more educated over time if more adults who don’t have a college degree move out than move in.
Most people would agree that the first scenario is a desirable one for a state, while the second one is not. But the 24/7 Wall Street analysis cited by Ivey late last week makes no distinction between the first scenario and the second scenario. Regardless of whether the college-educated share of a state’s adult population is high because people holding at least a bachelor’s degree are moving in, or because people who don’t hold a bachelor’s degree are fleeing, it is counted as a positive.
A more sensible way of measuring a state’s success in improving its “human capital” is simply to look at how rapidly its college-educated working-age population is growing over time, without regard to the growth of the rest of its working-age population.
Since the U.S. Census Bureau has been tracking the total of number of working-age adults (25-64 years) holding at least a bachelor’s degree in each of the 50 states for several years, it is possible for anyone with Internet access to track that trend from 2007 through 2013, the most recent year for which such data are available.
And the results show that, contrary to the conclusion Ivey draws from the 24/7 Wall Street analysis, states with Right to Work laws on the books are typically doing a far superior job of improving their human capital than are states where forced union dues and fees are permitted.
From 2007 through 2013, the college-educated, working-age population of the 22 states that protected the Right to Work for the whole period grew by 12.5% in the aggregate. That’s 3.7 percentage points greater than the college-educated, working age population increase for the 26 states that lacked Right to Work protections for the whole time. (Indiana and Michigan, which adopted Right to Work laws in 2012, are excluded.)
Of the 10 states with the greatest percentage growth in working-age population holding at least a bachelor’s degree nine (Louisiana, North Carolina, North Dakota, South Carolina, Tennessee, Texas, Utah, Virginia and Wyoming) have Right to Work laws. The only forced-unionism state in the top 10 is Delaware.
Meanwhile, of the 16 states with the slowest growth in college-educated, working age population, 13 (Connecticut, Illinois, Maine, Massachusetts, Montana, New Hampshire, New Mexico, Ohio, Oregon, Rhode Island, Vermont, West Virginia and Wisconsin) were forced-unionism through the end of 2014.
The record indicates Right to Work states are doing far better are forced-unionism states at creating opportunities for job seekers with less than a college education as well as for more educated job seekers. This is a key reason why the college-educated adult population share in certain forced-unionism states such as Minnesota is a high as it is: Their working-age population with a high-school degree, but no bachelor’s degree, is actually declining.
A reasonable person would not consider this to be something worth bragging about. But the logic of reporter Ivey’s article is that states should aim to improve their human capital by killing job opportunities for the less educated.