As shocked as I was by the prediction, I was equally shocked that everyone in the audience- which was largely composed of elected and appointed board members for Michigan’s 15 public universities – didn’t gasp. Surely the end of a public higher education is a gasp-worthy concern. But something has happened over the past few decades when it comes to funding college. Too often, even ardent supporters of higher education have accepted the idea that de-funding of public universities is inevitable instead of bad policy that can and should be challenged.

It matters because according to a study by the Georgetown University Center on Education and the Workforce, 65 percent of jobs by 2020 will require some post-secondary education or training and 35 percent of those jobs will require a bachelor’s degree. In Michigan Future’s first-ever state policy agenda, we argue with ample evidence that the education-attainment-based income gap is widening, there is no more effective public policy strategy to boost Michigan’s economy than increasing the number of Michiganders who hold four-year degrees.

Ironically, Michigan built one of the nation’s finest higher education systems at a time when our robust manufacturing economy put a comfortable living within the reach of people with limited educational credentials. It’s pretty infuriating that now that economic stability is increasingly dependent on college degree attainment, Lansing lawmakers have largely rejected the idea that expanding access to higher education is a public good.

State funding for higher education in Michigan is woefully inadequate. Public universities largely operate with two main sources of revenue: State funding and tuition. As the state of Michigan has allocated less funding to state universities, tuition rates have increased. Since 2001, state funding for Michigan’s public universities has dropped almost 40% when adjusted for inflation. As my colleague Patrick Cooney has noted, Michigan’s public universities received roughly 60% of their operating budgets from state appropriations in 1985, relying on student tuition for 30%, with the rest coming from other sources. Today, only 20% of university operating budgets come from state support, while 70% comes from student tuition.

This has made college increasingly unaffordable, especially for middle class students whose families make too much to receive Pell grants but are not wealthy enough to pay tuition without loans. Lansing lawmakers have encouraged university boards and leaders to tighten their belts, but after two decades of cost cutting, there is little, if any, fat left to cut.

A budget is a statement of a state’s priorities. This is a moment when Michiganders need to decide whether they think their money is better spent investing in a better-educated workforce or offering another round of tax cuts that have had mediocre returns on job creation. What good is it to use tax cuts to lure companies to and retain companies in Michigan if we don’t have workers who are prepared to fill the jobs they will offer?

So I hope the university board members who attended Governor Snyder’s Higher Education Summit will do more than gasp about the dire potential consequences of our state’s disinvestment in higher education. Many of these leaders are politically connected and I hope they will use their voices in an organized fashion to encourage legislators to boost funding for state universities. Support for higher education is not a partisan matter. It’s about the economic survival of our state.

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The report analyzes changes in employment by education attainment from just before the onset of the Great Recession (December 2007) to today (January 2016) overall, by industry, and by occupation. The bottom line: a preponderance of net new jobs have gone to those with a four year degree or more. The specifics:

• For those with a high school degree or less employment has declined by 5,531,000
• For those with some college or an associates degree employment has increased by 1,337,000
• For those with a bachelors degree employment has increased by 4,590,000
• For those with a masters degree or higher employment has increased by 4,021,000

The economy has added 4,417,000 jobs since December 2007. Employment for those with a four year degree or more increased by 8,611,000. Despite all the rhetoric to the contrary, the demand for those with a four year degree or more far exceeds that of those with some college or an associates degree. With employment increases about 6.5 times higher since the onset of the Great Recession.

Some believe that the post Great Recession economy has changed fundamentally. It hasn’t. The trends were the same during the decline as during the expansion. With those with a four year degree or more doing far better than those without.

From December to 2007 to January 2010 the economy lost 7.7 million jobs. But for those with a four year degree or more employment actually increased by nearly 200,000. From January 2010 to January 2016 the economy has added 11.6 million jobs. Of those 8.4 million (72 percent) went to those with a four year degree or more.

As the report makes clear these trends go back at least to the early 1980s.The reason for this powerful trend––as Michigan Future has been chronicling for more than two decades––is that the American economy is becoming more knowledge based. We are moving from a factory-based to a knowledge-based economy. As the report states:

Since the 1980s, the shift in employment has favored professional service industries, which have relatively higher concentrations of workers with postsecondary education and training, at the expense of traditional factory jobs. With the advent of the postindustrial service economy, job losses were no longer temporary, especially for high school educated production workers. These structural changes were turbocharged in the increasingly Darwinian world of recessions and recoveries, especially since the early 1990s. Those who lost jobs were less likely to be re-hired by the same employer, the same industry, or even in the same occupation. Overall job security declined, especially for high school-educated production workers.

If you check out the report, you will see the changes both by occupation and by industry since 2007 of an economy that is undergoing big structural changes. With professional and managerial occupations and knowledge-based services growing. While manufacturing, construction, and office and administrative support occupations suffering precipitous job losses since the onset of the Great Recession. Those three occupational clusters lost 4.8 million jobs since the onset of the Great Recession while overall the economy was adding 4.4 million jobs. The manufacturing and construction industries since the onset of the Great Recession saw employment declines of 2.6 million.

These structural changes have led to an economy where for the first time ever those with a four year degree or more comprise a larger share of those employed than those with a high school degree or less. 36 percent (up four percentage points from 2007) compared to 34 percent (down five percentage points from 2007). Also noteworthy is that workers with a four year degree or more now earn 57 percent of all wages.

The new reality is that the core of the American middle class is now––and almost certainly will be even more so in the future––those with a four year degree or more. The professional and managerial jobs (both STEM and non STEM) where most of them work are the only occupational clusters which are both growing and pay higher wages.

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The two studies demolish what passes for conventional wisdom on job creation in post Great Recession America. First and foremost, it is not true that we have too many with four year degrees.  From December 2007 (the month the Great Recession began) through September 2015 the economy has added 2.6 million jobs. Who are getting those jobs? Overwhelmingly those with a four year degree or more.

Employment of those with bachelors degrees is up 8.1 million. Employment for those with some college or an associates degree is up 700,000. For those with a high school degree or less employment is down by 6.3 million.  You read that right: Basically all the net new jobs for the past eight years are going to those with a four year degree or more. So if you look at what employers are doing––not what they and their political and media allies are saying––they are demanding and hiring most those with four year degrees.

For those who believe––its not true––that the American economy is different since the end of the Great Recession, the Center on Education and the Workforce details what has happened to employment since the end of the Great Recession. From 2010 (the year after the Great Recession) through 2014, the economy has added 6.6 million net new jobs. Of those 2.9 million are good-paying jobs with wages of more than $53,000 compared to 1.9 million middle-wage jobs ($32,000-53,000) and 1.8 million low-paying jobs (less than $32,000). So much for the conventional wisdom that the predominance of new jobs since the end of the Great Recession are low pay/low skill.

And who are getting those good-paying jobs? Those with four year degrees of more. Of the 2.9 million high-wage net new jobs since the end of the Great Recession 2.8 million went to those with a bachelors degree, 152,00 to those with some college or associates degree and 39,000 fewer with a high school degree or less now have a good-paying job.

The net new jobs for those with a bachelors degree is up 1.3 million in middle wage jobs and 756,000 in low wage jobs. So yes the economy has added some low-wage jobs that are being filled by those with a four year degree or more. But only 756,000 out of more than 4.85 million net new jobs for those with a bachelors degree. For those with some college or an associates degree (which includes those with an occupational certificate) in addition to the increase of 152,000 in high wage jobs, there are 827,000 more in middle wage jobs and nearly 1.2 million in low wage jobs. Not exactly the story we are told over and over again that you can earn as much today with an occupational certificate or associates degree as with a four year degree.

(It is true that some of those in the some college category don’t have either an associated degree or occupational certificate. It is almost certain that those without a credential are working less and earning less than those with a credential. But if the data allowed you to take out those without at least a certificate, it would not change the reality that those with a four year degree or more are doing best in post Great Recession America.)

Finally what about the conventional wisdom that the only four year degrees worth pursuing economically are in STEM fields? Since the end of the Great Recession the economy has added 881,000 high-wage jobs in STEM occupations and another 445,000 for health care professionals and technicians. That is a little more than 1.3 million of the 2.9 million net new good-paying jobs. Nearly 1.8 million net new high-wage jobs were in a category called managerial and professional office. The kind of jobs filled largely by liberal arts and business majors. (Blue collar occupations lost 71,000 and education occupations lost 184,000 good-paying jobs.) So much for there aren’t any new high-wage jobs in non STEM fields!

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