Wednesday, January 27, 2016

How educated is the Wasatch Front North’s workforce?
It depends on how you look at it — based on where they work or where they live.

Matt Schroeder, Regional Economist

Local leaders have become increasingly aware of the relationship between the education level of their local workforce and the economic strength of their communities. Higher levels of education are closely linked to higher incomes for individuals; which, in turn, brings in higher tax revenues and lower government social program costs. People with higher education levels tend to be healthier, more involved in community organizations and give more to charity. They are also less likely to be chronically unemployed, less likely to require social assistance, and have lower incarceration rates.

More broadly, when businesses look to expand or locate in a particular area, one of the primary factors they consider is the availability and training of the local workforce. A region with a more highly educated labor pool will tend to draw businesses that need highly educated employees. Those jobs, in turn, tend to garner higher wages. Higher wages mean more consumer spending and tax revenue for local governments, which allow for investment in infrastructure, public services and community development.

These benefits have long been known and I mention them to highlight why so much emphasis is often placed on education in the public arena. It really matters for community health and development. But there is an interesting question to this issue that is seldom explored when we think about how to better educate our local workforce: Should we be focusing on the education levels of the people who live in our communities, or on those who work in our communities?

To clarify, we’re talking about community investment in increasing higher education attainment levels, not the funding of primary and secondary education. On the resident workforce side, this may include expanding post-secondary degree programs and institutions, or encouraging and supporting student enrollment in higher education. On the working workforce side, higher levels of educational attainment are achieved by growing the number of jobs that require higher levels of education. Community investments to achieve this may include developing infrastructure and facilities to meet the needs of businesses, incentives for target industries.

For a local city or county considering investing in these types of development projects with limited funds, where should their focus be? This is an especially relevant question in an area like the Wasatch Front North where the local commuting patterns are very fluid. Thousands of commuters flow (mostly south) along I-15 every day to jobs in other cities and counties. A well-educated economist, for example, may be living in Ogden, but commutes down to Salt Lake City every day for work. Should local leaders be concerned with developing a better-educated resident workforce if they are likely to commute somewhere else for work? Or should the community be more focused on bringing in the kinds of jobs that will help keep an already well-educated population working closer to home?

The answers to these questions depend on the specific characteristics of local economies, and unfortunately, no single answer or formula can be applied across the board. As a start, it helps to first have a picture of what’s actually happening. The interactive data visualization above allows you to see the situation for your county. Click on the map to see your county and hover over each chart to see details and an interpretation of the data.

In Davis, Morgan and Weber counties more people commute out for work than come in. Of the three, Davis County has the largest net outflow, with more than 26,000 net out-commuters representing about 30 percent of the resident workforce. Of those 26,000, more than 40 percent, or some 11,000 net out-commuters, have a bachelor’s degree or higher. The share of workers with a bachelor’s degree living in Davis County is 34 percent while the share working there is just 31 percent.

Morgan County sees the largest percentage of its resident workforce commute outside the county for work. The net out-flow of 1,800 workers represents more than 60 percent of the resident workforce and about 650 of those have a bachelor’s degree or higher. The share of workers with a bachelor’s degree or more living in Morgan County is 33 percent — 6 percentage-points higher than the 27 percent with the same level of education actually working in the county.

Weber County has the lowest rate of worker out-flow of the three counties. More people commute out for work than come in, but the net outflow of about 1,600 represents only 2.5 percent of the resident workforce, and about half of those are workers with a bachelor’s or higher.

Each of these counties is distinct in terms of the factors that play into why their worker flow patterns exist. For Davis and Morgan counties there is clearly a current resident population more educated than the local job market demands. It may be worth exploring the possibility that those areas may benefit from a greater focus on high-skilled job creation. Weber County, on the other hand, is currently balanced in terms of the share of highly educated workers that live and work there, but with a relatively low share in both, Weber may benefit most from a two-pronged approach that seeks to bring in higher skilled jobs while at the same time building the workforce to fill them.