In response to labor shortages, states propose billions in higher education spending

Thirty-eight governors are proposing to use increased tax revenues and federal stimulus funding to boost their state’s higher education spending in an effort to address labor shortages by increasing the number of educated workers, according to The Hechinger Report.

In the wake of the last recession, states significantly slashed spending for public colleges and universities, pushing increased college costs onto students and their families. However, amid COVID-19-related economic disruptions, states are attempting to address workforce shortages in fields such as health care, construction, and transportation by increasing higher education funding.

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Previous appeals for increased higher education funding centered on a general idea that education would create opportunities, The Hechinger Report says. However, “The connection between education and the workforce has become more explicit, and the urgency has become much greater,” says Tom Harnisch, vice president for government relations at the State Higher Education Executive Officers Association.

Connecting higher education to statewide industry needs

In Utah, Wyoming, and Colorado, policymakers are providing universities, community colleges, and technical schools with funding for reskilling, upskilling, and apprenticeship programs. Institutions are also partnering with regional or statewide industries to boost employer-driven workforce training.

Lawmakers in North Carolina, Iowa, Michigan and Kansas are working to increase financial aid or offer free tuition and scholarships to students who study fields that lead to jobs in industries such as manufacturing, hospitality, and criminal justice, where demand for workers is particularly high. Meanwhile, Maine, Georgia, and Hawaii are attempting to increase the number of nurses and doctors through higher education funding.

Good news—but also a warning

As a result of these efforts, state support for higher education in fiscal year 2022 rose to $105.4 billion, an increase of 8.3% over the previous year, and the first time state fiscal support has exceeded $100 billion. Tying higher education more forcefully to in-demand, higher-paying jobs encourages continued investment in colleges and universities, says Dennis Jones, president emeritus of the National Center for Higher Education Management Systems. Students already associate a college education with career advancement, Jones notes. “So this all weaves together into something that speaks to students, it speaks to parents, it speaks to legislators.”

However, some educators also expressed concern that connecting postsecondary credentials strictly to their “occupational return on investment” could steer students, particularly those from low-income families, away from other interests they may have. “[Y]ou start to miss out on all the other things, the values, that go along with the experience of a college education,” Paul Johnson, president of the Colorado School of Mines, explains.

Responding to labor shortages with funding for students who train for in-demand jobs is “one way to tackle the problem,” says Taylor Randall, president of the University of Utah. The other option, he explains, is to ensure students are both prepared for the current job market and are able to reinvent themselves for the future. Such adaptability requires an education that also values the humanities and other broader fields, Randall says. “There are skills you can learn across a lot of majors.”

Related: Want to position students for equitable post-college wages? Take a cue from the humanities. >

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