Investing in Education Will Build a Stronger Maryland Economy

It's back-to-school time again. It's a good time to think about how education contributes to our economy and our quality of life.

The best way for Maryland to grow its economy is by continuing to invest in a well-educated workforce, according to a new paper published by EPI for the Economic Analysis and Research Network (EARN—a network of state local and national economic think tanks, including MBTPI).

In A Well Educated Workforce is Key to State Prosperity, Noah Berger, president of the Massachusetts Budget and Policy Center, and Peter Fisher, research director at the Iowa Policy Project, find a strong link between the educational attainment of state workforces and both productivity and median wages. In Maryland, 41 percent of the workforce have college degrees; the US average is 33 percent. Maryland's average hourly earnings are $19.12, almost $3 above the national average.

Expanding access to high quality education will create more economic opportunity for Marylanders and do more to strengthen our overall economy than anything else state government could do.

 Some ways to increase the educational attainment of Maryland’s population include:

•  increasing funds for preschool programs and quality childcare,
•  restoring full inflation increases in the “Thornton” public school funding formula, an
•  keeping college affordable by holding down tuition growth, and increasing need-based financial aid.

Meanwhile, strategies such as cutting taxes to lure employers and capture private investments from other states are shortsighted, and promote a race to the bottom which undermines states’ ability to invest in and attract an educated workforce. The paper finds no clear relationship between a state’s tax rates and its wages.

The Week Ahead

Last week we blogged about sales tax modernization strategies for Maryland and posted about the realities of personal budgeting for low-wage workers in the state.

The Bureau of Labor Statistics issued a number of economic news releases last week. Its earnings report shows that the seasonally adjusted median weekly earnings in the second quarter of 2013 were $775, up a minor $6 from the previous quarter. The Employment Cost Index figures for the three-month period ending in March of this year indicate overall compensation levels for civilian workers were steady from the previous period, with wages increasing by 0.5 percent and benefit costs decreasing 0.1 percent. The Consumer Price Index report for June lists the CPI as having increased a half of a percent last month, with the increases in gas prices accounting for the majority of this change.The index for non-food and non-energy goods increased by 0.2 percent, staying level with the figures for May. The preliminary multifactor productivity trends analysis (which measures the change in output per unit of combined capital and labor input) for 2012 states that productivity in the private nonfarm business sector increased at a 0.9 percent annual rate last year, which is the same annual rate the nation experienced from 1987 to 2012. The unemployment numbers reported the state's unemployment rate increased by 0.3 percentage points in June to 7 percent. The private sector added over 6,000 jobs last month, reaching the highest employment level for the sector since June of 2008. Government jobs decreased by nearly 2,000 jobs during that period. Maryland's unemployment levels still remain below the national average of 7.6 percent.

Also last week, the Maryland State Retirement Retirement and Pension System published a press release proclaiming their investment portfolio earned a 10.6 percent return last fiscal year. This achievement went well beyond the state's target of 7.75 percent.

For the week of July 22nd through the 28th:

• On Wednesday, July 24th, the Board of Public Works will hold a general meeting at 10am in the Assembly Room of the Goldstein Treasury Building at 80 Calvert Street in Annapolis.
• Later on Wednesday,  Progressive Maryland, Common Cause, and Delegate Mary Washington are hosting a joint event, screening Bill Moyers' acclaimed film "The United States of ALEC" at the Baltimore County Public Library at 320 York Road in Towson. The documentary details the activities of the American Legislative Exchange Council, a group of corporate lobbyists who author "model legislation" that attacks labor rights and promoting corporate interests and privatization, to be used by member legislators in their home states. Following the screening, there will be a discussion. Directions and RSVP information is available here.
• On Thursday, July 25 the Special Joint Committee on Public Safety and Security in State and Local Correctional Facilities will conduct a site visit to the Baltimore City Detention Center at 10am.
• Later on Thursday, the Maryland Medicaid Advisory Committee will meet from 1pm to 3pm at the Department of Health and Mental Hygiene's lobby level conference room L-3 at 201 W. Preston Street in Baltimore. The agenda is to be announced.