Detroit Chamber: Metro Students Must Finish Degrees to Find Good Jobs

December 4, 2019

Bridge Michigan

Alexandra Schmidt

Many Detroit-area students are not prepared to work where they live.

According to the Detroit Regional Chamber’s first-ever State of Education Report, released Thursday, students are dropping out of the region’s education system at every stage, resulting in a talent pool without the accreditations local employers want.

It’s a “flashing light” on the region’s dashboard, said Sandy Baruah, President and CEO of the Detroit Regional Chamber, at a Wednesday conference call about the report. “Our leaky education pipeline is a huge challenge for our region today and going forward.”

It’s a vexing issue that played out nationally in 2018 when Amazon bypassed billions of dollars in tax incentives to locate HQ2 in Detroit. The company cited concerns with the lack of skilled workers in the region, compounded by a fear the region’s lack of mass transit would hobble its ability to attract outside talent.

“In order for our businesses to succeed, for our economy to succeed, for our communities to succeed, we need people to fill those jobs,” Baruah said.

Completion rates lag behind enrollment

“One of the most impactful metrics we found” was the number of Detroit-area residents that don’t earn a postsecondary degree within six years, said Tammy Carnrike, chief operating officer at the Detroit Regional Chamber. That can be a major impediment in a job market that is increasingly demanding a credential beyond high school.

It’s not that students aren’t enrolling in postsecondary programs — it’s that they aren’t finishing them.

Across metro Detroit, students actually enroll in two- and four-year program at a slightly higher clip than across the nation. But across the region, nearly half of students who start a postsecondary degree have not completed it six years later.

Enrollment and completion rates are even lower for students from the city of Detroit specifically. Fifty-seven percent of city residents enroll in a postsecondary program after high school, compared to the national enrollment rate of 67 percent. Six years later, nearly three out of four students still haven’t completed their degree.

A web of factors contributes to these noncompletion rates.

Sometimes high school graduates are not ready for the increased rigor of college courses. Less than 10 percent of city of Detroit high schoolers are considered college-ready based on their ACT and SAT scores. This is lower than the regional average (36 percent), the statewide average (35 percent), and the national average (51 percent).

It’s an issue the chamber ran into with students participating in the chamber’s Detroit Promise program, which helps cover the cost of tuition and fees of postsecondary programs for Detroit graduates from the class of 2017 who meet certain residential and educational requirements.

“A lot of our two-year students who take advantage of free tuition take a lot of their credits in those two years taking remedial courses. And that’s an indicator they are not leaving high school with a level of postsecondary readiness,” said Baruah.

Some research shows that taking remedial courses actually makes students less likely to complete a postsecondary program, given that the courses demand time and financial resources that do not directly contribute college credits toward the completion of the degree.

Other times, life itself gets in the way.

Car repairs that sap tuition savings, food insecurity, unreliable childcare — all of life’s standard hurdles can get in the way of students completing their degrees. Recently, schools across the state have tried to help vulnerable college students overcome these bumps, from “life needs” scholarships to additional academic advising and community support, with some success.

The high number of residents not completing post-high school degrees has resulted in nearly 700,000 residents across the region who have some postsecondary credits, but no credentials to show for it.

Uncompleted degrees: hurdle or potential powerhouse?

The State of Education report highlights the high cost of lower educational attainment, both for students and the region.

Residents without a degree are less likely to get a job, and they make less money if they are employed. Eight-one percent of the region’s jobs went to candidates with some type of postsecondary credential since 2010, while sixty-nine percent of working-age Detroiters without a high school diploma are either unemployed or not in the workforce.

On top of this, many of the fastest growing parts of Detroit’s economy, such as engineering and business, require a two- or four-year degree that residents struggle to attain. This trend is expected to continue, and would widen the gap between the credentials that the region’s residents have and what local employers want from prospective workers.

The personal financial stress correlated with lower educational achievement is exacerbated for students who took out student loans for programs they didn’t finish. They may have the loan debt associated with a postsecondary degree, but not the wage boost associated with actually earning a degree.

It’s a situation faced by millions of Americans across the country, who are three times more likely to default on student loans than those who finish their degree.

On the flip side, said Carnrike, the nearly 700,000 adults across metro Detroit with an incomplete degree are closer to earning a certification than residents who have never started a program.

“It’s not just students coming out of school, but adults returning to school as well,” Carnrike said.

She says employers can play a major role in providing employees with the support necessary to return to school. Employers will have to start asking themselves, “What can I do to make it easier for my employees who haven’t earned their degrees?”

Metro Detroit has a lot to gain if employers start thinking that way, Carnrike said.

A 1 percent increase in the number of people earning a bachelor’s degree would increase the per-capita income in the region by $1,250, according to the chamber’s report. It also estimates that if the metro Detroit reaches a point where 60 percent of residents have a postsecondary credential by 2030, “the region will see an estimated return on investment of $42 billion.”

Chamber launches new compact

“As a business leader I am hearing a lot about” the lack of qualified home-grown talent, said Richard Hampson, Michigan president of Citizens Bank, at a conference call Wednesday to discuss the report.

“I think numbers like the $42 billion dollar [return on investment] … will get the attention of business leaders,” Hampson said.

While he says many businesses are already impacted by the issue and want to be a part of the solution, Hampson said “more visibility of the data” presented in the chamber’s report “will lead to more business leaders wanting to be a part of it.”

That is exactly what the chamber said it is hoping for.

“One of the first and foremost actions,” the chamber plans to take following the release of the report “will be putting together a compact” through their Detroit Drives Degrees Program, says Carnrike.

The chamber’s new Detroit Drives Degrees Talent Compact aims to be a collaborative effort among regional educational institutions, businesses and nonprofits to break down barriers to postsecondary educational attainment.

“All this information that we’re presenting is years and years built up. And we’re not going to be able to turn it around immediately,” Carnrike said, but “we have to do a better job” of “getting students into college and keeping them there.”

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