Metrics for boosting educational attainment in Southeast Wisconsin

Recognizing that a prosperous metro Milwaukee depends on an educated workforce, a new Talent Dividend Initiative has emerged in Milwaukee to boost regional educational attainment. The initiative - which is comprised of workforce development, economic development, and educational organizations across southeast Wisconsin - has set its sights on increasing the percentage of adults in the region with four-year college degrees by a full percentage point by 2013.

The initiative grew from a campaign launched by CEOs for Cities (a national network of urban leaders) based on their research suggesting that a one percentage point increase in the number of bachelors degree holders in a metro region can produce a $763 increase in annual per capita income. In southeast Wisconsin’s seven counties, CEOs for Cities estimates that increasing bachelors degree attainment from the current level of 28.7% of the population to 29.7% would produce 13,146 new degree holders and a resulting “talent dividend” of about $1.5 billion annually.

With that goal firmly established, the local initiative is considering two questions:

1. Where should resources be targeted to most effectively attack regional educational attainment?
2. How can the success of these strategies be measured?

The Public Policy Forum was commissioned by the Regional Workforce Alliance's WIRED Initiative to help answer those questions. A report we released today, entitled "Educational Attainment in Southeast Wisconsin," provides an overview of the region's educational pipeline from preschool to college, noting that the majority of new degree holders will come from the 525,000 students already engaged in the pipeline. It contains a series of metrics that provide insights into how the various points of the pipeline are performing and how progress can be assessed. The report also cites several opportunity points for boosting student success and attainment, including:

• Developing college-going behaviors among high school students. Our report finds that while 55% of high school graduates plan to attend a four-year college and 19% of graduates plan to attend a technical college, 17% are undecided about their post-high school plans. Programs to increase the number of college-bound students might set their sights on these undecided students.

• Re-engaging adults who have earned some college credit, but have not completed a degree. More than 20% of the region’s non-degreed adults have attended college at some point and may be interested in continuing their education. Identifying those who are just a few credits short of earning a degree would be the logical starting point.

• Increasing student transfers between two-year and four-year colleges and universities. Completing the degree requirements at a two-year college before transferring to a four-year college can help students reduce the cost of earning a degree. More data are needed, however, to understand and track college transfer trends in the region.

Finally, at all points in the pipeline, strategies to assist minority students offer a substantial opportunity to increase regional degree holders. Currently, just 12% of African-American and 10% of Hispanic residents in the region hold a bachelors degree or higher, compared to 31% of white residents. This is a logical focus for retention strategies, as minority student enrollment in higher education is on the rise, especially in the region’s 2-year institutions.

The Talent Dividend Initiative plans to regularly update the metrics presented in the report to measure the effectiveness of specific strategies toward the overall goal. The full report can be accessed here.

What’s the right peer group for Metro Milwaukee?

Identifying the right group of metro areas with which to compare Milwaukee is a frequent dilemma for Public Policy Forum staff. Our answer is ever evolving. Typical decisions affecting our choices include level of geography (city, metropolitan statistical area, seven-county region), population size, data availability, and project timeline and resources. Depending on the project, we may be looking for best practices that might be replicable in our region or how other cities tackled similar issues to those faced by Milwaukee.

In our Innovation Index, launched in spring 2010, a narrow list of benchmark cities was adopted, combining typical Midwest metros (Indianapolis, Minneapolis, and Cincinnati) and a few existing or rising innovation leaders (Austin, Portland, and Kansas City). The benchmark cities were chosen to provide both a regional context and a set of peers that could set the bar high for Milwaukee’s innovation strategies.

Recent studies from the Brookings Institution Metropolitan Policy Program and the Federal Reserve Bank of New York may reshape how peer groups are determined. Both studies establish new comparison typologies based on the shared economic and/or demographic characteristics of metro areas, as opposed to geographic location alone.

In State of Metropolitan America, Brookings establishes new metro groupings that include Border Growth and Mid-Sized Magnets, Diverse Giant/Next Frontier, New Heartland, Skilled Anchor, and Industrial Core. Milwaukee falls into the Skilled Anchor category, which is defined as “slow-growing, less diverse metro areas that boast higher-than-average levels of educational attainment.” Brookings’ broad analysis of social, demographic, and economic data shows that metro regions can be grouped based on the types of challenges they’re facing, which the authors argue may allow similarly positioned regions to develop “common solutions.”

The Federal Reserve Bank’s Knowledge in Cities assigns cities to 11 different knowledge clusters based on occupational skills requirements and existing industry employment patterns. The clusters include Making Regions, which have high knowledge of manufacturing, but low knowledge in commerce occupations; Understanding Regions, which have very high knowledge of arts, sciences, and the humanities, but low knowledge of manufacturing; and Building Regions, which have high knowledge of construction and transportation. Several areas in Wisconsin (Eau Claire, Green Bay, Racine, and Wausau) fall into Making Regions. Milwaukee is grouped with the Enterprising Regions that have high numbers of jobs in commerce and IT fields. Other enterprising regions are Atlanta, Charlotte, Cincinnati, Denver, Kansas City, Minneapolis, Portland, and St. Louis.

Ultimately, determining the most appropriate metro peer groups may depend on how the Milwaukee region defines itself and its vision for the future. Will the City of Milwaukee’s ranking as the 4th highest in poverty level define the city and link us with similarly impoverished regions? Or will the rise in a skilled computer workforce be leveraged for regional economic gain and link us with the Austins, Pittsburghs, and Seattles who are strengthening their information infrastructure? The answer may lie in how our region responds to its challenges and whether it is able to successfully build on its strengths.

Affordable housing efforts hampered by fragmented approach

The housing bubble burst and subsequent foreclosure crisis have brought the need for affordable rental housing into sharp and immediate focus for many affected families locally. However, even before home prices crashed, the rental housing market in Milwaukee did not meet the needs of many households at low income levels.


In the Public Policy Forum’s latest report, commissioned by the Local Initiatives Support Corporation, we explore the affordable rental housing landscape in Milwaukee County; what it will take to create a sound and sustainable infrastructure to support the development of affordable housing in the county; and how existing publicly funded affordable housing programs might be coordinated more effectively. Our report, entitled Give Me Shelter: Responding to Milwaukee County’s Affordable Housing Challenges, can be downloaded here. Among our key findings:

• Milwaukee’s affordability crisis is driven by low household incomes, not high rents. When compared to other large counties in the United States, Milwaukee is not an expensive rental market. Its average household income, however, was 103rd lowest out of the country’s 112 most populous counties at the time of the last Census.


• Milwaukee’s housing affordability crisis is most severe among extremely low income households—those households making less than 30% of the Area Median Income.


• The vast majority of Milwaukee County’s low-income renters do not receive public rental subsidies. In fact, public subsidy programs help less than one out of every three extremely low income and very low income renter households in Milwaukee County.


• The health of Milwaukee’s current private rental stock is failing. More than 40% of renters in Milwaukee County are living in housing that is inadequate either because it is too expensive, too crowded, or, in fewer instances, does not have adequate plumbing and kitchen facilities.


• Public efforts to address the housing needs of low-income residents in Milwaukee County are fragmented, and the multiplicity of public programs is confusing for both housing developers and investors, as well as for low-income renters. This suggests the need for more unified governance in select programmatic areas to help increase service quality and impact.

Addressing Milwaukee’s affordable rental housing needs will require greater public sector coordination, greater private sector participation, and recognition of the need for an integrated strategy that addresses both the supply side of the equation (i.e. building or rehabilitating low-income units) and the demand side (providing additional rental assistance). Hopefully, the data collected and analyzed in this report, and its conclusions and policy options, will encourage policymakers to tackle affordable housing needs with increased urgency and a greater sense of collaboration and innovation.

Entrepreneurship Drives Job Growth

The health of America’s big corporations dominates daily business and economic news. But as market watchers contemplate whether the latest corporate earnings statements signal that the current economic crisis has hit bottom, policymakers can ill-afford to overlook the role new and small companies can play in reviving the economy.

A series of papers from the Kauffman Foundation helps to refocus attention on entrepreneurs and start-up companies. The research uses Business Dynamics Statistics (BDS), a new data tool developed by the U.S. Census Bureau that tracks the life-cycle of businesses with data on openings, closings, start-ups, job creation, and destruction by firm size, age, industrial sector and state. The Kauffman analysis reveals some striking findings about young firms.

• Economic churning, defined as the number of jobs created versus the jobs destroyed through business contraction or closure, is a by-product of a dynamic marketplace, notes one report. While job loss and business closures are disconcerting for many, the churning of young businesses positively contributes to economic productivity as inefficient firms leave the marketplace and more efficient firms enter or expand their capacity.
  
• As expected, young firms experience a high rate of failure, but those companies that make it create jobs at higher rates than more established firms. “Very young firms (1 year) have a net employment growth rate of about 15%.” In comparison more established firms (29+ years) grow jobs at a rate of about 4%.
  
• Young companies are an important source for job growth. Private sector start-ups accounted for 3% of employment between 1980 and 2005, surpassing the average annual net employment growth rate for all firms of 1.8%.
  
• The Midwest and East lag the West and Southwest in new business development as measured by the percent of employment created by firms younger than 3 years old. Wisconsin ranks near the bottom at just over 6% of employment attributable to young firms. Nevada topped the list with almost more than 11% of jobs created by new companies.

The Kauffman analysis just scratches the surface in explaining early stage companies’ contributions to overall productivity and job growth. Policymakers, though, can benefit from this research and future research using BDS, which helps shed light on business dynamics. It will be particularly useful as policymakers develop strategies to spur economic recovery, especially ones that seek to advance entrepreneurship.


Locally, there seems to be recognition that entrepreneurial activity presents an opportunity - one that must be strategically fostered. Biz Starts Milwaukee, which was launched in 2008, is encouraging new business development, specifically promoting development in high growth industries. Its most recent initiative is Venture Track, which combines Fast Track business planning classes with a mentor program to increase a start-up’s success. Measuring Biz Starts' effect on increasing Milwaukee’s culture of entrepreneurship and the subsequent creation of successful businesses will take time, requiring local entrepreneurs and their supporters to persevere through many economic ups and downs, including the most recent retrenchment. Ultimately, though, active cultivation and support of business innovation and entrepreneurship could show results, translating into much needed jobs for the Milwaukee region.