Utah’s economy is a “shining star,” according to one respected economist, and the national economy is also poised for stronger growth.
In a recent speech at a Zions Bank client lunch, Dr. Mark Zandi, chief economist for Moody’s Analytics, was mostly optimistic about our economic prospects, but he also pointed out some serious long-term threats, both in Utah and nationally.
I share his concerns and believe our policymakers and business leaders need to remain focused particularly on education challenges, a problem Zandi identified as an economic threat.
Zandi predicts GDP growth of 3 percent this year and 4 percent next year, thanks to a strong housing market, less fiscal austerity, low energy costs and strong corporate and household balance sheets. This economic growth will improve employment rates, with the U.S. reaching “full employment” (about 5.5 percent unemployment) by late fall of 2016.
While all of this is good news, Zandi said a crucial long-term threat is labor shortages and poor education. Within five years, he said, lack of qualified labor will be a big problem, caused by baby boomers retiring, restrictive immigration policies, globalization/technological change leaving many low-level jobs obsolete, and an education system failing to prepare young people for a high-tech, globally interconnected world.
It seems contradictory, but I believe Utah and the country could simultaneously face labor shortages and continued high unemployment. Great jobs will exist in science, technology, engineering and mathematics. But many of today’s low-wage jobs will be eliminated by automation and off-shoring, leaving behind many people unprepared for the excellent jobs that will go unfilled and increasing the wage/inequality gap.
This all has particular poignancy for Utah. We have the most children, percentagewise, of any state in the country. This provides great potential to be a jobs magnet — if our students are prepared. Or, we risk economic mediocrity if our education system doesn’t measure up.
With our state’s admirable focus on children and families, Utah should lead the nation in education performance. It is our greatest opportunity — and greatest risk. If we really care about our young people, we won’t allow them to be unprepared for the exciting world that awaits them.
However, our public education student performance continues to lag behind many peer states. Too many young people are not graduating from high school, let alone college. Gov. Gary Herbert has set a goal of having 66 percent of Utah adults achieve post-secondary degrees or certificates by 2020, and he has brought together the public and private sectors to make this happen. But the initiative is in danger of falling short.
While state lawmakers added $168 million to the public education budget this past session, Utah remains mediocre in education funding “effort” — the percentage of tax dollars devoted to education. Formerly, Utah was among the top states in this measure.
Certainly, great education is not all about more money. Utah also lags many states in providing education choice, allowing funding to follow the student so families can select the best education opportunities for their children, creating healthy competition.
Some Utah charter schools and private schools are making excellent progress with exciting innovation and advanced learning using technology. But little cross-fertilization or “best practice” exchanges are occurring among public, private and charter schools.
We don’t have enough discussion between reformers and the education “establishment.” We all need to set aside our ideological positions in the interest of educational excellence for all Utah children. Both sides have important contributions to make.
I am confident we can do it, but it will require an even bigger effort than the many initiatives currently underway.
A. Scott Anderson is CEO and president of Zions Bank.