Economic Growth and Tulsa Tech

Transcription

1 Economic Growth and Tulsa Tech Tulsa Tech - Owasso April 26, 2016 Mark C. Snead President and Economist 0

2 1. Are Tulsa Tech s activities aligned with existing research on economic growth? 1

3 Methods for Generating Economic Growth Strong consensus on these 4 economic development channels: 1. Better educated workforce (education) 2. More capital spending / higher capital intensity (capital) 3. More traded goods with markets outside the region (traded goods) 4. Larger share of the population in the labor force (participation) 2

4 Tulsa Tech Programs = Education+ Tulsa Tech pursues all 4 channels either directly or indirectly Career Majors (Full-time programs): education, employment share BIS/Customized Training: education, capital spending, traded goods Adult Career Development: education Oklahoma Bid Assistance Network (OBAN): education, traded goods 3

5 Focus is increasingly on workers - not jobs New concerns: Growth now more focused on improving worker skills Develop and utilize existing labor force to a greater extent Economic development success in a region is now measured more by income growth than job growth 4

6 2. Are there clear economic payoffs to education and training? 5

7 Yes, earnings gains to education are still there $1,400 U.S. median weekly earnings by educational attainment 2014 dollars, persons 25 years and older $1,200 $1,000 $800 $600 $400 $200 $0 Bachelor's degree or higher Some college or associate degree High school graduates Less than high school Source: Bureau of Labor Statistics 6

8 OK income by education level over time shows the value of training beyond high school 7

9 Income gains to education have held for decades 8

10 Newly released national data on certificates and licenses suggest wage boost Median weekly earnings by certificate/licensing status 2015 annual average, full-time wage and salary workers 25 years and older 1,400 1,200 Without a certificate or license With a certificate of license 1,256 1,205 1, Less than a high school diploma High school graduates, no college Some college, no degree Associate degree Bachelor's degree and higher Source: Bureau of Labor Statistics 9

11 Personal Income per Capita Personal Income per Capita Clear link from education to earnings across regions Level of Income vs. Years of Schooling (2013) 90,000 80, Largest Metro Areas y = 13532x R² = ,000 80,000 States y = 12897x R² = ,000 70,000 60,000 60,000 50,000 Tulsa 50,000 OK 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10, Average Years of Schooling Average Years of Schooling Source: Bureau of Economic Analysis, Census Bureau, and RegionTrack calculations 10

12 Annual %Change in PCPI Annual %Change in PCPI Income-education link holds over time as well Change in Income vs. Years of Schooling ( ) 6.5% 6.0% 85 Largest Metro Areas y = x R² = Tulsa 7.0% 6.5% y = x R² = States OK 5.5% 6.0% 5.5% 5.0% 5.0% 4.5% 4.5% 4.0% Change in Avg Years of Schooling (years) 4.0% Change in Avg Years of Schooling (years) Source: Bureau of Economic Analysis, Census Bureau, and RegionTrack calculations 11

13 3. How is Tulsa doing on education and income? 12

14 Tulsa continues to lag other comparable regions on average level of education Average Years of Schooling (2013) Denver - 1 Austin - 2 Omaha - 3 Kansas City - 4 Wichita - 5 Nashville - 6 Indianapolis - 7 Albuquerque - 8 Little Rock - 9 Dallas-FW - 10 Tulsa - 11 OKC - 12 Memphis - 13 Houston - 14 San Antonio U.S. Oklahoma Source: Census Bureau and RegionTrack calculations 13

15 The concern over education is not a new problem Change in Average Years of Schooling Nashville - 1 Austin - 2 Memphis - 3 San Antonio - 4 Kansas City - 5 Indianapolis - 6 Little Rock - 7 Omaha - 8 Dallas-FW - 9 Tulsa - 10 Houston - 11 Denver - 12 Wichita - 13 OKC - 14 Albuquerque Nashville - 1 Indianapolis - 2 Memphis - 3 Little Rock - 4 Kansas City - 5 San Antonio - 6 Omaha - 7 Austin - 8 Tulsa - 9 Wichita - 10 Dallas-FW - 11 OKC - 12 Albuquerque - 13 Denver - 14 Houston Nashville - 1 Wichita - 2 San Antonio - 3 Houston - 4 Memphis - 5 Denver - 6 Kansas City - 7 Dallas-FW - 8 Indianapolis - 9 Austin - 10 Tulsa - 11 Omaha - 12 Little Rock - 13 Albuquerque - 14 OKC U.S. Oklahoma U.S. Oklahoma U.S. Oklahoma Source: Census Bureau and RegionTrack calculations 14

16 4. Then is Tulsa a low-income region? 15

17 No, Tulsa has high income relative to most regional peer cities Personal Income per Capita (2013) Denver - 1 Houston - 2 Omaha - 3 Tulsa - 4 Dallas-FW - 5 Nashville - 6 Kansas City - 7 Austin - 8 OKC - 9 Little Rock - 10 Indianapolis - 11 Wichita - 12 Memphis - 13 San Antonio - 14 Albuquerque ,946 51,930 47,736 47,297 46,989 45,759 45,558 44,760 44,280 42,753 42,542 42,060 40,987 39,951 36,287 Little Rock - 4 Austin - 5 San Antonio - 6 Wichita - 7 Dallas-FW - 8 Nashville - 9 Omaha - 10 Kansas City - 11 Denver - 12 Memphis - 13 Indianapolis - 14 Albuquerque - 15 % Change in PIPC ( ) Tulsa - 1 Houston - 2 OKC % 47.6% 45.2% 39.5% 39.5% 38.5% 36.9% 36.7% 34.3% 33.8% 33.4% 32.9% 25.5% 25.5% 23.3% U.S. Oklahoma 44,765 41,861 30,000 40,000 50,000 Source: Bureau of Economic Analysis and RegionTrack calculations U.S. Oklahoma 42.0% 51.0% 0% 20% 40% 60% 16

18 Low cost-of-living inflates Tulsa s relative income level BEA Regional Price Parity (RPP) Index Denver - 1 Dallas-FW - 2 Houston - 3 Austin - 4 Albuquerque - 5 Nashville - 6 San Antonio - 7 Indianapolis - 8 Omaha - 9 Memphis - 10 Kansas City - 11 Little Rock - 12 OKC - 13 Tulsa - 14 Wichita U.S. Oklahoma Source: Bureau of Economic Analysis 17

19 Tulsa ranks among the region s best in cost-of-living adjusted income Houston - 1 Tulsa - 2 Denver - 3 Omaha - 4 Kansas City - 5 Nashville - 6 OKC - 7 Dallas-FW - 8 Little Rock - 9 Wichita - 10 Austin - 11 Indianapolis - 12 Memphis - 13 San Antonio - 14 Albuquerque - 15 Real Personal Income per Capita (2009 prices) ,903 47,639 47,495 47,263 45,396 44,877 44,360 42,878 42,647 42,640 42,123 41,942 40,538 39,305 35,217 Tulsa - 1 Houston - 2 OKC - 3 Little Rock - 4 Austin - 5 San Antonio - 6 Wichita - 7 Dallas-FW - 8 Nashville - 9 Omaha - 10 Kansas City - 11 Denver - 12 Memphis - 13 Indianapolis - 14 Albuquerque - 15 % change % 2.4% 0.6% 24.7% 20.4% 18.5% 13.8% 13.8% 13.0% 11.7% 11.5% 9.6% 9.1% 8.8% 8.4% U.S. Oklahoma 41,707 42,905 30,000 35,000 40,000 45,000 50,000 U.S. Oklahoma 11.8% 23.2% 0% 5% 10% 15% 20% 25% 30% Source: Bureau of Economic Analysis and RegionTrack calculations 18

20 5. Why is Tulsa Doing so Well the Past Decade? 19

21 Mixed performance on labor force participation Denver - 1 Omaha - 2 Nashville - 3 Austin - 4 Dallas-FW - 5 Kansas City - 6 OKC - 7 Indianapolis - 8 Wichita - 9 Tulsa - 10 Houston - 11 Memphis - 12 Little Rock - 13 San Antonio - 14 Albuquerque - 15 U.S. Oklahoma Ratio of Employment to Population % 58.6% percent 65.7% 65.5% 64.4% 63.9% 63.4% 62.8% 62.1% 62.1% 60.6% 60.6% 60.4% 60.2% 60.2% 55.7% 53.8% 0% 20% 40% 60% 80% Houston - 1 Dallas-FW - 2 San Antonio - 3 OKC - 4 Austin - 5 Tulsa - 6 Memphis - 7 Indianapolis - 8 Nashville - 9 Kansas City - 10 Denver - 11 Little Rock - 12 Omaha - 13 Wichita - 14 Albuquerque - 15 U.S. Oklahoma % change % -1.2% -1.3% -1.5% -1.5% -1.8% -2.2% -2.7% -2.8% -3.0% -3.1% -3.5% -3.6% -3.9% -0.4% 0.5% 0.6% -8% -6% -4% -2% 0% 2% Source: Bureau of Economic Analysis, Census Bureau, and RegionTrack calculations 20

22 Strong growth in traded goods outside the region Earnings from Traded Activity per Worker Percent, seasonally adjusted Houston - 1 Wichita - 2 Tulsa - 3 OKC - 4 Dallas-FW - 5 Denver - 6 Omaha - 7 Indianapolis - 8 Kansas City - 9 Memphis - 10 San Antonio - 11 Little Rock - 12 Nashville - 13 Albuquerque - 14 Austin ,989 21,685 21,496 16,800 15,948 15,255 14,829 13,691 13,531 13,269 13,075 11,371 10,369 9,810 9,458 Tulsa - 1 Omaha - 2 OKC - 3 Houston - 4 Wichita - 5 Kansas City - 6 San Antonio - 7 Denver - 8 Memphis - 9 Little Rock - 10 Albuquerque - 11 Indianapolis - 12 Dallas-FW - 13 Nashville - 14 Austin - 15 % change % 52.5% 46.3% 43.0% 36.6% 31.2% 25.7% 25.6% 18.4% 18.1% 17.3% 17.2% 14.1% 12.5% 2.3% U.S. Oklahoma 14,234 18, ,000 20,000 30,000 U.S. Oklahoma 22.2% 55.3% -40% -20% 0% 20% 40% 60% 80% Source: Bureau of Economic Analysis and RegionTrack calculations 21

23 Extremely strong capital spending Houston - 1 Tulsa - 2 Denver - 3 Dallas-FW - 4 OKC - 5 Omaha - 6 Kansas City - 7 Indianapolis - 8 Nashville - 9 San Antonio - 10 Austin - 11 Memphis - 12 Wichita - 13 Little Rock - 14 Albuquerque - 15 Fixed Capital per Worker Percent, seasonally adjusted , , , , , , , , , , , , , , ,728 OKC - 1 Tulsa - 2 Nashville - 3 Omaha - 4 Wichita - 5 San Antonio - 6 Kansas City - 7 Austin - 8 Denver - 9 Little Rock - 10 Dallas-FW - 11 Houston - 12 Memphis - 13 Indianapolis - 14 Albuquerque - 15 % change % 95.2% 68.2% 67.8% 62.3% 56.5% 56.0% 52.9% 51.8% 50.6% 45.6% 42.9% 41.3% 35.5% 27.2% U.S. Oklahoma 208, , , , ,000 U.S. Oklahoma 52.4% 88.3% 0% 50% 100% 150% Source: Bureau of Economic Analysis, Census Bureau, and RegionTrack calculations 22

24 6. What do Evaluations of Tulsa Tech Programs Suggest about Performance? 23

25 Tulsa Tech has a long history of quantitative program evaluation efforts Evaluation efforts should (where possible): 1. Provide a thorough cost-benefit assessment 2. Consider costs to: students, taxpayers, and Tulsa Tech 3. Consider benefits to: students, firms, taxpayers, and the broader regional economy 4. Focus on income creation to the student and within the regional economy 24

26 What happens to students following training? Career and technology training produces: 1. Faster entry into the labor force 2. Immediate wage gains 3. Faster income growth over work-life 4. Faster growth in non-earned income 5. Higher retirement income 6. Other labor force benefits 7. Social benefits 25

27 Evaluation of Career Majors is Very Positive Tulsa Tech s 2,755 Career Major completers from the FY11 cohort: 1. Will earn an estimated $1.35 billion in added lifetime earnings as a result of the training 2. Present value (PV) of the gain is $524 million 3. 18% of all income gains across CareerTech system 4. About two-thirds will be earned in Oklahoma 5. Will generate $23.9 million in future tax revenue (PV) 6. PV of lifetime gain per completer is $190,190 26

28 Other areas produce favorable cost-benefit ratios Have examined BIS programs statewide since the early 2000s, large net benefits generated Adult training programs continue to fill a range of needs for micro training OBAN clients continue to win significant contracts 27

29 Observations on Tulsa Tech s Role in Local Economic Development and Growth 1. Tulsa Tech s activities are consistent with research 2. It still pays to seek the types of education and training offered by Tulsa Tech 3. Tulsa continues to lag in overall education gains but remains a relatively high-income region 4. Low education is being compensated for by strong growth in other channels (energy, manufacturing) 5. Cost-benefit analysis of Tulsa Tech programs shows very positive economic outcomes 28

30 Economic Growth and Tulsa Tech 29