BIRMINGHAM, Alabama – How can Alabama land the economic equivalent of an Airbus passenger jet assembly line every year? The answer: Sharply increase the state’s high school graduation rate and maintain educational attainment at that level.
In an analysis that paints educational attainment gains in economic development terms, Auburn University at Montgomery economist Keivan Deravi figures that raising Alabama’s high school graduation rate to 90 percent would have an economic impact on par with a major industrial project.
Deravi, who has performed impact studies on many of Alabama’s most significant economic development projects, this year analyzed how the state’s economy would benefit from graduation rates reaching the level targeted in the State Department of Education’s Plan 2020. The rate is 80 percent today.
- Steady progress toward that goal of 90 percent would bring higher employment, earnings, and tax revenue because of rising educational attainment – and the gains would be compounded
- By 2020, if the goal is achieved, the state’s economic output would increase by $430 million as a result of this higher educational attainment, and revenues in the Education Trust Fund would rise by $22 million
- Each subsequent graduating class would add nearly 1,200 direct jobs to Alabama’s economy. Every class with a 90 percent graduation rate would collectively earn $68 million more annually than a class with an 80 percent graduation rate
“The effect would be similar to landing an industrial mega-project every year,” Deravi noted in a 2014 report prepared for the Business Education Alliance by the Public Affairs Research Council of Alabama.
The figures are roughly equivalent to the impact calculated by Deravi for the Airbus A320 Family Assembly Line now under construction in Mobile. The global aircraft maker will hire 1,000 workers for its Alabama production center, which will have a $409 million annual economic impact on the state, according to Deravi’s projections.
Deravi’s projections on the financial impact of Plan 2020 are entering the conversation at a time when education’s essential role in economic and workforce development is moving to center stage in Alabama.
The Alabama Workforce Council (AWC), appointed by Governor Robert Bentley, is examining ways to assist educators in their efforts to boost educational attainment and skills certification.
The business community’s involvement is seen as key to expanding career and technical education (CTE) initiatives, which keep high school students on track for graduation while providing them with valuable workplace skills. Alabama high school students involved in CTE programs have a very high rate of completion.
“It is important there is an open dialogue between industry and education,” said Zeke Smith, an Alabama Power executive vice president who chairs the council. “I am optimistic the council will make a difference helping our educational leaders develop a robust workforce that can step right in and fill the needs of industry and business.”