US municipal finances: Education becomes a battleground

By:
Helen Avery
Published on:

In Brownsville, southwest Texas, on the border with Mexico, unemployment is 11.1%. The city has a workforce of 160,000 but 40% do not have a high-school diploma.

Pat Hobbs is the head of Texas Workforce Solutions in Cameron County – responsible for helping place the 17,000 unemployed workers around Brownsville. It is one of the poorest regions of Texas, with a median household income of around $25,000. Many of the communities around Brownsville live below the poverty line. Hobbs sees the boom in energy that Texas is enjoying, and the efforts to increase manufacturing, but he has one problem: "Our workforce is not qualified."

"The jobs are coming to Texas, but we are not as prepared as we should be," adds Joe Medrano, who works with some of the impoverished communities of Brownsville at Start Center. Hobbs says it takes two years to prepare a workforce for the arrival of a large industry and he is trying to work with companies and local community colleges to implement tailored training programmes. "Academia has been pushed so much, but in some communities where investment in junior and high school educations has been lacking, four-year degrees are not the route to a job. Instead, here we need more practical programmes working with community colleges to just get people out of unemployment. Then slowly over time we will have the money to invest in preparing our children for a college education."

Louisiana finds itself in a similar predicament. It is attracting manufacturing jobs, but has a large population that is unskilled and therefore remaining unemployed.

Stephen Moret is secretary of Louisiana Economic Development. "Business had often been hesitant to come here because of their perception of our workforce, so we started FastStart in 2008," he says. FastStart has a team of training and HR specialists that work with companies looking to start in Louisiana, and, at no cost to the companies, will customize the training of a workforce. It is hoped those initiatives will expand beyond the main metropolitan areas.

But if cities want a highly paid workforce, they will have to invest in education. Those with a college degree earn at least 65% more than those without. It’s an astonishing figure and one that has more than doubled since 1980. The growing wealth gap in the US, and indeed globally, is largely a result of this education differential. But it is a Catch-22 situation in some cases in that families often need to be able to save money in order to better educate their children. Alfreda Norman, community affairs officer at the Federal Reserve Bank of Dallas, says: "Children are seven times more likely to go to college if their family has been putting aside even just a little money." Texas has an initiative called Raise Texas that is a public/private organization that seeks to teach families how to build assets.