American communities earn their success by degrees

Published 1/31/06

Civic prosperity this time around will require some study. It will take a new mentality toward human capital. It will force us to be more responsible for our children’s education. It will make us all students of the global economy. And if economic revitalization happens in Anderson, it will happen by degrees.

That’s the conclusion I’ve drawn from the results of the Census Bureau’s American Community Survey released a couple weeks ago. That survey shows a strong correlation between economic vitality and educational achievement in major U.S. cities. From a list of America’s 20 most educated cities, as defined by the percentage of residents with bachelor’s degrees or higher, more than half are also listed among the country’s most prosperous cities, as defined by median household income.

Perhaps a chart would be in order, showing how the top five cities rank in terms of 1) the city's education rank, 2) the percentage the city's population that holds undergraduate and graduate degrees, 3) the city's median household income, and 4) that city's rank, according to median household income…

1. Seattle, Wash. 51.3% $46,650 (8)
2. San Francisco, Calif. 51.0% $60,031 (2)
3. Raleigh, N.C. 49.7% $47,878 (7)
4. Washington, D.C. 47.7% $46,574 (9)
5. Austin, Texas 45.1% $45,508 (15)

Driving these statistics is the fact that college graduates earn an average of nearly $2.1 million in their lifetimes, nearly twice as much as those with a high school diploma only. So a city such as Seattle, where more than half of the residents earn college degrees, is naturally going to be the home of a resilient economy and employers like Intel, Microsoft and Amazon.com.

Since only major cities were used, let’s drop down to the city closest to Anderson, the 41st city on the Census Bureau list…

41. Indianapolis, Ind. 26.2% $39,815 (35)

Indy is just a tad above the national college graduation rate of 25.9 percent. However, in a state-by-state comparison, Indiana finishes 45th in college grads, with only 21.5 percent holding college degrees compared to a state average of 27 percent. This statistic deserves an asterisk, though, because Indiana has always been a big producer of college grads. It’s just that they employ their degrees in places like Seattle, San Francisco, and D.C.

Although Anderson does not appear on the American Community Survey list, the U.S. Census Bureau says 13.2 percent of the population in this community hold college degrees and calculates the community median household income at $32,000.

So what are our options? We could secede from the state of Indiana and move to either the Washington on the west coast or the Washington on the east coast. Or we could learn from these cities and our neighbors to the southwest. Just minutes from us are three communities that, at least from all appearances, have done their homework on the subject of economic development. I’m referring to Noblesville, where 40 percent of the population holds college degrees, Carmel, which has a 58 percent graduation rate, and Fishers, with a 60 percent rate, according to Census figures. I won’t quote median incomes because, well, the numbers are tempting.

Of course, today I’m guilty of using a college degree as a financial carrot, something for which Socrates will never forgive me. But what I’m thinking about is how CEOs see us when they inquire about our workforce.

As the American Community Survey put it, “Just as a well educated individual has a leg up in the workforce, high educational achievement among a city’s population seems to give it clear advantages in developing its civic and financial health.”

At the end of the 20th century, Case Western Reserve University’s Weatherhead School of Management tracked per capita income among the most educated and the least educated metropolitan areas. Between 1980 and 1998, the most educated cities grew from 12 percent above the national average to 20 percent in average income. Cities with the least education dropped from 3 percent below the national average to 12 percent below. Most interesting was the fact that several cities reversed downward trends and improved their ranking over the 18-year period.

So how do we become a “go to” city instead of a “go by” city or more than a Cracker Barrel stop between Indianapolis and Ft. Wayne?

Don’t be surprised if we have to earn it one degree at a time.