BRAIN POWER
PUBLIC SCHOOLS
AND THE
ECONOMIC FUTURE OF
SOUTHEASTERN WISCONSIN
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
© Copyright 2007, NorthStar Economics, Inc. All rights reserved.
Mission:
To promote world class schools
through research, advocacy,
and public policy for the
benefit of students and the
economic vitality of the region.
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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 33 urban and suburban public
school districts in SE Wisconsin
 240,000 students enrolled in SWSA
schools
 30% of the total public school
June 1,
2007
enrollment in Wisconsin
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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How public schools drive
the New Economy
in Southeastern Wisconsin
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Research shows that
education impacts:
 Income Level
 Economic Vitality
 Social Costs
 Quality of Life
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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EVOLUTION OF ECONOMIC PROSPERITY
IN THE UNITED STATES

19th Century –
 Bigger and Better Farms

20th Century –
 Bigger and Better Factories

21st Century –
 Bigger and Better Ideas
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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THE NEW ECONOMIC EQUATION
IN A KNOWLEDGE-BASED ECONOMY
BRAIN
POWER
=
EARNING
POWER
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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MEDIAN EARNINGS
BY EDUCATIONAL ATTAINMENT
2005
June 1,
2007
Median Earnings
Some High School, No Diploma
$ 21,268
High School Graduate
$ 30,316
Some College, No Degree
$ 33,956
Associate Degree
$ 36,348
Bachelor’s Degree
$ 48,724
Master’s Degree
$ 58,708
Doctorate / Professional Degree
$ 72,500
Source: U.S. Department of Labor, Bureau of Labor Statistics
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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LIFETIME EARNINGS GAP*
No HS Diploma vs. High School Graduate
-$443,352
Bachelors Degree vs. High School Graduate
+$1,102,500
Advanced Degree vs. High School Graduate
+$2,224,824
June 1,
2007
*Note: People working to age 67
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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MEDIAN FAMILY INCOME
BY EDUCATIONAL ATTAINMENT
Education = Earning Power
June 1,
2007
Source: U.S. Census Bureau
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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MEDIAN FAMILY INCOME
BY EDUCATIONAL ATTAINMENT
Education = Earning Power
15%
9th-12th Grade,
No Diploma
High School
Graduate
5%
Some
College
Bachelor’s
Degree
- 12%
- 31%
June 1,
2007
Source: U.S. Census Bureau
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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How educational attainment
affects a state’s economy
Wisconsin Manufacturing Employment
650,000
625,000
600,000
575,000
550,000
525,000
500,000
475,000
450,000
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
*
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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PER CAPITA INCOME
June 1,
2007
2005
Income
Rank
Educational
Attainment Rank
Minnesota
$ 37,322
10
11
Illinois
$ 36,264
14
15
United States
$ 34,495
n/a
n/a
Wisconsin
$ 33,252
22
33
Michigan
$ 32,735
25
34
Iowa
$ 31,795
31
37
Source: U.S. Department of Commerce, Bureau of Economic Analysis
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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PER CAPITA INCOME
Wisconsin has not slipped
(or improved) in rank in
the last 40 years because of:
1. A diversified economy
2. Better retention of manufacturing jobs
3. A boom in capital goods and exports
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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EDUCATION / ECONOMIC DECLINE
WHAT COULD HAPPEN TO WISCONSIN
Per Capita Income Manufacturing
Intensity Rank*
Rank
June 1,
2007
1965
2005
2005
Michigan
10
25
6
Indiana
17
35
1
Iowa
20
31
5
Wisconsin
23
22
2
Minnesota
24
11
14
Source: U.S. Department of Commerce, Bureau of Economic Analysis
* Percentage of State’s Non-Farm Employment in Manufacturing - Source: U.S. Census Bureau
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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TOTAL PERSONAL INCOME GROWTH IS TIED
TO EDUCATIONAL ATTAINMENT
% Change in
Personal Income
from 1995-2005
(2005 Estimate)
Milwaukee
43%
26.4%
Waukesha
67%
37.2%
Dane
76%
43.7%
Wisconsin
60%
25.0%
61%
21.1%
County
% College
Educated
Wisconsin
June 1,
2007
(all counties except
Milwaukee,
Waukesha, & Dane)
Source: Bureau of Economic Analysis Regional Economic Accounts
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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The Economic Role of
SWSA Public Schools:
 Economic Impact
 Human Capital Impact
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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SWSA
Region Public Schools

Staff
Spending
School
.
Operations
Visitor
Spending

Direct
Economic Impact
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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SWSA REGION PUBLIC SCHOOLS
Direct Economic Impact
in 2004-2005:
$2.22 billion
Spending benefits
Main Street businesses
and jobs.
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Multiplier Effect:
Direct spending multiplies
its impact as businesses
reinvest and their employees
buy goods and services.
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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SWSA
Region Public Schools

Staff
Spending
School
.
Operations
Visitor
Spending

Direct
Economic Impact

Economic Multiplier

June 1,
2007
Total
Economic Impact
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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SWSA REGION PUBLIC SCHOOLS
Total Economic Impact
in 2004-2005:
$4.26 billion
June 1,
2007
By comparison, the economic impact of
UW-Madison was $4.7 billion in 2002.
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Jobs:
Actual Public School
Employment of SWSA Region
Public K-12 Schools
30,537 Jobs
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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SWSA Public School
spending generates an
additional
42,407 Jobs*
*Full time equivalent jobs
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Total jobs related to the
economic impact of SWSA
Public Schools:
72,944 Jobs*
*Full time equivalent jobs
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Human Capital Impact:
SWSA public schools’
most important role –
 Educating students
 Building human capital
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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QUALITY OF LIFE
The higher the education
level, the higher the quality
of life. Educated people:
 Are more productive
 Live longer
 Are healthier
 Earn higher wages
 Contribute more to their
June 1,
2007
communities
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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BUILDING BRAIN POWER
IN SOUTHEASTERN WISCONSIN
To compete in the New Economy,
SE Wisconsin needs more brain
power and human capital.
2005 Graduates of SWSA Schools
- On to 4 Year College
- On to 2 Year College
- On to the Military
June 1,
2007
18,219
9,893
4,207
359
80%
of
graduates
Source: Wisconsin DPI
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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BUILDING BRAIN POWER - WI PUBLIC SCHOOL
ADVANCED PLACEMENT PARTICIPATION
Public schools help students earn college credit
while in high school.
June 1,
2007
Source: CollegeBoard
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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BUILDING BRAIN POWER
Growth Areas in the
SE Wisconsin Economy:
 Medical imaging, research,
technology and software
 GE Medical
 Advanced manufacturing technologies
 Johnson Controls  Modine Manufacturing
 Harley Davidson
 Financial services and software
 FiServ
 Metavante
 Northwestern Mutual
 Money management services
June 1,
2007
 Baird
 Artisan
 Nicholas
 Heartland
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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BUILDING BRAIN POWER
Education: Action to
Support the New Economy
 Regional Initiatives
 MPS/GMC Strategic Plan
 M-7 - Regional Economic Plan
 CESA 1 - Learning for the 21st Century
 SWSA - Economic/Human Capital Impact
 Second Chance Program
 Project Lead the Way
 State Initiatives
 Legislative Efforts
June 1,
2007
 The Wisconsin Covenant
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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THE LIFETIME ECONOMIC COST OF
NO HIGH SCHOOL DIPLOMA
June 1,
2007
$425,256
$127,000
Costs
$552,256
Per Person
Lost Income
(Lost tax revenue,
higher health, safety
and welfare costs)
Source: NorthStar Economics, Inc.,
Teachers College, Columbia University
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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THE ANNUAL ECONOMIC COST OF
NO HIGH SCHOOL DIPLOMA
144,383
x
$10,553
People in SE Wisconsin*
without a high school
diploma
Annual cost per person
$1.5 Billion Total Annual
Economic
Cost / Drag
June 1,
2007
*
Residents over the age of 25 of Kenosha, Milwaukee, Ozaukee,
Racine, Walworth, Washington, & Waukesha Counties
Source: United States Census Bureau, American Community Survey (2005)
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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What SE Wisconsin needs
for a prosperous future:
 Brain Power
 Highly skilled / educated workforce
 Accelerated economic growth
 Strong schools, colleges,
and universities
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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What public schools can do
to boost the SE Wisconsin
economy:
 Increase the number, preparation
and success of students attending
post-secondary institutions
 Continue to increase high school
completion rates
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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The Linkage:
The economic future of SWSA public
schools depends on a strong
SE Wisconsin economy.
A strong SE Wisconsin economy
depends on strong public schools.
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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The Challenges Ahead:
 Strong public support for public
schools
 Public school/business partnerships
to build brain power in SE Wisconsin
 Education for students, teachers, and
the public on the continually changing
New Economy
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Investing in public
education yields:
 Direct economic benefits
 A more competitive regional
economy
and
 The brain power for a productive
SE Wisconsin workforce
June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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June 1,
2007
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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Research provided by:
 David J. Ward, Ph.D., President
June 1,
2007
 Web: www.northstareconomics.com
BRAIN POWER: PUBLIC SCHOOLS, AND THE ECONOMIC FUTURE OF SOUTHEASTERN WISCONSIN
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