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Labor shortage could trim state’s ambitions

By Josh Richman
Wednesday, May 23rd, 2007 at 2:23 pm in Arnold Schwarzenegger, General, Sacramento.

California probably won’t be able to attract enough college-educated workers from other states and nations to meet current, skill-driven economic projections, and so might have to rein in its expectations about what the economy will look like in 20 years, according to a new Public Policy Institute of California study released today.

The study projects that by 2025, only 32 percent — yes, still fewer than one in three — of the state’s working-age adults will have a college degree; that’s up from 31 percent in 2005. Yet the latest economic projections show more than two of every five jobs (41 percent) will require a college degree by then, up from one third in 2005. “The workforce of 2025 will be skilled, but not be as skilled — and the economy not as productive or high-income — as current projections imply,” says PPIC research director and economist Deborah Reed.

Bringing in out-of-state workers seems like a dicey proposition, the study says: Net gains in skilled workers from other parts of the U.S. have lessened in the past decade, even going negative, because California is less and less able to retain its own home-grown college graduates. That is, while 612,000 college-educated people came to California between 2000 and 2005, 658,000 college-educated Californians moved out of the state during that time — a net loss of 46,000. And the arrival rate of skilled workers from other countries would have to more than double in order to meet the projected economic demand.

So what’s to be done? The state must redouble its efforts to raise college entrance and graduation rates, the study concludes. “Public policy has a critical role to play because the vast majority of California’s college student are attending public institutions,” says PPIC research fellow and demographer Hans Johnson. “The state has significant latitude to implement policies that could directly address participation and completion rates — and if there was ever a time to do that, it’s now.”

But, in keeping with Gov. Arnold Schwarzenegger’s proposed 2007-08 budget, the University of California Regents in March raised student fees by 7 percent starting this summer; the California State University Board of Trustees raised their student fees 10 percent. And the governor’s proposed budget eliminates state support for outreach programs.

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