Community colleges — an absolutely brilliant investment

If something is clever, Brits say “brilliant.” But when something is really clever or outstanding, the phrase becomes “absolutely brilliant.” America’s community colleges ARE absolutely brilliant – by American or British economic standards.

The return on investment by community colleges is virtually unparalleled in the sphere of public resource economics. A new study conducted by Economic Modeling Specialists Inc. (EMSI), a CareerBuilder company, found the “net total impact of community colleges on the U.S. economy was $809 billion in 2012,” which represents roughly 5.4 percent of the U.S. Gross Domestic Product. Commissioned by the American Association of Community Colleges, the report confirms the enormity of the economic impact produced by America’s 1,200 community and technical colleges.

Why is this so “brilliant?” Well, for one thing, it proves beyond a shadow of doubt what high returns they yield on public dollars invested. According to EMSI, community colleges:

“received $44.9 billion in funding from the public sector. But community colleges generated $304.9 billion in taxpayer benefits — 6.8 times more money than their public funding. This means that for every $1 of public investment, taxpayers reap a cumulative value of $6.80 over the course of students’ working lives”.

American community colleges help millions of adults to enter or re-enter the workforce. The skills acquired through community colleges typically result in higher wages, and thus higher tax revenues – something all governments applaud. Increased earnings, tax revenues and consumer spending create multipliers throughout the economy, yielding equally important impacts such as improved health, lower crime, generational effects on educational attainment and aspirations.

American community colleges are similar to Britain’s colleges of further education. They are tied to business and employment needs and increasingly are more focused on local education and workforce needs. The economic impact and return on investment is significant and vital to Britain’s economic well-being, just as America is dependent upon its community colleges. That’s the good news.

The bad news is that despite the tremendous productivity of American community colleges, the percentage of public financial support has been declining for almost four decades. Increased enrollments, increased efficiencies and emerging career and technical fields have helped community colleges stay ahead despite capturing less public investment as a percentage of per-capita wealth. But now enrollment is falling and increasing efficiency can’t close the resource gaps entirely.

For society and governments to prosper, we need to funnel resources where they produce consistently high returns and reduce income inequity while boosting educational attainment and workforce productivity. The evidence is clear: America’s community colleges and Britain’s colleges of further education do all these things. America and Britain face similar challenges and have similar economic aspirations. That’s why the leaders of American community colleges and the British colleges of further education are engaging in trans-Atlantic conversations. What we can learn from one another will strengthen our two systems enormously. We need to make sure governments are listening to us.

J. Noah Brown is the president and CEO of the Association of Community College Trustees and the author of First in the World: Community Colleges and America’s Future. He is based in Washington, D.C.