Community and technical colleges added $20.5 billion to state economy, study shows
OLYMPIA, Wash. — A study released today shows Washington’s 34 community and technical colleges added $20.5 billion to the state economy in 2014-2015. That translated into about 321,549 jobs and 5.1 percent of the gross state product, according to the study by Economic Modeling Specialists International.
The study looked at spending by students, alumni and the colleges themselves. It then factored in the multiplier effect that occurs as money is spent and re-spent in Washington, turning every dollar spent into more than a dollar in economic activity.
Most of the added income — $18.7 billion — came from higher wages and increased productivity from alumni. This supported about 290,296 jobs. College operations added another $1.2 billion or 20,678 jobs, and student spending accounted for $612.1 million or 10,575 jobs.
The study also calculated the return on investment for students, taxpayers and society. Among the findings:
- For every dollar a student spends on a community or technical college education, that student receives $2.80 in higher future income. A student’s average annual rate of return is 12.8%.
- For every taxpayer dollar the state invests, it gets back $1.70 in tax revenues.
- Overall, for every dollar spent on colleges — whether from students, state and local governments or other Washington residents — society as a whole receives $5.70 in added state revenue and social savings. The savings come from reduced crime, lower unemployment, and better health and well-being across the state.
“It’s well known that community and technical colleges are economic drivers in our state, but it’s great to see this validation,” said Gary Oertli, chair of the college presidents’ association and president of South Seattle College. “This study clearly shows that students aren’t the only ones who benefit from community and technical colleges — we all do.”
Economic Modeling Specialists International is an independent research company that specializes in economic impact studies for leaders in higher education. The study was commissioned by the Washington State Board for Community and Technical Colleges. The study analyzed data collected from July 2014 to June 2015.
The report comes as the community and technical college system prepares to celebrate its 50th anniversary in April. Each year, about 381,000 students train for the workforce, prepare to transfer to a university, gain basic math and English skills, or pursue continuing education. College students and alumni increase the state’s quality of life and economic vitality as entrepreneurs, employees, consumers and taxpayers.
“Our community and technical colleges serve every community across the state,” said Oertli. “Even in these challenging budget-writing years, the state must invest in higher education—our students, our employers and the state’s economy depend on it.”
The full study, supporting documents, an infographic and a video are available at: EMSI Economic Impact Study.