Saturday, January 12, 2008

Generation Iowa Report Calls for Cutting Debt, Higher Wages

Iowa is facing a worker shortfall. However, Iowa is a net importer on the number of college students, but has failed to keep these young people in the state after graduation.

Yesterday, the Generation Iowa Commission released their report on ways to stop Iowa's brain drain and keep young people in the state. The report calls for cutting the amount of student loan debt and for ways to increase wages.

The report recommends...

- A higher-education tax credit. Iowans who have earned degrees in the past 10 years should be provided an annual income tax credit of $1,500 for bachelor's degrees and $2,000 for a graduate or professional degree.

- A targeted student-loan repayment assistance program. Students graduating in "critical need professions" should receive loan repayment assistance three times over 10 years, ranging from $1,000 to $5,000.

- Change Iowa's economic development incentives to require higher salaries. Iowa should stop including the value of employee benefits, such as health insurance, when meeting pay requirements for state incentives and look only at salary, the group said. "A company can claim to be paying above average wages, when in fact the take-home pay is lower than comparative jobs."

Recommendations also addressed issues such as matching young workers with careers and improving Iowa cities and towns:

- Create a merit-based scholarship program with residency expectations. Attracting and retaining the nation's best students could help "drive explosive growth."

- Eliminate or limit "noncompete" contract clauses in state government and private businesses. The group said the clauses "inhibit competition in the work force and drive top, young professionals out of state to start businesses or further their career."

- Create or support an online statewide job and internship exchange.
I agree with many of the groups recommendations. I have pointed out many times that student loan debt is driving Iowa's brain drain. These recommendations would be a great start to keep young Iowans to stay in the state.

I wish the group would have mentioned ways to stop rising tuition rates at Iowa's colleges and universities that causes the large amount of student loan debt.

10 comments:

bgunzy said...

Yes, the rising tuition costs are a burden, but students need to take responsibility for their debt. Taking out mounds of debt for a social worker degree is not smart.

Can't agree with the non-compete clause - As a business owner I wouldn't want to train someone with the inner workings of my business, only to have them leave, copy, and compete with me after I gave them on the job training.

Maybe government should reduce its burden on employers in the form of reduced/easier to file taxes and lower intrusion/regulation. That way employers can compete to pay the best for their workers.

I spent 9 years at ISU getting three degrees and am still in Iowa. I didn't need some government funded incentive to stay here. I figured out a way to do so and be happy about it. Maybe the crybabies on the Generation Iowa Commission should look into individually making Iowa a place for others to stay instead of looking to Culver and Co to make the changes for them.

Ben said...

Humm...a little research led me to an interesting post about helping out a needy family in "the south of Iowa." I wonder if all those social workers who racked up debt might have something to say about charity?

bgunzy said...

Oh Ben, it must be nice to live in your world.

It goes back to personal responsibility. If you don't think you can hack it in a certain profession, don't go into deep debt trying to do so.

Charity is one thing, but personal responsibility should not be ignored. Charity is only worth something when it is given freely, not coerced.

noneed4thneed said...

bgunzy -

Your thinking is what has gotten Iowa into mess it is in. Iowa invests billions on education, yet the product of that cross the border and heads elsewhere. I don't think that is because of personal responsibility, but because of necessity.

The issue of student debt is complicated and can be traced back to the federal government cutting grants since the 1980's. Since financial aid has shifted from grants to loans, should students decide to not go to college because they want to be personally responsible?

bgunzy said...

Noneed says:
"The issue of student debt is complicated and can be traced back to the federal government cutting grants since the 1980's. Since financial aid has shifted from grants to loans, should students decide to not go to college because they want to be personally responsible?"

Yes, students should not go to college unless they have a reasonable way to pay for their education figured out. It's just like any other investment - you don't throw your time and money at something unless you can reasonably see it through and get a return on the investment.

Higher education is not a God-given right. There are some people out there that cannot deal with higher education, and therefore should not attempt it. There are some people that are qualified for higher education, but do not have all the means. They need to have a plan to pay for the education, through scholarships, work-study, and loans. It is possible to get a college degree and not have mounds of debt left over; you just have to work hard at it, and have a plan to do so.

It's called "personal responsibility".

Ben said...

Since the bottom line is all that seems to matter to Mr. Bgunzy, how about we look at it this way...

When compared to the Twin Cities, Chicago, or Kansas City, Iowa jobs pay crap and there aren't very many of them. When you factor in the lure of the coasts the fact is the best and brightest have little incentive to stay in Iowa. These are the people would have more disposable income to buy big houses, shop in our stores, and send kids to our schools.

The state is also facing a shortage of certain professions because while necessary they are not as economically attractive as other options. Attracting well trained teachers to poorer rural school districts is a good example.

It makes good economic sense too keep as many higher wage earners in the State as possible, and sometimes the only way to keep necessary services providers around is to bribe them.

bgunzy said...

"It makes good economic sense too keep as many higher wage earners in the State as possible, and sometimes the only way to keep necessary services providers around is to bribe them."

How about making it easier for businesses to hire and pay these employees? How about reducing the taxes on corporations? How about going to a flat rate? How about...any number of things that would improve the business climate in Iowa such that employers could pay top wages and not have to subsidize (bribe) new employees to stay here via higher taxes.

The point is...businesses are not going to pay top dollar for employees if it costs more to have them in this state.

noneed4thneed said...

bgunzy-

My question is about not every person that is qualified should be attending college. Is that good for our society? Don't we want to maximize the talents of our best and brightest, so our society can benefit from their creativity and labor?

What good is it for society to have a bright kid who did well in high school not being able to attend college because their family has fallen on hard times? That kid might become the doctor that operates on your family member, or your child's teacher, or the person that sells you your car insurance. The point is that a slight investment can have great benefits to everyone. No, it won't always work out, but more often than not it does. This isn't about personal responsibility, it is about our priorities and what is best for our society.

KL Snow said...

I realize I'm jumping in downstream, but one line here, from bgunzy, jumped out and screamed at me:

"Yes, students should not go to college unless they have a reasonable way to pay for their education figured out. It's just like any other investment - you don't throw your time and money at something unless you can reasonably see it through and get a return on the investment."

If we went by that, Iowa would never educate another teacher, nurse, social worker or journalist again. I think you'd miss them.

bgunzy said...

KL Snow - It makes sense that you have a plan before you make a big investment in something like education. A business doesn't (or shouldn't) spend money on a do-hickey machine without making sure they can pay for and profit from the do-hickeys they make. Students need to have a plan (in general, if not detailed) on how they will pay for their education.

NoNeed - Sure, there are bright students out there whose parents are not necessarily in the position to pay for their education. My wife was one of them. Guess what? She went to ISU, worked food service and other jobs, got nearly straight A's, recieved scholarships, and graduated with no student debt. She had a plan (and determination) to pay for her education, so that it would not burden her into the next century. To me, that's smart ('course, I'm biased).

This discussion translates into a greater debate - should government "prime" the economy, and should the government be in the economic development business (Vision Iowa)?

We had a local county economic development director come speak to our Chamber & Development annual meeting the other night. She provided many handouts on business assistance programs. While she meant well, I came to determine that if I took full advantage of these programs, I'd be tied down filling out forms and chasing grants when I should be running my business. The government, while meaning well, will further hamper your business development, IMHO. It's best to stay away from them altogether and not deal with the headache.