Monday, August 25, 2008

Push, pull and investing in 

I had seen reference to UW-Madison Chancellor John Wiley's valedictory in the Chronicle of Higher Ed and read it, but when Charlie Quimby referred to it I decided to respond to it. Charlie's title, "Competing for (and Investing in) High-Paying Jobs" is provocative insofar as he neatly encapsulates Chancellor Wiley's message. But Wiley is also complaining that his goals were frustrated by Wisconsin's business leadership. He begins...
Wisconsin has lost its way. We've lost touch with our traditions and values. Our politics has become a poisonous swill, and the most influential voice for the business community has been taken hostage by partisan ideologues.
...and goes on to single out a business group as the source of the problem:
According to WMC's website, the organization boasts nearly four thousand member companies and a goal of making Wisconsin "the most competitive state in the nation." Over the years, I've had the opportunity to closely examine the strategies--both the public rhetoric and actions--WMC employs to pursue that goal. Apparently, the organization's definition of being competitive is being among those states with the lowest taxes, lowest wages, and least regulation in the nation.
Here's the funny part of that list -- two of those three things are in the control of government. The third is a response to the other two, along with the attractiveness of the state to people with high-paying skills.

The value of a university (public or private) to its community or state is only in part its ability to create high-skilled workers. It creates educated citizens as well. It creates citizens that desire a good life for their families, with an understanding of what that good life is. As those families grow, parents impress upon their children the value of an education; they look for opportunities to add to their child's appreciation of the world and civilization.

As I listened to our own president's convocation speech last week, I was struck by the amount of marketing his administration engages in. Part of it is with government, and part with business leaders. And to do so means being accountable for what you use public and donated monies for, a point that was driven home for President Potter:

Recently after hearing me talk about my vision and goals for elevating the reputation of St. Cloud State, a local business leader asked me: �How will you know when you get there?� When I offered a detailed, �academic� response, he offered his own ideas�.which I like much better.

In order to succeed we must build a reputation as a place that cares about our students. If we do this, our students will come here because we care about them and help them achieve their dreams. Faculty and staff will come because they know it�s a great place to work. Donors will give because they want to be part of supporting a great university.

Students and business leaders will "pull" from universities those things they want, when it is offered to them in forms they can connect to. Chancellor Wiley's model is an attempt to push Madison onto the business community. It's not as if any of those Wisconsin business leaders are stupid regarding the value of high-skill labor. It is that he and his institutional leadership are pushing solutions without listening to the problems. And one of those problems is a tax system that leaves your high-skilled workers with a lower after-tax real wage, using those tax dollars to be invested in unaccountable public K-12 education systems or in wasteful transfer programs or even the odd public sports stadium or two (including our own National Hockey Center -- a discussion for another time, and one that will make our administration less happy than my approval of the quote above.)

High income families may wish to enlist others to help pay for goods they want and thus call them "public", but when push comes to shove, the thing they want most is a higher after-tax real wage. The one best suited to invest in any asset is the one who receives the return on it. To paraphrase Milton Friedman, the least efficient education is other people's money spent on the education of other people.

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