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Home ownership drives personal wealth

A new report by the National Association of Realtors (NAR) suggests that home ownership is increasingly related to personal wealth gains. To afford the median household in the US, a person must make about $107,000. That’s up from $88,000 last year.

Home ownership is the primary driver of personal wealth in the United States. A homeowner can expect to see his or her personal wealth increase by as much as 40 times that of renters. The average age of the first-time home buyer is now 35 years. That’s a slight drop from last year when the average age at the first home purchase was 36.

The high cost of home ownership acts as a barrier for lower income individuals. It also virtually guarantees that people who earn an associate degree or less will not make enough money to purchase a home. An associate degree is now a guarantee that the holder will remain in poverty for years or decades.

That’s not much of a sales pitch, is it?

Of course, it’s not, but inexplicably, that’s what community colleges are leading with. When two community college graduates pool their personal wealth, they still fall short of the needed capital to buy a home.

There is a solution to this: community colleges must focus on creating programs that open jobs in high-wage industries. They must build programs that train people for high-demand, high-wage jobs. Stop wasting resources on degrees and certificates that will never allow people to make a living wage.

Community colleges have adopted this absurd position that any job is better than no job. Unfortunately, that’s not true. If you go to school and earn a degree in something, you should rightfully expect that degree to lead you to a living wage job.

Personal wealth unattainable with associate degrees

The absurdity of this “rapid training” approach does not consider the realities of today’s job market, where jobs are plentiful and workers are scarce. Prospective employees with a high school diploma can expect to earn an average of $17 per hour. According to November 8, 2023 data collected by ZipRecruiter, the range of the pay scale for a high school graduate in Michigan is $13.30 (25th percentile) to $21.53 (75th percentile). Annualized, that’s $27,664 to $44,782. According to data collected by the State of Michigan, the average annual starting salary for a person with an associate degree is less than $40,000.

When a high school graduate can go into the job market and get a position that pays nearly $45,000 per year, an associate degree had better net a salary of $56,000. If it doesn’t, it’s not worth the time and effort it takes to earn that degree.

The job market has shifted. The notion that we must get minimally trained people into the workforce quickly is not only outdated by three to four decades, but also, it’s just plain wrong. And unless the employer is paying the entire cost to have a prospective worker trained, the community college’s focus should be on the needs of the student who is paying the bill for his or her education. The employer’s needs should be secondary.

During an economic upswing, community colleges should be developing new programs in preparation for the next economic downturn. For some reason, that didn’t happen, and many community colleges have been caught flat-footed.

We need Trustees who understand their roles

While it is the responsibility of the Administration to prepare the college for changes in the economic cycle, it is up to the Board of Trustees to ensure that these preparations are being made. At WCC, the Board of Trustees has seemingly devoted itself to figuring out how to spend money the taxpayers have provided for education on other things: fitness centers for the public, hotels, and conference centers come to mind. By not insisting that the Administration use our tax dollars to prepare the institution for this massive change, the Board of Trustees has effectively robbed the community of the opportunity to future-proof itself.

In November 2024, the voters once again can elect new Trustees – hopefully ones who understand their role on the Board. Right now, the WCC Board of Trustees routinely fails to hold the Administration accountable for its missteps and bad decisions. That’s why WCC has more Vice Presidents than a statewide community college system.

It is time to elect Trustees who understand their role as overseers of the public’s resources.

Photo Credit: 401(k) 2012, via Flickr