If you need a reason to pay closer attention to the actions of the WCC Administration and the WCC Board of Trustees, the Chicago Fed might help out. The Federal Reserve Bank of Chicago released a report last month entitled, “Defining the Factors that Influence Extreme Wealth Inequality in America.” The report is part of the Chicago Fed’s Economic Mobility Project. It examines the wealth gap among Black, Hispanic, and White households between 1989 and 2019.
Using data from the Survey of Consumer Finances and the US Census Bureau, the researchers found that total net worth of White households in the US was nearly 8 times as large as the average total net worth of Black households. White households had a net worth that was nearly 5.25 times as large as the average Hispanic household.
Over the course of two decades, the net worth of White households increased by 15%. The average net worth of Black households increased by 78%. Hispanic households saw a net worth increase of 40%. Black households saw a net worth increase of more than 78%. Despite these gains, the wealth gap persisted among the racial groups the Chicago Fed studied.
No single factor creates the wealth gap, but a range of factors combine to create persistent barriers to economic mobility for racial minorities in the US. These include lower household incomes; higher rates of unemployment; lower rates of homeownership; lower retirement savings; and higher educational debts.
WCC should strive to eliminate wealth gap
The consequences of the wealth gap are significant. Lower household income drives rates of homeownership lower; reduces retirement savings; and increases educational debt.
So, when we have a community college administration (with the help of a supportive Board of Trustees) that converts the institution from a school that issues predominantly two-year degrees to one that issues predominantly non-degree certificates, that reduces the post-graduation income of WCC graduates.
According to data from the Department of Education, ten years after enrolling at WCC, the institution’s former students don’t make significantly more money than high school graduates do. That’s a problem because some of these people have taken on debt to pay for their WCC studies. Worse, the average WCC graduate’s salary a decade after first enrollment isn’t large enough to enable them to live in Washtenaw County. In other words, the county taxpayers are subsidizing educational programs that neither raise incomes significantly, nor secure Washtenaw County residency. We are paying people to go away.
As a county, we need WCC’s educational programs to prepare students for high-wage careers. We also need them to build capacity in Washtenaw County to attract new employers and industries. Instead, WCC offers cheap certificate programs that marginally prepare students for low-wage jobs. This perpetuates – rather than eliminates – the wealth gap.
That’s a poor return on our multi-billion dollar investment in higher education, wouldn’t you say?
Photo Credit: Bruce Krasting, via Flickr
