A good economy and the role of higher ed

John Kooti

The U.S. economy continues to grow at a healthy rate, and in the first half of 2018, hiring has been better than expected. The growth in the economy has been mainly fueled by job gains in retail, professional and business services, manufacturing, and in health care and social assistance. 

In the last seven months, U.S. employers added an average of 215,000 jobs a month to payrolls compared to an average of 184,000 added during the same period of 2017. In July, manufacturing added 37,000 jobs, with most of the gain in the durable goods industries. Overall, manufacturing has added 327,000 jobs in the last 12 months. The U.S. Bureau of Labor Statistics reported job openings at the end of July reached 6.9 million, a new milestone. Job openings increased in finance and insurance, and durable manufacturing.

In August, the economy added 201,000 jobs, and the unemployment remained at 3.9 percent, according to data released by the U.S. Bureau of Labor Statistics. The news was equally good for minority workers. The unemployment rate among African-Americans was at 6.3 percent in August, compared to 7.9 percent in the same month of 2017. Hispanics also saw gains, with a 4.7 percent unemployment in July compared to 5.2 percent in the same month of last year.

Nationally, the real GDP is also up from last year, as much as 4.2 percent in the second quarter of 2018, according to the the Bureau of Economic Analysis.

The region hasn’t been left out of the good news. Pennsylvania, Maryland and West Virginia, mirror the national economy. The Bureau of Economic Analysis estimated first quarter growth at 3.0 percent in Pennsylvania, fueled by gains in mining, construction, manufacturing, transportation and warehousing, information, and finance and insurance. The economies in Maryland and West Virginia show similar vitality.

Shortages in skilled labor continue to threaten business expansion. Government, private sector and higher education collaborations will be vital to sustain long-term economic growth.

The Franklin County Area Development Corp. released survey results showing 84 percent of the companies responding plan to hire and make a capital investment in 2018. In August, Franklin County industries sought 3,588 employees, while only 2,700 workers wanted jobs, a shortage of 888 workers. Area employers suffer from a shortage of skilled labor, a technical workforce, difficulty in recruiting general labor, and government regulations.

Of the top 20 occupations, most require business degrees including general management (No. 3), accounting and auditing (No. 4), marketing research analysis and marketing (No. 5), finance (No. 6), management analysis (No. 8), business operations (No. 10), information systems (No. 18), and personal financial planning (No. 20).

Shippensburg University, with its nationally accredited John L. Grove College of Business, of which I’m dean, is already preparing students for each of those eight specialties.

And, to brag a little, the program is among the top in the country. Shippensburg University accounting degree recipients are in the top 40 programs in the nation for passing the CPA exam for first time takers. The supply chain management program is one of the most successful undergraduate programs, with an estimated 100 percent job placement within three months after graduation. The MBA degree program is ranked in the top 267 Association to Advance Collegiate Schools of Business accredited programs by Princeton Review 2018 edition.

What’s more, these jobs pay better than those not requiring degrees.

Public colleges and universities help drive the economy in many ways, but perhaps most significantly by preparing people for workforce needs.

 

John Kooti is a professor of finance and dean of the John L. Grove College of Business at Shippensburg University. His email is JGKooti@ship.edu.