Underfunding schools heaps burdens upon businesses

Southeastern Pennsylvania may only constitute 5% of the state’s geography, but the region, which includes Bucks, Chester, Delaware, Montgomery, and Philadelphia counties, is responsible for 41% of the Commonwealth’s economic activity. But thanks to changes in workforce demographics and a neglected public education system, the pool of skilled workers is dwindling, as are hopes of future prosperity of not only the region, but entire state.

This week at a special panel discussion, business leaders called for a new game plan, sharing their insights on the high costs their businesses bear due to underfunded schools. The event took place at the iHeartMedia studios and was moderated by their News and Community Affairs Director Loraine Ballard Morrill.

“For any business, the number one input is always people and their strength is almost entirely based the quality of our schools and the education they provide, said panelist Todd Carmichael, CEO and Co-Founder of La Colombe Coffee. “Therefore, to have strong businesses and a strong economy, we must have a quality educational system that does not leave anyone behind.

In The Game Plan: A Regional Strategy for Strengthening Pennsylvania’s Workforce, a new report by PCCY, we draw an ominous portrait of PA businesses growing increasingly alarmed by the dearth of skilled potential employees with 80% of businesses reporting the available workforce is not meeting their needs.

Out of ten northeastern states, Pennsylvania ranks 9th in producing students that are prepared for college or work. That’s due in large part to our school funding crisis.

In Game Plan, PCCY finds local echoes in established research that access to better resources lead to better results. Radnor school district, for example, had double the amount of money to spend per student than Upper Darby did and, no surprise, saw double the result.

As a result, 21,000 students who entered 9th grade in 2013 weren’t prepared for a good job or weren’t prepared for college 4 years later.

That may explain why employers across the region spend an estimated $60 million a year to train or retrain employees.

“Education is not only the key to developing a skilled workforce, but it is also the key to our future livelihood,” explained Mike Diaz, CEO of Semper Utilities. “Understanding the connection between properly funding our schools and graduating students who have the skills needed to truly be successful is of the upmost importance.”

In order to remain competitive, businesses in the region must recruit the skilled talent the market demands, spending a significant amount of time and money to cast their nets wider and wider. Half of state businesses say they’ve lost between 50 to 500 hours of productivity to teach workers the skills they require, spending $189 million every year to do so. In this region, it is estimated that businesses are spending about $60 million dollars to train or retrain employees.

“Public schools are critical to preparing children for future careers, and underfunding means that many students graduate without the basic skills they need to succeed,” said Rachel M. Wilner, Senior Vice President of TD Bank. “We also know that strong public school systems attract families and companies to a region, so ensuring schools receive the funding they need is an investment in the future economy of our area.”