Intro to Business. Dr. James Ramsey, President, University of Louisville

Transcription

1 Intro to Business Dr. James Ramsey, President, University of Louisville December 3, 2015

2 2 First

3 3 Central High School is important to us 201 Current students from Central 34 first time freshmen 90 students from Central High School received $760,695 Scholarships for the 15-16AY Principal Raymond Green

4 4 But today... I am just an economics teacher!

5 5 A look at our economy and relationship to education The Economy - U.S. - KY The state budget Importance of education

6 I always begin with: Some dots and a triangle 6 h"p:// h"p://quickfacts.census.gov/qfd/states/00000.html

7 7 So a quick review of some economic concepts The full Employment Act of 1946 Economic Real GDP Growth - GDP Boom Peak Recession Boom Peak Recession Boom Peak Trough Trend Trough The business cycle Time While there are ups/downs in economic activity, we hope that over time the economy is on an upward trend

8 The U.S. economy since passage of Post Secondary Education Improvement Act Percent The Great Recession! Updated Next release date December 22, 2015

9 9 Our 11 post WWII recessions Name Dates Duration Decline in GDP Peak to trough The Great Recession Dec Jun year 6 months -4.3% Early 2000 s Recession Mar Nov months -0.3% Early 1980 s Recession Jul Mar months -1.4% Early 1980 s Recession Jul Nov year 4 months -2.7% 1980 Recession Jan Jul months -2.2% Recession Nov Mar year 4 months -3.2% Recession of Dec Nov months -0.6% Recession of Apr Feb months -1.6% Recession of 1958 Aug Apr months -3.7% Recession of 1953 Jul May months -2.6% Recession of 1949 Nov Oct months -1.7%

10 I focus on how many people have jobs Kentucky s economy has been a challenge The Great Recession October Updated

11 Kentucky Manufacturing Employment Good paying jobs The Great Recession October Why Important? WAGES! 11 Updated

12 Just a little comparison October 2015 U.S. KY Jobs Lost 8,716, ,600 Jobs Regained 13,005, ,500 % of Jobs Regained 149% 140% May 2014 the U.S. regained the jobs lost in the recession October 2014 KY regained the jobs lost in the recession 12 National - Updated National data Updated KY data

13 Why are we interested in jobs? State Finances - Kentucky General Fund FY 2015 budget $9.801B Sales Tax $3.15B 73% Income Tax $3.97B 13 National - Updated National data Updated KY data

14 And if how you spend money is a reflection of what s important ( ) 70.0% 60.0% 63.5% 50.0% 40.0% 30.0% 41.9% 32.8% 20.0% 10.0% 10.0% 15.3% 0.0% -10.0% -20.0% Very Modest! State Revenue Growth Public Pensions Medicaid Debt Service CorrecOons/Adult Prisons -1.0% -14.0% K-12 Base Higher Ed So! Source: Governor's office 14

15 15 So let s think about it Education funding is being cut when We live in a new economy /knowledge based Human capital... Microsoft / Google / Apple / LinkedIn Global economy Paradigm shift Jobs follow people Richard Florida Creative Class 3T s

16 16 Importance of ideas/brainpower Rank Company Name Market Cap ($B) 1 Exxon Mobil Apple Google Berkshire Hathaway MicrosoW Johnson & Johnson Wal-Mart General Electric Chevron Wells Fargo

17 Education is Important! U.S. Unemployment Rates 8.0 Unemployment rate October U.S. National Unemployment Less than H.S. Diploma H.S. graduate, no college Some college or Associates BA or Higher 17 Updated

18 Earnings and unemployment rates by educational attainment Updated

19 19 Most importantly four major public policy priorities we should have- EDUCATION EDUCATION EDUCATION EDUCATION

20 Finally Let s return to our 49 dots & 1 triangle $60,000 Per Capita Income in All 50 States vs. Adults with Bachelors Degrees or Higher (2013) $55,000 Per Capita Income (dollars) $50,000 $45,000 $40,000 U.S. $44,543 $35,000 $30,000 KY $ % U.S. 28.8% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 20 h"p:// h"p://quickfacts.census.gov/qfd/states/00000.html

21 21 Again! - Continue your education - Remember: jobs of the future Higher education more important than ever

22 22 Questions