Intro to Business Dr. James Ramsey, President, University of Louisville December 3, 2015
2 First
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 But today... I am just an economics teacher!
5 A look at our economy and relationship to education The Economy - U.S. - KY The state budget Importance of education
I always begin with: Some dots and a triangle 6 h"p://www.bea.gov/newsreleases/regional/spi/2014/pdf/spi0314.pdf h"p://quickfacts.census.gov/qfd/states/00000.html
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
The U.S. economy since passage of Post Secondary Education Improvement Act Percent 9 8 7 6 5 4 3 2 1 0-1 -2-3 -4-5 -6-7 -8-9 The Great Recession! 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2.1 8 http://www.bea.gov/itable/itable.cfm?reqid=9&step=1#reqid=9&step=1&isuri=1&903=1 Updated 11-30-15 Next release date December 22, 2015
9 Our 11 post WWII recessions Name Dates Duration Decline in GDP Peak to trough The Great Recession Dec. 2007 Jun. 2009 1 year 6 months -4.3% Early 2000 s Recession Mar. 2001 Nov. 2001 8 months -0.3% Early 1980 s Recession Jul. 1990 Mar. 1991 8 months -1.4% Early 1980 s Recession Jul. 1981 Nov. 1982 1 year 4 months -2.7% 1980 Recession Jan. 1980 Jul. 1980 6 months -2.2% 1973-75 Recession Nov. 1973 Mar. 1975 1 year 4 months -3.2% Recession of 1969-70 Dec. 1969 Nov. 1970 11 months -0.6% Recession of 1960-61 Apr. 1960 Feb. 1961 10 months -1.6% Recession of 1958 Aug. 1957 Apr. 1958 8 months -3.7% Recession of 1953 Jul. 1953 May 1954 10 months -2.6% Recession of 1949 Nov. 1948 Oct. 1949 11 months -1.7%
I focus on how many people have jobs Kentucky s economy has been a challenge 1930.0 1910.0 2008-09 The Great Recession October 2015 1904.1 1890.0 1870.0 1850.0 1859.2 1830.0 1810.0 1790.0 1811.7 1770.0 1750.0 1747.6 1730.0 10 http://www.bls.gov/eag/eag.ky.htm Updated 11-20-15
Kentucky Manufacturing Employment Good paying jobs 320.0 310.8 2008-09 The Great Recession October 2015 300.0 280.0 260.0 240.0 252.5 244.2 220.0 200.0 Why Important? WAGES! 11 http://www.bls.gov/eag/eag.ky.htm Updated 11-20-15
Just a little comparison October 2015 U.S. KY Jobs Lost 8,716,000 111,600 Jobs Regained 13,005,000 156,500 % 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 - http://beta.bls.gov/dataviewer/view/timeseries/ces0000000001 Updated National data 11-9-15 Updated KY data 11-20-15
Why are we interested in jobs? State Finances - Kentucky General Fund FY 2015 budget $9.801B Sales Tax $3.15B 73% Income Tax $3.97B 13 National - http://beta.bls.gov/dataviewer/view/timeseries/ces0000000001 Updated National data 10-8-15 Updated KY data 10-26-15
And if how you spend money is a reflection of what s important (2008-2014) 70.0% 60.0% 63.5% 50.0% 40.0% 30.0% 41.9% 32.8% 20.0% 10.0% 10.0% 15.3% 0.0% -10.0% -20.0% Very Modest! State Revenue Growth Public Pensions Medicaid Debt Service CorrecOons/Adult Prisons -1.0% -14.0% K-12 Base Higher Ed So! Source: Governor's office 14 http://www.ksba.org/protected/printarticle.aspx?iid=50gayb&dasi=3ubi
15 So let s think about it Education funding is being cut when We live in a new economy /knowledge based Human capital... Microsoft / Google / Apple / LinkedIn Global economy Paradigm shift Jobs follow people Richard Florida Creative Class 3T s
16 Importance of ideas/brainpower Rank Company Name Market Cap ($B) 1 Exxon Mobil 422.27 2 Apple 398.35 3 Google 292.92 4 Berkshire Hathaway 288.99 5 MicrosoW 261.42 6 Johnson & Johnson 260.02 7 Wal-Mart 258.53 8 General Electric 255.3 9 Chevron 247.72 10 Wells Fargo 234.94
Education is Important! U.S. Unemployment Rates 8.0 Unemployment rate October - 2015 7.0 7.4 6.0 5.0 4.0 5.0 5.2 4.4 3.0 2.0 2.5 1.0 0.0 U.S. National Unemployment Less than H.S. Diploma H.S. graduate, no college Some college or Associates BA or Higher 17 http://www.bls.gov/web/empsit/cpseea05.htm Updated 11-9-15
Earnings and unemployment rates by educational attainment 2014 18 Updated 11-16-15
19 Most importantly four major public policy priorities we should have- EDUCATION EDUCATION EDUCATION EDUCATION
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 $36.239 21.5% U.S. 28.8% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 20 h"p://www.bea.gov/newsreleases/regional/spi/2014/pdf/spi0314.pdf h"p://quickfacts.census.gov/qfd/states/00000.html
21 Again! - Continue your education - Remember: jobs of the future Higher education more important than ever
22 Questions