Education impacts Utah’s business rankings

Wednesday, July 10th, 2013

A top five ranking among America’s best states for business is generally something to celebrate. Unless you’ve dropped from second place a year ago.

CNBC released its rankings today and Utah finds itself tied for fifth with Virginia; the commonwealth had claimed the top spot in the ranking three times since 2006. South Dakota claimed the top spot for 2013.

Business is tied to education
The Beehive State’s overall ranking was hurt by its 39th overall ranking in education. This is not a new issue to the business community; the warning signs are clear:

- We have a rapidly diversifying population that requires a new approach to education.
- We have lower test scores than states with similar ethnic/minority diversity, education levels of parents and student poverty levels.
- One out of every four high school freshman will not graduate.

All that comes as we rank 32nd  among states in public education spending per $1,000 of personal income.

We used to do more with less. Now we just do less.

On the same page
Utah’s secret sauce is our ability to work together to solve problems. Through the Prosperity 2020 movement, the business community, has called for greater innovation, investment, accountability and collaboration in education. Gov. Gary Herbert and the Utah Legislature have made education a priority by setting goals to have 66 percent of all Utah adults hold a college degree or skilled trade certificate, and for 90 percent of all elementary school students to be proficient in reading and mathematics by the end of the decade.

With the governor, the Legislature, educators and the business community driving toward the same, well-defined, challenging goals, we can make a significant improvement.

Silver lining
The good news is Utah still scored very high in business friendliness thanks to our regulatory environment and five percent corporate and individual tax rates.

We have rightfully touted ourselves as a great place to do business. We rank very high in many rankings like this. We’re still Forbes Magazine’s Best State for Business and Careers– a title we’ve held for three years in a row.

But just like the road to enduring prosperity, if we want to claim the title as the Top State for Business, it starts with education.

You can read the CNBC article here and find complete rankings here.


A business case for education reform

Friday, June 28th, 2013

The Salt Lake Chamber knows education is the key to enduring prosperity. We’ve joined nearly 20 other chambers of commerce and business associations as part of the Prosperity 2020 movement.

As the infographic below illustrates, the U.S. education system is failing to equip students with the skills required for the jobs of the 21st century. In some communities, however, local business leaders are leading the charge for outcomes-based reform.

66 by 2020: The Perfect Vision

Thursday, May 23rd, 2013

Joaquin Zihuatanejo from CoolSpeak recently presented at the First Annual Multicultural Affairs Youth Leadership Summit. This video was created by Zihuatanejo and Art Hooker. Zihuatanejo wrote this poem for the Governor’s 66 by 2020 initiative and goal shared by Prosperity 2020, the largest business-led movement to increase innovation, investment and accountability in education.


Miss America and the importance of STEM education

Friday, May 10th, 2013

As the Governor’s Office of Economic Development (GOED) announced the allocation of some STEM-related funds, Miss America joined business leaders and policy makers in championing the importance of STEM education in a press conference on Friday at the Salt Lake Chamber.

The Utah Legislature appropriated $10 million for a STEM Action Center during the 2013 session. Sophia DeCaro, deputy director of GOED, announced $1.5 million will go to establish a director, staff and board. $5 million will be dedicated to math skill building in sixth, seventh and eighth grades, while $3.5 million will go to juniors and seniors in high school for college math readiness.

“If we don’t give our children an education that provides them an edge, their future jobs will be taken from them by students in China, India or the rest of the world,” said Stan Lockhart of IM Flash and private sector chair for Utah’s STEM Education Initiative. “What can we do to give them an edge? What can we do to teach them the skills that allow them to compete in this digital world we live in? What it comes down to is this: science, technology, engineering and math.”

Mallory Hagan, the reigning Miss America, says she expressed great interest in math and science in middle school thanks to passionate teachers who cared about her success. “But [in high school] we had teachers who were making sure we made good grades on tests but not making sure we could comprehend any of the information. That’s a hard lesson to learn when you’re a freshman in bio-medical science.”

Hagan has since changed her educational path to marketing with a focus in cosmetics and fragrance, but wishes she had learned back in her formative years the “cool” jobs that she could have from pursuing more math and science, like making lipstick and mascara and not just wearing it.

Today, she encourages mentorship as part of an education to show students what kinds of opportunities are available to them, since dissecting frogs and learning about atoms doesn’t give them the whole scope what of what they are able do.

“There are so many kids across the nation who don’t have a favorite subject, who don’t enjoy school, and they are in the first, second and third grade. That’s really disheartening because we want kids to want to learn. We need to catch them early on otherwise there’s no hope for the rest of their education process.”

And a quality education can help make the difference, whether that’s in only in making good grades to get to college or making an actual difference in the world as many STEM-related jobs are able to do.

Want to Save American Jobs – Start in the Classroom

Wednesday, April 3rd, 2013

Ed Rust, Chairman and CEO of State Farm and Chairman of the U.S. Chamber of Commerce.

Editor’s note: This is cross-posted from CNBC and Free Enterprise

As our political leaders take stock of where we stand in 2013—both as individual states and as a nation—we are hearing a consistent message: jobs, our economy and education are inextricably linked.

We heard the President make this case in his State of the Union Address and we’ve heard it echoed by both Democratic and Republican governors. If we want to see some meaningful improvements in our education system, business leaders must step up and lead as well.

Education is akin to a computer’s operating system. It drives other crucial functions in a country: workforce preparedness, business growth and economic strength to name just a few. Unfortunately, our system of education and workforce training has become outdated. If we are going to prepare students as well as we should, we must upgrade.

Business leaders understand the urgency of this better than anyone, and we recognize the world is changing – fast. Low-skill jobs that pay well are disappearing and never coming back. What used to be elite knowledge is now entry-level knowledge.

Other countries are making the education of their workforces a priority. Yet, while the United States still has one of the best educated workforces, we are the only industrialized country where the generation just entering the labor market is less likely to have a college degree than the one about to leave the labor market.

The percentage of youth in America is declining, while the population is growing more diverse. And while the latter trend presents tremendous opportunities, the dropout rate for Latino and African American students in the U.S. remains 20 points higher – almost 50 percent — compared to the overall U.S. school population.

These students, who have been underserved by our education system will become a massive portion of our future workforce. So ensuring access to high-quality education for all students is not just the right thing to do. It’s also the smart thing.

Changing how we educate is as important for the individual worker as it is to the strength of the workforce as a whole.

More than ever, the success of American workers—their income, employment, financial and career stability—are all determined by one simple factor: how well their education matches up with the economic demands of the world. Nothing illustrates this better than the fact that there were 3.7 million unfilled jobs on the last business day of November 2012 despite an unemployment rate that has failed to return to prerecession levels.

Education has always been—and can still be—the key to fulfilling the American Dream. And business depends on education to produce the skilled, innovative, first-class individuals we need to keep America a global leader. But like any system, we should make improvements to optimize it to meet the challenges of today and those we will face tomorrow.

The good news is that there are thoughtful policy solutions that are already having a positive effect at the local, state and federal levels.

World class academic standards are helping ensure that every single student is held to the same high expectations—and given the solid educational foundation—they need to succeed in both school and career. We now look beyond just aggregate and average figures; we also look at subgroups of students, like English Language Learners, who may need more support to reach higher standards. We are accurately reporting graduation rates. And we are bringing renewed priority to improving our nation’s lowest performing schools.

In addition, some of the biggest names in business, from General Electric to ExxonMobil and Wells Fargo, are strengthening their commitment to improving education and ensuring all U.S. students succeed academically and professionally. Many of us are extending that commitment to helping improve America’s education system even further. This April, I will be joining a number of my fellow CEOs to discuss the ways in which we—as business leaders—can help ensure our country is not just aware of the urgency but is implementing the solutions.

Governor Terry Branstad remarked in Iowa’s State of the State address that college and career-readiness upon high school graduation is “an economic and moral imperative.” He’s right of course. America’s success has long been defined by its ability to innovate, adapt and excel. It’s time to apply that thinking to our education system.


Business leaders thank lawmakers for investing in education

Friday, March 29th, 2013

With just over a week remaining in the 2013 General Legislative Session, the business community supporting the Prosperity 2020 movement encouraged the Legislature to focus on three unifying elements of a bold, multi-year education agenda.

The Utah State Legislature delivered.

Earlier this week, Randy Shumway, president and CEO of the Cicero Group and vice chair of Prosperity 2020, was a guest on KSL News Radio’s Doug Wright Show to discuss the bills passed to invest in the next generation of Utahns.

“This is a good legislature, a fiscally prudent legislature that, because of their wisdom over the years, we had monies to invest in education this year,” says Shumway. “While other states are hemorrhaging, our state is investing–not just in the short term, but in the long-term for the betterment of our children.”

The original call to action from the business community came by way of a full-page advertisement that ran in both the Salt Lake Tribune and Deseret News. Shumway also did an interview with Wright the following day explaining why the business community supported education-strengthening legislation.

“The business community is the largest customer of education; we’re the ones hiring all of these graduates,” Shumway told Doug Wright. “So we have a vested interest in the quality of student learning. Education is the key to enduring prosperity. It’s critical to note that it’s not merely an economic motivation. This is a moral prerogative. We owe it to the next generation to give them the highest quality education possible.”

The Legislature did three things to invest in education this session:

-   Passed a joint resolution adopting the twin goals of 90 percent reading and math proficiency in elementary schools, and 66 percent of all Utah adults with a postsecondary degree or certificate by 2020

-   Made strategic investments toward measurable goals

-   Committed to develop a collaborative and united education plan

“We have to create a strategic plan. We spend billions of dollars on public education, K-12 as well as higher education,” says Shumway. “Yet the relevance and depth of what a student and a graduate needs to know and what they need to be able to do is constantly evolving. The state needs a unified plan specifying the objectives, the different audiences we need to serve and how we can best achieve those desired objectives for each demographic at the lowest cost and at the best return on investment. And the Legislature this year committed to focus on and invest in that area, and I believe there will be bills that come of that next year.”

Jobs that require STEM skills (science, technology, engineering and mathematics) will grow at 17 percent compared to 9.8 percent growth for non-STEM occupations over the next six to seven years. These are jobs that pay 50-75 percent more than other comparable jobs.

“These are creating family-sustaining careers for Utahns,” says Shumway. “We need to establish systemic change that will propel greater innovation, greater accountability and greater investment in the long-term and short-term education needs in our state.”


An economy-strengthening legislative session

Tuesday, March 26th, 2013

Editor’s note: this post was originally published as an op-ed in the Salt Lake Tribune. You can read the original post here

In early February, a high-level executive from General Electric met with Lt. Gov. Greg Bell and complimented him on Utah’s reputation as a well-managed state. Thinking the visiting executive had been given the information by his staff and was mentioning it to be polite, the Lt. Gov. thanked him and asked who had told him of our state’s reputation for prudent management. The GE executive assured Lt. Gov. Bell Utah’s solid management is widely acknowledged in the business world.

The 104 members of the Utah Legislature concluded a successful 45-day session last week and they deserve the thanks of all Utahns for their service. Utah’s business community also applauds them for the steps they took to strengthen our state economy and Utah’s reputation for being well managed.

The Legislature invested in Utah’s future workforce. Our elected officials heard the call for greater innovation, investment and accountability in education and took action. Their decision to adopt the dual goals of the Prosperity 2020 movement to have 90 percent of Utah’s elementary school children proficient in reading and mathematics, and 66 percent of all Utah adults earn a college degree or skilled trade certificate by the year 2020 is an important step in the right direction.

Goals alone will not improve educational performance in our state. The Legislature took practical, important steps toward achieving these goals. They fully funded growth in public and higher education. They ensured all high school students will be better prepared for and take the ACT exam. And they funded a Science, Technology, Engineering and Mathematics (STEM) action center that will help implement the best practices for teaching students subjects that will drive our economy in the decades ahead.

The Legislature also strengthened Utah’s economy by making smart decisions to improve our health system. By 2020, the U.S. will need 91,500 more doctors than we are projected to have, and Utah is among the states with the lowest number of doctors per capita in the country. Our elected officials funded an additional 40 seats at the University of Utah medical school. All the additional seats are required to be filled by students with Utah ties who are more likely to practice in our state when their training is complete.

The business community also supports action taken to strengthen the commercial insurance market by making it easier for families to utilize government premium subsidies to purchase private insurance.

Moving goods and services through our state is also vital to our economy. The Legislature continued its commitment to transportation infrastructure by approving $336 million for over 20 projects.

Our ability as a state to enhance community prosperity through innovation has set us apart. Legislators adopted an innovative plan to enhance Utah’s air quality by converting buses and state fleet vehicles to clean-burning CNG and building natural gas fueling and maintenance infrastructure. A general session that took place during extended inversions and poor air quality produced a pragmatic approach to convert the worst polluting vehicles into some of the cleanest. Each bus converted to CNG is the equivalent of converting 36 cars to the cleaner-burning fuel.

Our state constitution requires a balanced budget, but just because something is required doesn’t make it any less of a challenge. Our Legislature balanced the budget without a general tax increase and added some $50 million to the rainy day fund.

Utah has been recognized nationally as the best-managed state and the Legislature strengthened that reputation during this session. The business community thanks these elected officials for their dedicated service and we will continue to work in partnership with them to strengthen the Utah economy.



Ray Pickup is the chair of the Salt Lake Chamber Board of Governors, and president and CEO of Workers Compensation Fund.

Chamber weighs in on successful session, focus on education

Monday, March 18th, 2013

The 2013 General Legislative Session wrapped up late last week and the Chamber hit the airwaves on Friday to thank the 104 members of the Utah State Legislature for their dedicated service and to applaud their commitment to education.

The Chamber’s 2013 Public Policy Guide says the state’s largest and longest-serving business association “opposes increases to income, sales or property tax that are not supported by the public.” Marty Carpenter, executive vice president of communication at the Salt Lake Chamber, told KSL’s Lori Prichard that the members of the Legislature deserve credit for balancing the budget without a general increase in taxes.

“The Legislature has a very difficult task every year,” says Carpenter. “They’re required by the state constitution to balance the state budget—a $13 billion budget. Just because something is required, doesn’t make it any easier. First and foremost we need to applaud these individuals who ran for office, spent 45 grueling days up there and balanced a budget, and they did it without a general tax increase.”

Prichard asked about the impact of education funding on Utah’s ability to attract businesses and strengthen the economy in the long term. The Legislature fully funded enrollment growth in both public and higher education and adopted the goals to have 90 percent of Utah’s elementary students proficient in reading and 66 percent of Utah adults with a college degree or skilled trade certificate by 2020.

“Our greatest challenges are often our greatest opportunities,” says Carpenter. “If we can take our large and youngest workforce in the country and make it one of the best educated, we can drive an economy in this state that can’t be matched. That’s the opportunity.“

Carpenter told KSL the business community believes there is a need for greater innovation, investment and accountability in education—and that steps have been taken to improve the education system by using state dollars where they’ll have the biggest impact.

The Legislature also created and funded the STEM Action Center, a nexus for developing innovation in education. They strengthened higher education with an $18 million allocation to mission based funding, much of which will be directed toward STEM pursuits. And they secured college assessment preparation and testing for all high school students.

When asked specifically about per-pupil funding levels in the state, currently among the lowest in the nation, Carpenter says legislators in both parties are committed to improving education and that the business community understands there is a need for greater investment in education. However, just as important is the state’s ability to innovate in the use of education resources to get the biggest bang for each buck.

“Education is going to be the key to drive the state economy for the foreseeable future,” says Carpenter. “That’s why you see the business community leading out with the Prosperity 2020 movement. We’re only at 2013, we have seven more years to go and we have a long way to go and a lot of good public policy ideas still to put in place between now and the end of the decade to drive our economy.”

Expanding U School of Medicine is good business

Wednesday, March 13th, 2013

Editor’s note: the following post was originally published as an op-ed in The Salt Lake Tribune, Tuesday, March 12, 2013. You can read the original post here. It was co-authored by Lane Beattie, president and CEO of the Salt Lake Chamber and Rod Betit is the president and CEO of Utah Hospital Association.

Affordable, high-quality health care is an important factor in recruiting businesses and talent to Utah. Health care touches the lives of nearly every Utahn, sending both direct and indirect ripples throughout our state economy. One way we can strengthen our healthcare sector is to assure an adequate supply of physicians is available to support our growing population. That’s why the Salt Lake Chamber and the Utah Hospital Association have joined together to voice support for SB 42, legislation funding the expansion of class size for the University of Utah School of Medicine.

By 2020, there is a projected shortage of at approximately 91,500 physicians—45,400 in primary care and 46,100 subspecialists—in the United States. Utah’s physician shortage is even more severe than most other states across the nation. As research conducted by the Association of American Medical Colleges has found, only three states have fewer physicians per capita than Utah. This shortage will intensify with the influx of the newly insured in 2014, as a result of the Affordable Care Act, and will further worsen as the number of people over age 65 (who use more than twice the health care of younger adults) doubles.

In 2008, as the nation entered what has come to be known as the Great Recession, the University of Utah School of Medicine reduced its class size from 102 students to 82 due to cuts in federal funding. To meet the impending demand, the University has set a goal to immediately increase the School of Medicine’s class size back to 102 students. Through SB 42, the University of Utah is requesting $10 million from the general fund to enable the School of Medicine to restore and expand its class size to 122, the optimal size of the class at the Medical School, within the next two years.  The $10 million request reflects cost-sharing with the School of Medicine to support the expansion.

Utah is fortunate to be able to train and retain a number of physicians within the state. Each year, 75 percent of each medical school class at the U is composed of Utah residents. Additionally, approximately two-thirds of all Utah physicians have a connection to the University of Utah School of Medicine.  It is also important to note that the U is among the top medical schools in the country in the percentage of medical students pursuing family medicine. Primary care is a more popular profession for medical students at the University of Utah than most medical schools.

For our rural areas, recruiting physicians is a significant challenge. The best way to get more medical professionals working in our rural communities is to expand our ability to educate physicians within the state. The University program offers rotations in rural areas and actively recruits rural applicants. Expanding slots available at the School of Medicine is a win-win for all parts of the state.

The Salt Lake Chamber and the Utah Hospital Association support full funding of the expansion of the School of Medicine. Passage of SB 42 means that more highly qualified Utah students will be able to stay and receive their medical training close to home, helping to reduce their debt load, and ensuring that we have the number of physicians we need to care for our citizens in this generation and the next. This expanded capacity will be tremendously beneficial for our state.

Lane Beattie is the president and CEO of the Salt Lake Chamber.





Rod Betit is the president and CEO of Utah Hospital Association




Minimum wage, investment in education and good news in housing

Friday, March 8th, 2013

Editor’s note: This post was originally published on, Wed., March 6, 2013, and is authored by Marty Carpenter, executive vice president of communication at the Salt Lake Chamber. 

If there is one problem with writing a monthly business column it is that there are often several topics you want to cover that come and go during those weeks in between publishing dates. So, today, I want to cover a few that didn’t quite line up just right on the editorial calendar.

Raising the minimum wage
During the State of the Union address last month, President Obama made his argument to raise the minimum wage from $7.25 per hour to $9.00 per hour. Just this morning there is news that a bill to raise the minimum wage to $10.10 per hour and tying the rate to inflation will be introduced in the House and the Senate.

Said the president in the State of the Union: “Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.”

At first glance, he makes a compelling case.

That’s why things are almost always worth a second glance.

The problem with this approach—a government mandate of revenue distribution within a private business—is that it doesn’t increase revenue in any way.

Let’s say you have a business with 10 employees making the minimum wage. Suddenly the government increases the minimum wage by $1.75 per hour. That means with the same amount of money coming into your business you now have to pay more in compensation. You either need to make cuts somewhere else so you can increase the amount you pay each of these workers, find a way to do more with the same amount of workers and increase the overall revenue, cut the amount of hours those employees work or eliminate some of the jobs.

By my count that means there is, at best, a 50-50 chance the workers actually get the raise.

Raising the minimum wage actually has the opposite effect than what the president is arguing. It will cost some of the most vulnerable workers hours they count on and it will cost some their jobs.

If you are a minimum wage employee, you might think it sounds pretty good that the leader of the free world would like to give you a raise. I can understand that. But if you are one of the ten minimum wage employees at your business, you better hope you are one of the best and you better be willing to do the work of the three that are about to be laid off—because that’s most likely the next step.

No matter what your profession, consider what would happen if the government were to mandate you receive a salary increase of 24 percent. Do you think you would be more likely to show up at work the next day making more money… or do you think you would be more likely to have your position elinated?

This idea disproportionately hurts the low-wage workers it is trying to benefit and it makes it more difficult for businesses to hire young people making their first entrance into the workforce.

Of course, there’s also that nagging little detail that raising the minimum wage to $9 per hour still isn’t a great living. Full time work at the current minimum wage earns you just over $15,000 per year. At the rate the president is suggesting, it jumps to $18,720.

The way to make more money in a free enterprise system is to increase your value in the marketplace. You have to enhance your skills, increase your education or find some way to be of greater value to your employer.

Re-slicing the pie doesn’t make any more pie.

Funding education
Speaking of enhancing skills, education continues to be the big issue on Capitol Hill as we head into crunch time in the appropriations process. For those who don’t speak the language of the Legislature, appropriations is the process by which the House and Senate decide who gets the money and just how much.

Last Sunday, Utah’s business community ran a full-page ad in both major daily newspapers thanking the members of the Legislature for their service and calling for three unifying elements of a bold, multi-year agenda:

1. Pass a joint resolution adopting the twin goals of 90 percent reading and math proficiency in elementary schools and 66 percent of adults with a postsecondary degree or certificate by 2020.

2. Make strategic investments toward these measurable goals. As a starting point, and with appreciation for the budget challenges Utah faces, we recommend the following new investments in education: $20 million for higher education’s 66 percent plan, $15 million for a STEM action center, $9 million for additional postsecondary certificates, $20 million for early intervention and children at risk, $1 million for ACT exams for every high school student and full commitment to fund computer-adaptive testing in Utah schools.

3. Commit to the development of a collaborative, 10-year unified education plan that can be adopted by the end of 2014.

Rarely is the decision to invest found on the path of least resistance. It is a difficult, yet time-tested principle that dedicating money you have today to grow opportunity and return on investment in the future is the right way to go.

The Legislature and the governor have a track record of making solid investments for our state—even in difficult economic circumstances. Utah’s economy is growing and we have some ability to invest. Providing the money for education will pay off.

Finally, a quick word about the housing market. My friend, Rob Brough, wrote earlier this week that the Utah housing market is ready to heat up. Housing experts across the state agree with him.

When the economy turned sour in 2008, the generally accepted refrain was that housing got us into the mess and housing would have to help get us out. One of the biggest problems we faced when the housing bubble burst was excess inventory. It takes time to restore balance in the market. Today, the number of existing homes available has dropped by 33 percent in the past 12 months. Since April 2012, home prices in the Salt Lake area have risen every month from the same month the year prior.

The analysis: housing—always a cyclical business—is primed for an up-cycle.

That’s good news for those looking to sell in the next 12-18 months in particular, and it’s good news for the rest of us, too.