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The Growing Importance of Community Colleges to Orange County’s Economy Feature Story

August 30, 2019

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Orange County’s nine community colleges, as well as North Orange Continuing Education (NOCE), form the cornerstone of education and skills training in the region, creating career advancement opportunities for workers while providing employers with the well-prepared, skilled labor force they need to grow and thrive.

In August, the Los Angeles Orange County Regional Consortium, in partnership with the Orange County Business Council, published a report titled The Growing Importance of Community Colleges to Orange County’s Economy. The 64-page study examines the value of Orange County’s community colleges to the regional economy in general and to industry in particular.

“The report is significant because it highlights the priority industry sectors in Orange County and the various college programs available for students in those sectors,” says Dr. Gustavo Chamorro, Orange County Director of the LAOCRC. “We wanted to have a report that highlighted the important role that our Orange County community colleges play in the lives of students and in our community.”

According to Dr. Wallace Walrod, Chief Economic Advisor and lead researcher at the Orange County Business Council, “Orange County’s community colleges play a major role in the county economy, but are often overlooked as a key part of the county’s education and workforce development systems. We wanted to remedy that by highlighting the significant benefits that community colleges create in Orange County.”

One specific focus of the report is Career Education (CE).

“While community colleges play a major role in preparing students to transfer to four-year universities,” says Walrod, “they also directly prepare students for employment in in-demand jobs such as healthcare, IT, and advanced manufacturing. One major takeaway is the need for continued, and in fact increased, collaboration between local businesses and community colleges in order to ensure that community college curricula reflect employers’ current skills needs.”

What follows is an overview of some of the report’s key findings. (If you would like to read the report in its entirety, you can download it here.)

Return on Investment

In 2016-17, Orange County’s community colleges supported 82,551 jobs and contributed $6.4 billion to the county’s economy, amounting to 2.6 percent of Orange County’s gross regional product in 2017.

While taxpayers spent a total of $914.9 million supporting the operations of the community colleges, the estimated added tax revenue from students’ higher earnings and increased business productivity included $2.9 billion in benefits to taxpayers, which is roughly $3.50 in benefits for every dollar spent, or an annual return on investment of 9.6 percent. In addition, the report estimates $16.50 in reduced costs related to crime, unemployment, and health costs for every dollar invested in the Orange County community college system.

But the benefits of community colleges and career education don’t stop there.

Depending on the industry sector, students receiving a degree or certificate from a California community college nearly double their earnings within three years. At Santiago Canyon College, drywall and insulation program graduates see an average earnings increase of almost 48 percent, while those in accounting enjoy a 45 percent boost in pay. Similarly, Saddleback College registered nursing graduates can expect a median earnings uptick of 122 percent.

The bottom line: Students who are educated in the area, and who get well-paying jobs in the area, tend to stay in the area. And that’s a good thing, because when they stay, they make a significant contribution to the local economy through higher taxes and greater disposable incomes.

Industry Focus and Student Success

Several years ago, after careful analysis of the state’s labor markets, the California Community Colleges system identified ten priority industry sectors as crucial to the state’s economic growth. In turn, the Los Angeles Orange County Regional Consortium (LAOCRC) identified eight of these as crucial to the long-term success of the Orange County economy. The report describes them as such:

  • Energy, Construction, and Utilities, which has seen tremendous growth in recent years due to investments in the state’s energy grid as well as a booming market in both residential and civil construction
  • Advanced Transportation and Logistics, because of Orange County’s role as a center for development of alternative fuel vehicle technology, goods movement, and the large presence of international automakers
  • Information and Communication Technologies, a rapidly evolving sector creating a significant number of new job opportunities across all industry sectors
  • Business and Entrepreneurship, whose growth reflects the county’s strong business climate and long-standing entrepreneurial spirit
  • Healthcare, which is currently undergoing a revolution in patient treatment and care practices and is projected to experience sustained job growth as the county’s aging population leads to increased demand
  • Hospitality and Tourism, a key regional industry attracting visitors from around the globe due to tourism infrastructure and world-class attractions such as Disneyland and coastal resorts
  • Advanced Manufacturing, a sector which, thanks to new innovative technologies, is rapidly evolving while creating dramatic economic impacts throughout the region driven by its high economic multipliers
  • Biotechnology, which has become increasingly concentrated in Orange County thanks to the clustering of world-renowned organizations such as Edwards Lifesciences and Allergan, which are serving to drive employment and specialization in this sector

In order to serve these key sectors, Orange County’s community colleges and their career education programs have been actively partnering with businesses and the public sector to create specialized, industry-focused programs and classes—an approach that not only improves the ability of students to find in-demand jobs, but also addresses the middle-skills job gap that threatens the regional economy.

“Orange County’s community colleges have become a major leader in closing the skills gap by providing students with the necessary preparation for many hard-to-fill middle-skill job openings,” says the report. “With an extensive network of campuses across the county, community colleges are well placed to serve both traditional and adult workers seeking to expand their skills and knowledge.”

Santiago Canyon College’s award-winning apprenticeship programs are a case in point. They give students the chance to “earn while they learn” a high-demand trade, and provide another example of the way that community colleges’ career education programs play a special role in connecting students with good jobs, and regional businesses with good employees.

Coastline’s innovative cybersecurity apprenticeship program provides the same educational and career benefits by connecting students with industry professionals in cybersecurity roles for mentorship and employment.

Internships are another way that regional colleges create direct pipelines into the regional workforce. More and more regional community colleges, like Irvine Valley College, are offering Cooperative Work Experience (CWE), which allows IVC students to get transferable college credit while working at a local employer like gaming company Blizzard Entertainment. At Cypress College, culinary arts and hospitality students get hands-on experience through a variety of local partnerships with Disneyland, Knott’s Berry Farm, and Marriott Hotels.

The impact of these programs on student outcomes are clear. Golden West College students who graduate with certificates in business administration or business and commerce, for example, saw increased earnings of 173 and 76 percent, respectively.

At Orange Coast College, graduates in welding technology see their earnings rise by 88 percent, while graduates of the administration of justice program at Fullerton and the office technology / office computer applications program at Santa Ana College see an average 47 percent boost.

The Ability to Adapt

The report also stresses the ability of the community college system, and career education programs in particular, to be nimble in addressing the ever-changing skills requirements of rapidly evolving industries.

“Community colleges are also able to shift and change their curriculum to reflect labor market trends, leading to timely and focused instruction of relevant skills and knowledge based on current and future needs,” says the report. “This highlights community colleges’ unique ability to respond to the problematic skills gap which allows students to more rapidly enter new and emerging occupations and industries.”

For example, Saddleback and Irvine Valley College have both added 3-D-printing classes in response to broader trends in additive manufacturing. NOCE’s curriculum is similarly adaptive to regional needs, offering a constantly evolving array of certificates for such high-demand (and high-paying) occupations as medical assistants, electricians, physical therapy aides, and administrative office assistants.

Significantly, a rapidly evolving labor market, where individual workers have a greater responsibility over their own skill development, also increases the value of community colleges. As industries evolve, it increases the need for workers to “upskill” in order to remain competitive in the labor market. The report concludes that community colleges are particularly well-positioned to address this reality.

“Orange County’s community colleges provide some of the best solutions to address the region’s critical education, workforce development, and economic development needs through their focus on both hard and soft skills and offerings of specialized academic programs at lower costs with multiple [degree and certificate] options,” concludes the report.

For more information about the impact of Orange County’s community colleges and career education programs on the region, feel free to download the report here.