Universities Make a $23 billion Per Year Economic Impact on State

Universities Make a $23 billion Per Year Economic Impact on State
December 10, 2013/Detroit Free Press

By David Jesse

Michigan’s 15 public universities were responsible for more than $23 billion of spending in 2012, a new study found.

The study, which is being released today, found the universities generate billions of dollars in direct and indirect spending, making the universities a key economic driver in the state. The report was commissioned by the Presidents Council, State Universities of Michigan, a statewide association for public universities. The study was conducted by the Anderson Economic Group of East Lansing.

“This report shows our universities are important contributors to jobs and prosperity in our state,” said Glenn D. Mroz, president of Michigan Technological University and chairman of PCSUM. “Whether it’s the salaries earned by professors, our investment in new buildings needed to keep up with student demand, or the earnings of our graduates, it’s clear that public universities are vital to every one of Michigan’s 83 counties.”

The 15 public universities in Michigan spent $7 billion on payroll for Michigan residents and $3 billion at Michigan companies for goods and services in 2012, the report found.

“In addition, students that attended these universities spent approximately $4 billion in the state, for a total of $14 billion in direct spending in Michigan,” the report says. “This activity had an indirect effect of nearly $10 billion, as it supported spending by employees and vendors of Michigan universities, as well as vendors that serve students.

According to the report, there are an estimated 71,000 full-time equivalent employees who work for the universities and 51,000 FTE employees statewide whose jobs are supported by university and student spending.

“Michigan’s investment in higher education pays off all over our state,” said Michael Boulus, PCSUM’s executive director. “Michigan’s universities are partners with local businessesin so many ways. We hope this report will remind lawmakers that investing in higher education is investing in the state’s economy.”

“Many people don’t realize that universities use machine shops to build specialized equipment for research, hire local carpet companies to replace worn rugs, and employ nurses, clerks and physicians at hospitals,” Boulus said. “Without universities, those companies and workers would face difficult times.

Unlike other university impact reports, this report also broke down the impact of universities by county in Michigan.

It’s no surprise that the largest impact came in the counties with universities located in them. In the counties that have universities in them, the larger the university, the bigger the impact.

The report lists Washtenaw County as getting the most impact. It’s home to the University of Michigan, as well as Eastern Michigan University. According to the report, U-M generates $2.2 billion in payroll spending; 356 million in non-payroll spending and a total 2.5 billion in economic impact in the county.

The next highest county listed is Ingham County, home to Michigan State University, followed by Wayne County, home to Wayne State University; Oakland County, home to Oakland University; Kent County, home to Grand Valley State University and Kalamazoo County, home to Western Michigan University.

The least impact comes to Montmorency County, the report says, with only $174,000 of impact generated by universities. It is located in the northeastern part of the lower peninsula.

Boulus said Michigan’s higher education system has suffered disproportionately from state budget cuts in the last decade.

“We will be using this report as we call on Gov. Rick Snyder and lawmakers to realize that investing in higher education will not only help universities control tuition increases, it will also benefit communities around the state in creating more and better jobs.”

Contact David Jesse: 313-222-8851 or djesse@freepress.com