Merced County Times Newspaper
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Report: Investing in Merced College benefits students, taxpayers alike

Merced College creates wealth for its students, retains wealth for its community, and represents a worthwhile investment for taxpayers, according to an economic impact report released earlier this year.

According to the report, through direct operational expenditures like employee wages and the purchase of goods and services, plus other benefits like increasing students’ earnings and decreasing their need for government services, Merced College creates a total economic impact of $545.1 million per year.

“The bottom line is that Merced College provides numerous economic benefits to students, to taxpayers, to local businesses, and to our region and state at large,” President Chris Vitelli said. “We are a major employer that pays good wages with outstanding benefits to local residents. We are an educational institution that provides countless opportunities for students of all ages to increase their earning power and create a better quality of life for themselves and their families. And we are an integral part of the societal and cultural ecosystem that keeps the Merced region thriving.”

The study was conducted by Emsi, a labor market data company that has been advising leaders in higher education, business, and community development since 2001. Emsi measured the economic impacts created by Merced College on the business community and the benefits the college generates in return for the investments made by students, taxpayers and society.

Among the key takeaways from the report:

For every $1 a student invests in their Merced College education, students receive $6.80 in future earnings throughout their working lives. The average associate degree graduate from Merced College will see an increase in earnings of $8,100 each year compared to someone with a high school diploma.

  • Those students, by and large, remain in the Merced area after graduation and continue spending and investing locally. The impact of increased earnings of Merced College alumni and the businesses they work is estimated at $412.4 million annually.
  • As Merced College students earn more money, they also make higher tax payments. Because they earn more, students and alumni also depend less on government services, which becomes a benefit to taxpayers and to society. According to the report, for every $1 the college receives in state funding, $1.50 is added to government coffers.
  • Merced College creates $110.8 million in added income for the community through operations spending like annual payroll, plus $21.9 million in annual spending by students attracted to or retained in the region.

According to Emsi, the data and assumptions used in the study are based on several sources, including the FY 2019-20 academic and financial reports from Merced College, industry and employment data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau, outputs of Emsi Burning Glass’s Multi-Regional Social Accounting Matrix model, and a variety of studies and surveys relating education to social behavior.

The study applies a conservative methodology and follows standard practice using only the most recognized indicators of economic impact and investment effectiveness.

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