Talent does not come cheap: should higher university pay be part of job growth strategies?

• Author: Barkey, Patrick M.
• Position: INDIANA INDICATORS

PUNCH IT UP ON GOOGLE Earth, or just look out an airplane window the next time you fly into Indiana, and you'll agree. There's really no such thing as an Indiana economy. With cities and towns in two different time zones, stretching from the Ohio River to the Great Lakes, we're really a collection of regions, many linked closely to neighboring states, not a single, cohesive, economic unit. We don't march to the same economic drummer, and no plan or strategy for growth will perfectly fit the needs and the assets of the various comers of the state.

But we do have a single state government, and that entity pays the bills for plenty of things that every single one of us cares about. Parks, roads, schools, prisons and many social safety net programs--not to mention support for our local governments--all come out of state tax coffers. All of the institutions supported by state government--state universities in particular--can only fly as high as the economic capacity of the state will allow.

That's a message that more university leaders are getting nowadays. Even private schools and colleges are beginning to realize that economic stagnation in the world beyond the wooded trails and elegant buildings on campus can find its way to their own doorstep. But how can they make a difference?

A new study under way in our neighbor state to the north makes a provocative and perhaps even self-serving claim. According to two University of Michigan researchers, what goes on inside the walls of colleges and universities might matter a good deal more for the rest of the economy than any of us previously thought. Their study suggests that presence of fast-growing, high-paying, knowledge-intensive jobs in any state goes hand-in-hand with salaries paid at the state's universities. With few exceptions, states that have higher than average shares of jobs in information, professional business services, finance and insurance industries also pay higher wages to their university researchers and professors.

Indiana performs quite badly on both scores. Our 453,000 knowledge workers in 2005 ranked 46th among the 50 states and the District of Columbia as a proportion of total employment, the lowest of any medium-sized state. That correlates with the low ranking of the $38,978 average paid to university employees statewide.

Of course, I need to make a disclaimer. I work for a state university And I'm not averse to getting more in my paycheck. But the findings of the Michigan...