In summary

A new analysis shows the economic and social benefits of our community colleges, and why we need to invest in students.

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By Eleni Kounalakis

Eleni Kounalakis is lieutenant governor of California and a member of the Board of Governors for California Community Colleges.

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Eloy Ortiz Oakley, Special to CalMatters

Eloy Ortiz Oakley is chancellor of the California Community Colleges.

As the largest system of public higher education in the world, California’s community colleges have long been a major economic engine driving our state’s economy. The cumulative impact of the 116-college system however has never been quantified – until now.  A new analysis reveals the huge economic and social benefits of our community colleges.

California community colleges – through our programs, operations, alumni impact and other activities – added $128.2 billion in income to our state’ s economy, or 4.2% of the total gross state product, according to the economic data analytics firm Emsi who analyzed 2018-19 data. For perspective, this impact is larger than the state’s entire construction industry.

As we enter a new year, it is heartening to confirm that the community college system, with 1.8 million students, is a wise investment for the state, for taxpayers and for our students. In fact, the average associate’s degree graduate will see annual earnings $11,100 higher than someone with a high school diploma working in California. This average annual return of 19.6% is almost double the stock market’s 30-year average annual return.

Investments in our community colleges pay off for our state and taxpayers, too. For every dollar invested in community colleges the people of California will receive $11.70 back in benefits.

Community college graduates continue to be the backbone of our workforce, educating and training essential workers such as nurses, first responders and skilled workers in manufacturing, climate change response and technology. California’s community colleges helped create nearly 1.5 million jobs, or 1 out of every 16 jobs in the state.

While it’s clear that the return on investment for students is wise public policy, we have yet to keep pace with the true cost of college and the success of our students.

Many of our students have unmet “basic needs” such as housing, food, transportation and textbooks – factors that can stymie student success. This reality has only become grimmer as we face an alarming rise in inflation. We’ve all witnessed the significant price hikes at the grocery checkout line, gas pump and restaurants.

No one should have to choose between an education and putting food on the table, and our students have been particularly hard hit by the COVID-19 pandemic. It’s jarring that 1 in 5 working students has been furloughed or laid off during this pandemic and 57% are experiencing basic needs insecurity in food and housing

Community college students are struggling to balance work and their households’ health while pursuing higher education. We’ve heard it directly from students in a recent enrollment survey citing a need to work as a top reason they wouldn’t consider enrolling in a community college.

But our state needs them. Gov. Gavin Newsom recently announced in his 2022-23 budget proposal a goal of 70% degree and certificate attainment among working-age students in California by 2030. With community college students comprising more than two-thirds of all undergraduate students in our state, they are pivotal to reaching this goal.

Our state has made great strides in creating a more accessible financial aid system that reflects the cost of college, and we must press forward to create a more equitable system. Community college students have the highest net cost of attendance despite being among the lowest in income.

These economic impact findings show how fruitful investing in our students is, and if we keep our sights set on increasing students’ success, we all stand to benefit.

California’s Community Colleges embody the ethos of California: diversity, community and opportunity.

Now that we know their vital contribution to the economy, let’s step up investments in students by supporting the governor’s proposed budget investments in community colleges.


Eleni Kounalakis has also written about how our future rests on climate action.

Eloy Ortiz Oakley has also written about how the U.S. Education secretary should look to community colleges in the economic recovery, how online infrastructure is vital for community college students, and about removing obstacles that keep veterans from earning college degrees.

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