The Economic Value of Washtenaw Community College

Washtenaw Community College (WCC)

creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups—students, taxpayers, and society.

Using a two-pronged approach that involves an economic impact analysis and an investment analysis, this study calculates the benefits received by each of these groups.

Results of the analysis reflect fiscal year (FY) 2016-17.

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Impact on Business Community

During the analysis year, WCC and its students added $524.1 million in income to the Washtenaw County economy, approximately equal to 2.1% of the county’s total gross regional product (GRP). WCC’s impact supported 7,897 jobs in FY 2016-17. For perspective, this means that one out of every 36 jobs in Washtenaw County is supported by the activities of WCC and its students.

$85 million
added income

Operations spending impact

• WCC employed 1,451 full-time and part-time employees in FY 2016-17. Payroll amounted to $77.4 million, much of which was spent in Washtenaw County to purchase groceries, clothing, and other household goods and services. The college spent another $44.1 million to support its day-to-day operations.
• The net impact of college payroll and expenses in Washtenaw County during the analysis year was approximately $85 million in income.

$16.2 million
added income

Student spending impact

• Around 41% of credit students attending WCC originated from outside the county. Some of these students relocated to Washtenaw County. In addition, a number of students would have left the county if not for WCC. These relocated and retained students spent money on groceries, transportation, rent, and so on at county businesses.
• The expenditures of relocated and retained students during the analysis year added approximately $16.2 million in income to the Washtenaw County economy.

$422.9 million
annual added income

Alumni impact

• Over the years, students have studied at WCC and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in Washtenaw County.
• The impact of former students currently employed in the county workforce amounted to $422.9 million in added income during the analysis year.

24.3%
average annual return

Student perspective

• WCC’s FY 2016-17 students paid a total present value of $33 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent $64.9 million in money that they would have earned had they been working instead of learning.
• In return for the monies invested in the college, students will receive a present value of $682.7 million in increased earnings over their working lives. This translates to a return of $7.00 in higher future earnings for every dollar that students invest in their education. The average annual return for students is 24.3%.

$11,700 more
on average than a high school graduate

Taxpayer perspective

• In FY 2016-17, state and local taxpayers in Michigan paid $69.7 million to support the operations of WCC. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $270.7 million in benefits to taxpayers. Savings to the public sector add another $15 million in benefits due to a reduced demand for government-funded services in Michigan.
• Dividing benefits to taxpayers by the associated costs yields a 4.1 benefit-cost ratio, i.e., every dollar in costs returns $4.10 in benefits. The average annual return on investment for taxpayers is 11.6%.