49 Chapter 3: Investment analysis New York benefits from the education that SUNYWCC provides through the earnings that students create in the state and through the savings that they generate through their improved lifestyles. To receive these benefits, however, members of society must pay money and forego services that they otherwise would have enjoyed if SUNYWCC did not exist. Society’s investment in SUNYWCC stretches across a number of investor groups, from students to employers to taxpayers. We weigh the benefits generated by SUNY WCC to these investor groups against the total social costs of generating those benefits. The total social costs include all SUNY WCC expenditures, all student expenditures (including interest on student loans) less tuition and fees, and all student opportunity costs, totaling a present value of $140.3 million. On the benefits side, any benefits that accrue to New York as a whole – including students, employers, taxpayers, and anyone else who stands to benefit from the activities of SUNY WCC – are counted as benefits under the social perspective. We group these benefits under the following broad headings: 1) increased earnings in the state, and 2) social externalities stemming from improved health, reduced crime, and reduced unemployment in the state (see the Beekeeper Analogy box for a discussion of externalities). Both of these benefits components are described more fully in the following sections. Growth in state economic base In the process of absorbing the newly acquired skills of students who attend SUNY WCC, not only does the productivity of the New York workforce increase, but so does the productivity of its physical capital and assorted infrastructure. Students earn more because of the skills they learned while attending the college, and businesses earn more because student skills make capital more productive (buildings, machinery, and everything else). This in turn raises profits and other business property income. Together, increases in labor and non-labor (i.e., capital) income are considered the effect of a skilled workforce. Estimating the effect of SUNY WCC on the state’s economic base follows a similar process used when calculating increased tax revenues in the taxpayer perspective. Social perspective Social costs Social benefits SUNY WCC expenditures Student out-of-pocket expenses Student opportunity costs Increased economic base Avoided social costs
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