The chancellor of Oregon's University System said Oregon's work force and its employers are likely to suffer if the Legislature doesn't support higher education funding.

The chancellor of Oregon's University System said Oregon's work force and its employers are likely to suffer if the Legislature doesn't support higher education funding.

Chancellor George Pernsteiner told a Chamber of Medford/Jackson County audience Monday if soaring enrollment isn't accompanied by state support, rising tuition costs will drive students out of the system and leave employers with an under-educated work force.

"For our state and our citizens to succeed, we need consistent public pressure on our state's leaders to invest in the futures of Oregonians and not just respond to current economic crises by slashing funding for all levels of education and hope the future will take care of itself," Pernsteiner told the monthly forum gathering at the Rogue Valley Country Club.

He said the campuses at Southern Oregon University, Eastern Oregon University, Oregon Institute of Technology and Portland State University were products of state investment in higher education in the 1920s and 1940s.

"In the intervening years, Oregon did OK," he said. "But we did fall from being the pre-eminent state in the Northwest to being overshadowed by Washington.

The question now, Pernsteiner said, is whether Oregon and Oregonians will be positioned to thrive in a competitive world when job growth starts again in a couple of years.

The university system, along with all other state-funded agencies, was asked recently to submit plans outlining how they would deal with a 30 percent funding cut. Higher education, which gets about a third of its funding from the state, responded with proposals to reduce staff and increase tuition by 12 percent. That, Pernsteiner said, would keep an estimated 10,000 students out of college in the first year of the budget cuts.

He said the state's industrial diversity is far greater than it was coming out of the recession that began in the late 1970s.

"That's good, because I fear forest products may be one of the last sectors to improve this time around," Pernsteiner said.

Intel is investing and retooling, he said. Nike has been one of the most successful consumer companies during the cycle, while Oregon's metals companies are ready to grab market share in all matter of materials — from street cars and rail cars to specialty products.

"We as a state are fairly well positioned," he said "Our companies are poised, but are we as a state? Well, maybe not."

The 21st century economy demands flexibility, creativity and an educated citizenry, he said.

Comparing education levels today with those of 40 years ago, Pernsteiner noted the state has lost ground. Four decades ago, only 8 percent of the working adult population lacked a high school diploma, while 40 percent of the population had earned a two-year college degree or more.

"In 1968, we were the envy of the world," Pernsteiner said. "Our citizens finished high school, went on to college and completed their degrees at rates unsurpassed by almost anyone else in America."

However, the past two generations have failed to keep pace. He said Oregon is one of two or three states where the older you are, the better educated you are.

"We have defied the tide of a thousand years of Western history and reduced the education level for two successive generations," Pernsteiner said. "Our competitiveness on the global stage is eroding as our best-educated citizens are vanishing."

Reach reporter Greg Stiles at 776-4463 or e-mail