Blogs are opinion pieces and reflect their author’s views

Employable Education and Learning – Courageous Choices

Recently, there has been an abundance of media coverage and sound bites in Canada regarding income inequality, a skills shortage, an apparent lack of savings, and Canada’s place in the increasingly competitive world. One lever to ease these worries is to ensure the Canadian work force has the right education and skills to compete and, as a result, earn higher life time earnings and retire comfortably without over-dependence on the government’s social assistance programs.

A considerable body of evidence now shows that private and social rates of return to education and training are high for those with IALSS (International Adult Literacy and Skills Survey) Level 3 and above. However, more than 42 per cent of the employable work force in Canada shows less than Level 3 skills. Moreover, to make a country competitive in the global world, including in knowledge-based sectors, will require skill sets at IALSS Levels 4 and 5 (which currently is at less than 20 per cent in Canada) that can presumably be acquired with a university degree.

On this front, recent data indicates that a much larger number of Canadians are now enrolled in degree programs (25 per cent of 15-24 year olds are now enrolled in undergraduate programs). University education is now considered to be the Holy Grail to achieve higher life time income and increased financial stability. There is substantial evidence from the OECD and Statistics Canada showing the net present value of university education is positive and significant. The percentage of average after-tax earnings of graduates two years out that is required to service an average student loan is now the same as it was twenty years ago due to higher earnings, lower tax rates and interest rates.

However, there is more to this story than meets the eye. There is a considerable variation in the investment returns and net present value depending on the type of university degree that is received. For example, the return on a degree in medicine is significantly higher than one in humanities. In general, the return on investment in science, technology, engineering, math (STEM) and commerce/business degrees is higher than in other areas. However, with the exception of commerce, there has not been a meaningful influx of students into STEM based degrees.

What does this all mean? First, it is clear that IALSS Level 3 skills are absolutely necessary and significant efforts need to be made to develop these skills from preschool to high school, as well as through continuous learning opportunities for adults, especially given a significantly higher immigrant intake in Canada. New research indicates that over reliance on technology may not be the salvation to this challenge and the importance of passionate teachers and older methods of teaching should not be discounted. The six year high school program and career academies program in the U.S., and innovative approaches (e.g., installing 3-D printers in schools and communities to increase technology awareness and to provide hands on experience) to encourage students to enter STEM programs may be considered as well. Second, the focus should not just be on getting a university degree but acquiring “employable” education. I am not advocating that parents discourage their children from entering the degree program they prefer, but I believe that after getting a degree there still may be a need to learn “employable” skills. For example, someone graduating with a degree in communications will benefit from learning new technology such as HTML5, enabling them to work in the web-centric world. Third, universities and colleges have a major role to play in terms of ensuring that their students graduate with superior proficiency in reading, writing and understanding complex texts, the requirements of IALSS Levels 4 and 5 and also for gaining employable skill sets in all programs. Fourth, as a society, we should seriously consider the German model of internship where businesses actively provide opportunities to “learn on the job” rather than insisting on previous experience. Fifth, all levels of government require policies that focus on employable education, including innovative loan programs for specific types of degrees, encouragement for higher co-operation between colleges and universities, and funding not just for research, but also for programs that show a higher contribution to “employable education”.

Canada’s place in this globally competitive world and the overall financial well-being of Canadians will always be under pressure, and education and skills will have an important role to play. However, the time has come to appreciate that not all education choices are on equal footing and all of us may have to make some very courageous decisions about these choices as individuals, as parents, as governments and as a society.