Pandemic-induced delays in the school system highlight the skills gap problem
Students returning to school this week face a growing consensus on the changing job market. There are labor shortages, not only in low-paying service jobs, but also in skilled and technological sectors.
It’s an environment made even more challenging by the setbacks created by the disruptions to our school system over the past two years.
Canada, we are all told, is facing a skills shortage. Even before the pandemic, various jobs went unfilled because those without jobs were not qualified to fill vacancies. It’s a problem that will only get worse, especially as baby boomers retire (assuming their economic circumstances permit).
We don’t get enough education to find a job in today’s economy. The unrealized value of job vacancies in the Canadian economy reached $25 billion in 2020. Measured as a share of the economy, this unrealized value was equivalent to 1.33% of GDP, according to the Conference Board of Canada.
The gap is not simply a matter of technical skills, although Canada is increasingly relying on workers from outside the country to fill these positions. (With temporary foreign workers for jobs like Canadian workers no longer seem willing to do.)
Rather than specific duties, the Conference Board finds that the six most popular job vacancies are active listening, critical thinking, reading comprehension, speaking, monitoring, and coordination. Job vacancies related to each of these skills currently cost the Canadian economy $1 billion or more per year in unrealized value due to unfilled vacancies.
Much of the discussion focused on post-secondary education, where the courses offered do not always lead to good job prospects. Students continue to enter arts colleges, even though the days of getting a degree – any degree – and getting a good job are long gone. Instead, many students graduate with record debt only to find that there is no demand in their chosen field. Worse still, finding any kind of job is an uphill battle, not to mention a battle that will allow them to start paying off the aforementioned massive debts.
Much of the public dialogue on the gap suggests that Canadian labor markets are suffering from a shortage of workers in certain industries – think of Alberta’s former oil boom, for example – coupled with unequal skills among the available labor supply. These circumstances, the argument goes, are exaggerated by the difficulty of moving workers from low-growth provinces and industries to high-growth industries, as well as the inadequacies in how schools develop skills and connect learners. to employers.
The key, it seems, is finding the right mix of university, college, trade school and apprenticeship programs. And, more difficult still, to persuade children to follow this path towards what are – for today, anyway – considered to be more in-demand careers. This list includes fields like science, engineering and technology, business and finance, and health-related fields.
Although there have been denigrations of the post-secondary system, particularly universities, those who analyze the skills gap argue that higher education is still essential, even if the benefits are no longer what they used to be.
Completing post-secondary education is still the best way to get a good, well-paying job in Canada, but the premium is shrinking because too few students are graduating from high-demand programs.
The reports note that the proportion of adults in Canada with a post-secondary education is the highest of any OECD country, even though the cost of that education is roughly double the OECD average. Yet more and more of these degree holders are falling behind on the income scale, with the share of Canadian university graduates earning less than half the national median income being the largest among all OECD countries.
So more graduates than most, but that hasn’t translated into good jobs and good salaries.
Studies have shown that this is largely the result of the programs Canadians choose to study. They looked at various reports that attempted to calculate an average annualized “return on investment” on education and found strong discrepancies by field of study.
The best value for money comes from specialized and professional fields such as medicine, law and engineering. The risk of falling into a low-income category is much greater for humanities and social sciences graduates, with a limited risk for health, engineering or business students.
The field of study premium is not just a Canadian phenomenon – it has been observed in other industrialized countries. But it’s not clear that the students, armed with this knowledge, made the most profitable decisions. With the exception of commerce, over the past 10 years there has not been a significant influx of students toward degrees with better pay outcomes.
Adding to an already difficult situation, studies such as those from the Labor Market Information Council show that employers are increasingly emphasizing skills rather than education.
Finding workers with the right skills is not a challenge unique to the regions or sectors experiencing the strongest job growth. Workers are also acutely aware of these changes and the increased emphasis on skills (i.e. the actual ability to be effective in a job) rather than qualifications alone (i.e. the document signifying the end of a course). Surveys show that skill requirements are the second most sought-after piece of information by Canadians after wages. Additionally, workers – especially the most vulnerable such as those from lower socio-economic backgrounds, Indigenous peoples and older workers – may face additional barriers due to these rapid changes in the labor market.
With studies suggesting that today’s young people will struggle more than any other generation in the post-war period, there is added incentive to find the right course of study. For the kids heading back to high school this week, judgment day isn’t so far away that decisions may be waiting too long.