HESA

Higher Education Strategy Associates

Category Archives: employment

January 28

The Future of Work (and What it Means for Higher Education), Part 2

Yesterday we looked at a few of the hypotheses out there about how IT is destroying jobs (particularly: good jobs).  Today we look at how institutions should react to these changes.

If I were running an institution, here’s what I’d do:

First, I’d ask every faculty to come up with a “jobs of the future report”.  This isn’t the kind of analysis that makes sense to do at an institutional level: trends are going to differ from one part of the economy (and hence, one set of fields of study) to another.  More to the point, curriculum gets managed at the faculty level, so it’s best to align the analysis there.

In their reports, all faculties would need to spell out: i) who currently employs their grads, and in what kinds of occupations (an answer of “we don’t know” is unacceptable – go find out); ii) what is the long-term economic outlook for those industries and occupations? iii) what is the outlook for those occupations with respect to tasks being susceptible to computerization (there are various places to look for this information, but this from two scholars at the University of Oxford is a pretty useful guide)? And, iv) talk to senior people in these industries and occupations to get a sense of how they see technology affecting employment in their industry.

This last point is important: although universities and colleges keep in touch with labour market trends through various types of advisory boards, the question that tends to get asked is “how are our grads doing now?  What improvements could we make so that out next set of grads is better than the current one?”  The emphasis is clearly on the very short-term; rarely if ever are questions posed about medium-range changes in the economy and what those might bring.  (Not that this is always front and centre in employers’ minds either – you might be doing them a favour by asking the question.)

The point of this exercise is not to “predict” jobs of the future.  If you could do that you probably wouldn’t be working in a university or college.  The point, rather, is to try to highlight certain trends with respect to how information technology is re-aligning work in different fields over the long-term.  It would be useful for each faculty to present their findings to others in the institution for critical feedback – what has been left out?  What other trends might be considered? Etc.

Then the real work begins: how should curriculum change in order to help graduates prepare for these shifts?  The answer in most fields of study would likely be “not much” in terms of mastery of content – a history program is going to be a history program, no matter what.  But what probably should change are the kinds of knowledge gathering and knowledge presentation activities that occur, and perhaps also the methods of assessment.

For instance, if you believe (as economist Tyler Cowen suggests in his book Average is Over that employment advantage is going to come to those who can most effectively mix human creativity with IT, then in a statistics course (for instance), maybe put more emphasis on imaginative presentation of data, rather than on the data itself.  If health records are going to be electronic, shouldn’t your nursing faculty be developing a lot of new coursework involving the manipulation of information on databases?  If more and more work is being done in teams, shouldn’t every course have at least one group-based component?  If more work is going to happen across multi-national teams, wouldn’t it be advantageous to increase language requirements in many different majors?

There are no “right” answers here.  In fact, some of the conclusions people will come to will almost certainly be dead wrong.  That’s fine.  Don’t sweat it.  Because if we don’t look forward at all, if we don’t change, then we’ll definitely be wrong.  And that won’t serve students at all.

January 27

The Future of Work (and What it Means for Higher Education), Part 1

Back in the 1990s when we were in a recession, Jeremy Rifkin wrote a book called The End of Work, which argued that unemployment would remain high forever because of robots, information technology, yadda yadda, whatever.  Cue the longest peacetime economic expansion of the century.

Now, we have a seemingly endless parade of books prattling on about how work is going to disappear: Brynjolfsson and McAfee’s The Second Machine Age, Martin Ford’s Rise of the RobotsJerry Kaplan’s Humans Need not Apply, Susskind and Susskind’s The Future of the Professions: How Technology will Transform the Work of Human Experts (which deals specifically with how info tech and robotics will affect occupations such as law, medicine, architecture, etc.), and from the Davos Foundation,  Klaus Schwab’s The Fourth Industrial Revolution. Some of these are insightful (such as the Susskinds’ effort, though their style leaves a bit to be desired); others are hysterical (Ford); while others are simply dreadful (Schwab: seriously, if this is what rich people find insightful we are all in deep trouble).

So how should we evaluate claims about the imminent implosion of the labour market?  Well first, as Martin Wolf says in this quite sober little piece in Foreign Affairs, we shouldn’t buy into the hype that “everything is different this time”.  Technology has been changing the shape of the labour market for centuries, sometimes quite rapidly.  We will go on changing.  The pace may accelerate a bit, but the idea that things are suddenly going to “go exponential” are simply wrong.  Just because we can imagine technology creating loads of radical disruption doesn’t mean it’s going to happen.  Remember the MOOC revolution, which was going to wipe out universities?  Exactly.

But just because the wilder versions of these stories are wrong doesn’t mean important things aren’t happening.  The key is to be able to lose the hype.  And to my mind, the surest way to get past the hype is to clear your mind of the idea that advances in robotics or information technology “replace jobs”.  This is simply wrong; what they replace are tasks.

We get a bit confused by this because we remember all the jobs that were lost to technology in manufacturing.  But what we forget is that the century-old technology of the assembly line had long turned jobs into tasks, with each individual performing a single task, repetitively.  So in manufacturing, replacing tasks looked like replacing jobs.  But the same is not true of the service sector (which covers everything from shop assistants to lawyers).  This work is not, for the most part, systematic and routinized, and so while IT can replace tasks, it cannot replace “jobs”  per se.  Jobs will change as certain tasks get automated, but they don’t necessarily get wiped out.  Recall, for instance, the story I told about ATMs a few months ago: that although ATMs had become ubiquitous over the previous forty years, the number of bank tellers not only hadn’t decreased, but had actually increased slightly.  It’s just that, mainly, they were now doing a different set of tasks.

Where I think there are some real reasons for concern is that a lot of the tasks that are being routinized are precisely the ones we used to give to new employees.  Take law, for instance, where automation is really taking over document analysis – that is, precisely the stuff they used to get articling students to do.  So now what do we do for an apprenticeship path?

Working conditions always change over time in every industry, of course, but it seems reasonable to argue that job change in white-collar industries – that is, the ones for which university education is effectively an entry-requirement – are going to change substantially over the next couple of decades.  Again, it’s not job losses; rather, it is job change.  And the question is: how are universities thinking through what this will mean for the way students are taught?  Too often, the answer is some variation on “well, we’ll muddle through the way we always do”.  Which is a pretty crap answer, if you ask me.  A lot more thought needs to go into this.  Tomorrow, I’ll talk about how to do that.

September 24

Youth Unemployment: Some Perspective, Please

Every once in awhile, you’ll hear folks talking about the scourge of youth unemployment.  If you’re really lucky, you’ll hear them describe it as a “crisis”.  But how bad is youth unemployment, really?

Well, the quick answer is that you can’t really separate youth unemployment from general unemployment.  As Figure 1  shows, one is a function of the other.

Figure 1: Youth Unemployment Rates, 15 and Over vs. 15-24 Age Groups, Canada, 1976-2015 (Source: CANSIM 282-001.  Seasonlly-Adjusted)

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As Figure 1 also shows, compared to most of the last 40 years, youth unemployment is currently fairly low.  In the 476 months since the Labour Force Survey began, it has been lower than it is today only 29% of the time.  If this is a crisis, it is of exceedingly long duration.

Now, what some people get upset about is the fact that youth unemployment is “twice the overall rate”.  But is that really historically unique?  Figure 2 shows the answer.

Figure 2: Ratio of 15-24 Unemployment Rate to 15 and Over Unemployment Rate (Source: CANSIM 282-001)

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So, there are two things here on which to remark.  The first is that 2:1 isn’t an immutable ratio: it has changed over time, most notably in the mid-90s when it increased significantly.  The second thing is that the ratio is a lot more seasonal than it used to be.  It’s not entirely clear why this happened.  I had thought initially that it might have something to do with increasing PSE participation rates, but that doesn’t seem to be the case.  A mystery worth pursuing, at any rate.

In any case, we should also ask: how does Canada look in comparison to other countries?  In Figure 3, I show the ratio of youth unemployment to overall unemployment in various countries.  Canada’s current ratio – about 1.96 – is not world-beating, but significantly better than the OECD average (2.2). It suggests that the question of youth employment ratios is actually something all economies – with the exception of the Netherlands and Germany, perhaps – deal with.

Figure 3: Ratio of Youth Unemployment Rate to Overall Unemployment Rate, Selected Countries (Source: OECD)

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To get right down to brass tacks: workers gain value with experience.  By definition then, young workers are, on average, less valuable than older workers.  This is the reason why they have trouble getting hired.  And this is why, in the end, the only way to bring down youth unemployment is to give them more value to employers; which is to say, they need more job-ready skills.

Could we do better than we are doing?  Yes, of course.  But even the best countries in the world aren’t doing much better than we are.  So, let’s work on this problem, but maybe tone down the rhetoric about the its extent.

September 02

Some Basically Awful Graduate Outcomes Data

Yesterday, the Council of Ontario Universities released the results of the Ontario Graduates’ Survey for the class of 2012.  This document is a major source of information regarding employment and income for the province’s university graduates.  And despite the chipperness of the news release (“the best path to a job is still a university degree”), it actually tells a pretty awful story when you do things like, you know, place it in historical context, and adjust the results to account for inflation.

On the employment side, there’s very little to tell here.  Graduates got hit with a baseball bat at the start of the recession, and despite modest improvements in the overall economy, their employment rates have yet to resume anything like their former heights.

Figure 1: Employment Rates at 6-Months and 2-Years After Graduation, by Year of Graduating Class, Ontario

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Now those numbers aren’t good, but they basically still say that the overwhelming majority of graduates get some kind of job after graduation.  The numbers vary by program, of course: in health professions, employment rates at both 6-months and 2-years out are close to 100%; in most other fields (Engineering, Humanities, Computer Science), it’s in the high 80s after six months – it’s lowest in the Physical Sciences (85%) and Agriculture/Biological Sciences (82%).

But changes in employment rates are mild compared to what’s been happening with income.  Six months after graduation, the graduating class of 2012 had average income 7% below the class of 2005 (the last class to have been entirely surveyed before the 2008 recession).  Two years after graduation, it had incomes 14% below the 2005 class.

Figure 2: Average Income of Graduates at 6-Months and 2-Years Out, by Graduating Class, in Real 2013/4* Dollars, Ontario

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*For comparability, the 6-month figures are converted into real Jan 2013 dollars in order to match the timing of the survey; similarly, the 2-year figures are converted into June 2014 dollars.

This is not simply the case of incomes stagnating after the recession: incomes have continued to deteriorate long after a return to economic growth.  And it’s not restricted to just a few fields of study, either.  Of the 25 fields of study this survey tracks, only one (Computer Science) has seen recent graduates’ incomes rise in real terms since 2005.  Elsewhere, it’s absolute carnage: education graduates’ incomes are down 20%; Humanities and Physical Sciences down 19%; Agriculture/Biology down 18% (proving once again that, in Canada, the “S” in “STEM” doesn’t really belong, labour market-wise).  Even Engineers have seen a real pay cut (albeit by only a modest 3%).

Figure 3: Change in Real Income of Graduates, Class of 2012 vs. Class of 2005, by Time Graduation for Selected Fields of Study

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Now, we need to be careful about interpreting this.  Certainly, part of this is about the recession having hit Ontario particularly harshly – other provinces may not see the same pattern.  And in some fields of study – Education for instance – there are demographic factors at work, too (fewer kids, less need of teachers, etc.).  And it’s worth remembering that there has been a huge increase in the number of graduates since 2005, as the double cohort – and later, larger cohorts – moved through the system.  This, as I noted back here, was always likely to affect graduate incomes, because it increased competition for graduate jobs (conceivably, it’s also a product of the new, wider intake, which resulted in a small drop in average academic ability).

But whatever the explanation, this is the story universities need to care about.  Forget tuition or student debt, neither of which is rising in any significant way.  Worry about employment rates.  Worry about income.  The number one reason students go to university, and the number one reason governments fund universities to the extent they do, is because, traditionally, universities have been the best path to career success.  Staying silent about long-term trends, as COU did in yesterday’s release, isn’t helpful, especially if it contributes to a persistent head-in-the-sand unwillingness to proactively tackle the problem.  If the positive career narrative disappears, the whole sector is in deep, deep trouble.

April 13

Five Questions for Ken Coates

So, Ken Coates of the University of Saskatchewan published a paper the week before last arguing that there were too many university students and not enough trades students, so we should reduce university enrolments by a third and what the hell is wrong with kids today anyway?  Despite being not much more than a warmed-over version of the paper he co-authored with Rick Miner in IRPP a couple of years ago, it got some attention because it played directly into both the elitist view of universities (all these students devalue the degree!) and the weird view some in Canada have that the only problem with the labour market is that workers are too stupid to see the opportunities in front of them.

The paper is a hot mess of unfounded assertions and questionable logic which raises at least 5 questions (I’d guess readers can come up with a few more of their own) which I think the author needs to answer before the paper can be taken seriously.

1.Why does Coates keep saying today’s young people feel too “entitled”? What does he mean by this disparaging term?  What evidence is there to suggest this generation display a greater sense of entitlement than any previous generation?  Or is this just an arrogant way of saying youth don’t do what Coates thinks they should do?  (Also: does Coates spend a lot of time yelling at kids to get off his lawn?)

2. Why does Coates repeatedly denigrate the idea that “the labour market should be directed by the uninformed educational choices of 17-19 year-olds”?  Has it not ever been thus?  Was there some golden age in Canadian history when the state or business made career decisions on young peoples’ behalf and where economic outcomes were demonstrably better?  Can Coates name a democratic nation where 17-19 year-olds don’t make their own educational choices?  

3. Why, if as Coates claims, no one can know the future of the labour market, is he so damn sure we need more college/trades graduates?  Coates: “it is extremely difficult to anticipate downstream market demand for employees”.  Coates: “Governments have a poor track record when it comes to picking winners in the economy”.  Well, if that’s true, isn’t this entire paper – which based on the idea that we know that more college/trades education and less university education is a good idea – an enormous waste of time?  (Or, more simply, “wrong”?)

4. What evidence does Coates have for saying Canadians are defaulting “to the traditional view that a university degree is the best avenue to prosperity” and “turning their children’s dreams against blue-collar work”?  Here’s a quick summary of educational attainment for Canadian males, aged 30 or under, who did their post-secondary education in Canada:

 Figure 1: Highest Level of Educational Attainment, Males Aged 30 and Under, Canada, 2010

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Got that?  Among males under 30, there are almost as many apprentice and trades certificate holders as there are bachelor’s holders.  Throw the colleges in and it’s more than two to one.  Another way to look at the data is to compare the number of males with Bachelor’s degrees with those working in those “in-demand” area Coates is continually babbling about – construction trades, mechanics, precision production, transportation, and all Engineering sub-fields who have less than a bachelor’s degree.  Here are the numbers:


Figure 2: Bachelor’s Degree Holders vs. Workers in Five Key Trades, Males under 30, Canada, 2010

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 In short: Averse to blue-collar work?  Not even vaguely true.

 

5.   Why does Coates think blue-collar work is so hot anyway?  The problem with blue collar work – apart from the fact that it’s seriously gender-biased – is that it’s cyclical.  A lot of people in Canada – including Coates, apparently – forget that because the current commodities cycle has been going on so long, but when commodities prices fall blue collar outcomes are pretty terrible.  Back in the mid-90s, when oil was cheap, we only had about a quarter as many apprentices as we do now.  In the 1980s, unemployment rates for trades grads was over 15%.  How good do you think blue collar will look if oil is permanently back down to $50 and China’s growth rate heads down to 3%?

Coates does have a point in that universities need to do more to make their graduates employable, and he’s also right that more post-secondary learning needs to be experiential in nature.  But to go from there and say that we need fewer university graduates is just a baseless assertion.  He can and should do better.

February 04

The “Skills for Jobs Blueprint”

I don’t pay as much attention as I should on this blog to matters British Columbian, mostly because I don’t get out there often enough.  But the province’s “Skills for Jobs  Blueprint” cries out for some critical treatment, because frankly it’s not all that smart.

Turn back the clock a bit: in April 2014, the BC government rolled-out a series of policies that were collectively branded as the “Skills for Jobs Blueprint”.  Much of it consisted of relatively sensible changes to trades training in view of the upcoming Liquid Natural Gas (LNG) mega-project.  However, included in this package was some other stuff that sounded like it had been dreamt up on the back of a cocktail napkin.  These included: more generous student aid to students enrolled in disciplines related to “high-demand” occupations, and requiring institutions to spend at least 25% of their budgets on disciplines related to “high-demand” occupations (to be phased in by 2017-18).

The student aid pledge was just silly: if these are truly high-demand occupations, they’ll pay more, and students will have less problem re-paying loans.  Why would you give more money to these people? The requirement for institutional spending had the potential to be ridiculous, but wasn’t necessarily so.  Whatever purists might think, public authorities spend money on higher education mainly to improve the local economy; and besides, depending on how broadly “high-demand” occupations were described, they might already be spending 25%.  There was the possibility, in other words, that it would require no change at all on institutions’ part.  But that would depend crucially on how BC defined “high-demand”.

This is where it gets maddening.  When the government finally released its definition of high-demand, it had nothing to do with a skills gap, and was not in any way based on analyses of supply and demand.  Instead, it was simply the 60 occupations with the most job openings.  Or, put differently: according to the government of BC, the highest-demand occupations are simply the 60 largest occupations.  Oy.

Now, it’s hard to tell whether institutions actually line up 25% of their spending on priority disciplines related to the “big 60”, since BC doesn’t work on any kind of funding formula.  However, it is possible to reverse engineer this kind of thing by looking at enrolment patterns, and assuming that spending weights are similar to what one would see in other provinces (read: Ontario and Quebec), as we demonstrated back here.  Which is what my colleague Jackie Lambert did.

The results were instructive.  Quite clearly, all colleges meet the test.  Among universities, it’s slightly more complicated.  If you simply take all enrolments in the academic programs most directly related to 59 of the 60 “most desired” occupations, and weight them in the ON/QC style, you find that province-wide, these programs already make up 32% of expenditures, and all universities except Emily Carr would meet the 25% cut.  However, the 60th occupation with the most “demand” is university professors (yes, really), which technically can be filled by doctoral students from any program.  Throw those in and you end up with almost 47% of all dollars being spent on “priority” areas.

Ideally, this result would mean the province could just declare victory (“Look!  25%! We showed them!”) and go home.  But these days, government can’t just be seen to be ordering institutions about; they have to actually be ordering them about.  So my guess is BC will avoid declaring victory, and instead use the ambiguity created by the lack of a funding formula to jerk institutions around a bit “(Spend here!  Don’t spend there!”), just to show everyone who’s boss.

Plus ça change…

August 11

Improving Career Services Offices

Over the last few years, what with the recession and all, there has been increased pressure on post-secondary institutions to ensure that their graduates get jobs.  Though that’s substantially the result of things like curriculum and one’s own personal characteristics, landing a job also depends on being able to get interviews and to do well in them.  That’s where Career Services Offices (CSOs) come in.

Today, HESA released a paper that looks at CSOs and their activities.  The study explores two questions.  The first question deals specifically with university CSOs and what qualities and practices are associated with offices that receive high satisfaction ratings from their students.  The second question deals with college career services – here we did not have any outcome measures like the Globe and Mail, so we focussed on a relatively simple question: how does their structure and offerings differ from what we see in the university sector?

Let’s deal with that second question first: college CSOs tend to be smaller and less sophisticated than those at universities of the same size.  At first glance, that seems paradoxical – these are career-focussed organizations, aren’t they?  But the reason for this is fairly straightforward: to a large extent, the responsibility for making connections between students and employers resides at the level of the individual program rather than with some central, non-academic service provider – a lot of what takes place in a CSO at universities takes place in the classroom at colleges.

Now, to universities, and the question: what is it that makes for a good career services department?  To answer this question we interviewed CSO staff at high- medium- and low-performing institutions (as measured by the Globe and Mail’s pre-2012 student satisfaction surveys) to try to work out what practices distinguished the high-performers.  So what is it that makes for a really good career services office?  Turns out that the budget, staff size, and location of Career Services Offices aren’t really the issue.  What really matters are the following:

  • Use of Data.  Everybody collects data on their operations, but not everyone puts it to good use.  What distinguishes the very best CSOs is that they have an effective, regular feedback loop to make sure insights in the data are being used to modify the way services are delivered.
  • Teaching Job-seeking Skills.  Many CSOs view their mission as making as many links as possible between students and employers.  The very best-performing CSOs find ways to teach job search and interview skills to students, so that they can more effectively capitalize on any connections.
  • Better Outreach Within the Institution.  It’s easy to focus on making partnerships outside the institution.  The really successful CSOs also make partnerships inside the institution. One of the key relationships to be nurtured is academic staff.  Students, for better or for worse, view profs as frontline staff and ask them lots of questions about things like jobs and careers.  At many institutions, profs simply aren’t prepared for questions like that, and don’t know how to respond.  The best CSOs take the time to reach out to staff and partner with them to ensure they have tools at their disposal to answer those questions, and to direct students to the right resources at the CSOs.

If you want better career services, there’s your recipe.  Bonne chance.

September 03

What The Heck Did You THINK Was Going to Happen?

I’m a bit bewildered by some of the recent commentary about declining returns to education, most notably last week’s paper from CIBC on the subject.  While the actual report was not nearly as stupid as the ream of press coverage that followed it, it still had a few howlers, and definitely lacked critical thinking.

First, the howlers.  1) The returns to Bachelor’s degrees are not declining; they are, in fact, growing at a slightly slower rate than at other levels of education, which isn’t the same thing.  2) The gap between college and university graduates is closing, but it’s because college grads are doing better, not because university grads are doing worse.  3) Yes, the difference in unemployment rates between university and high school graduates is, as the report says, only about 1.5 percentage points (which is down considerably over the last decade or so).  But why emphasize that fact when the gap in employment rates – which are presumably much more important, and yet were unmentioned by the report – remains over 12 percentage points?  There’s too much cherry-picking of data here for my taste.

But look, here’s the bigger picture: it really shouldn’t be a surprise if graduate wages are stagnating, and there’s one very simple reason for this: there are way more graduates than there used to be.  Between the late ‘90s and the late ‘00s, the country went from having 600,000 undergraduates to having 900,000 undergraduates.  That’s an extra 75,000-90,000 graduates hitting the labour market every year.  That’s a heck of a supply shock.

The surprise, frankly, isn’t that university graduates’ wages aren’t climbing as quickly as those of college and high school graduates.  The surprise is that they’re rising at all.  This suggests that there is, in fact, enormous labour market demand for the skills provided by university students; if there weren’t wages would have decreased.

I pointed this out on Twitter the day the CIBC paper came out only to learn that for many people – including people who would describe themselves as fiercely progressive – even the hint that relative rates of return might be falling turned them into foaming conservatives with respect to university admissions.  Too many students!  We need a labour market policy!  Etc., etc.

I mean, what exactly did everyone think was going to happen when we allowed enrolment to rise by 50%?  That there would be no change in returns?  And even if there was a slight fall in returns – who cares?  In a democracy, isn’t it better to have 150 people earning good returns than 100 people earning brilliant ones?

Yeesh.

August 12

The Neo-Soviet View of Education and the Labour Market

Recently, I had a conversation with someone in the trucking industry who argued that the phenomenon of Arts grads working minimum wage jobs while trucking companies were having problems hiring people at $30/hour was prima facie evidence for a “skills mismatch” for which the education system was responsible.  Seriously.  Turns out that a lot of people – including a hell of a lot of people in government from all political stripes – seem to think that a “skills mismatch” is what happens any time some jobs in certain fields aren’t getting filled at current wages.  The idea that people might be making decisions based on personal preferences doesn’t seem to occur to them; and the concept that wages might need to rise in order to overcome these preferences (with all the time alone on the road, and hours not compensated due to loading delays, etc, $30/hr simply isn’t enough, but an extra $5/hour might do the trick) definitely doesn’t occur to them.  Rather, say these folks, it is the preferences themselves which must change – and government (and schools and universities) is responsible for changing them.

Take, for instance, this recent piece from BC tech entrepreneur Ryan Holmes.  It is legendarily incoherent, but I’m told it represents the views of much of the tech sector, so it’s worth a read.  We’re falling behind the US in tech, it says, because of a brain drain.  All our best are heading south (we’re not told why, but presumably pay is an issue, no?).  We could import people to staff our tech sector instead, but this, we are told, is just a temporary fix.  (Why this is so when Silicon Valley’s success is almost entirely down to immigration is not explained).  No, the real solution is to train more people for tech jobs, and the barrier to this is that we don’t spend enough time in high school explaining to them how great tech careers are, etc etc.

If tech careers are so great, why is it up to government to sell them to students?   (“selling” may be too polite a term – Holmes wants governments to “funnel” students into engineering programs, which suggests a more directive approach.)  Maybe the problem is that while tech is naturally attractive for some, for many others it seems brutal, unstable and intimidating.  That doesn’t mean they won’t consider it – but it does mean that at current compensation levels, fewer people than the tech industry considers optimal think it would be a good fit for them.

If this were a market economy, we’d just tell businesses to raise the damn wage levels and see what happens.  But this is Canada, and our business community apparently doesn’t believe in the price mechanism as far as labour is concerned.  Instead, we blame government and schools for not sufficiently manipulating the supply of labour to favour specific industries.

Oy.  Come back Gosplan, all is forgiven.

August 06

Correlation and Causation in Technical Education

Stop me if you’ve heard this one before:

“In many Northern and Central European countries, including Switzerland and Germany, there are robust apprenticeship programs. In both of those countries, youth unemployment is very low compared to Canada and the U.S.”

Or this:

“As the economy changes, however, it is increasingly clear that this is the polytechnic moment… in the recent recession, youth unemployment was lower in countries with strong vocational training programs.”

There are three propositions here.  One is that Canada’s apprenticeship/vocational training/polytechnics systems are weaker than those in what for the sake of brevity I will call Germanic Central Europe (GCE).  Another is that unemployment is lower in GCE than it is in Canada.  Finally, it is heavily implied that there is some sort of causal relationship at work here; that GCEs have lower unemployment rates because of their educational systems.

Let’s take those three in turn.    It is certainly true that GCE countries have more apprentices than we do. But the term “apprenticeship” means something different over there.  As I pointed out back here, the reason places like Germany have more apprentices is because their set of apprenticeable trades is much wider than ours.  If you limit the analysis to just skilled trades, Canada’s apprentice numbers actually look about the same as Germany’s (our completion rates are much lower – but that’s a less sexy story).

As for “vocational education” and “polytechnics” (terms that are not synonyms): Canada already has the largest non-university tertiary system on the planet.   True, we don’t have a lot of “polytechnics”, but the recent trend in GCE has been to turn these institutions into degree-granting “Universities of Applied Science” with professional rather than vocational orientations.  So yes, GCEs’ technical education systems are different from ours.  But their sources of strength aren’t necessarily in “vocational” training the way we define it.

With respect to unemployment rates, it’s quite true that unemployment among 15-24 year-olds in places like Germany (8.1%), Austria (8.7%) and Switzerland (2.8%) are lower than in Canada (13.6%).  But youth unemployment can’t be examined in isolation: it is a function of overall economic conditionsThe ratios of youth unemployment to overall unemployment tell a different story: Canada’s rate is 1.92, Austria’s 1.85, Germany’s 1.53 and Switzerland’s a freakish 1.04.  Austria’s purported advantage, at least, disappears completely on this more sensible comparison

Finally, the issue of causation.  Dial things back about twelve years; Germany had the same “dual” system of apprenticeships, but unemployment rates were twice what they are now.  If apprenticeships “cause” low unemployment now, did they also “cause” high unemployment twelve years ago?  Obviously not.  Claiming causation in one period but not another looks like cherry-picking.

In short, it’s good to invest in top-notch technical education, but be wary of over-ambitious claims made about its impacts.

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