Higher Education Strategy Associates

Who Should Benefit from Skills Training Money?

We seem to be in a period in Canada where money for “skills” is in vogue, mainly because it is seen as a panacea for lots of quite separate problems. At a really high-order level, you’ve got the Innovation ministry in Ottawa pounding the drum on skills because the tech industry says skills are a bottleneck to whatever kind of tech-powered Nirvana the Minister imagines Canada to be headed towards. And then you’ve got the Employment and Social Development Ministry and to an extent the PMO who see investing in skills as a social cohesion play – more skills means more jobs means we won’t look like the US rust belt and we can avoid a nasty bout of populism up here.

I’ll focus on the social cohesion play for the rest of this blog because no one wants to hear my views on the Innovation Minister’s views on coding again (though on the off-chance you do, see here). The mostly-unacknowledged problem we have right now is that there are three entirely separate possible foci for skills training, and very little (as far as I can tell) strategic direction about where we should be spending our dollars.

The first direction is pretty simple: providing money to train people who have lost their jobs. This is what Employment Insurance has done for over forty years. It’s not particularly good at it; but then, it’s not like any other countries are particularly good at it either. Re-training people mid-career is hard, especially if they don’t have an especially high skill level to begin with.

Then there’s the second direction, the one the Harper government tried to take us down, a bit. And that’s providing money to employers to provide more skills to their own workforce. The argument here – in part – is that we can to some extent prevent unemployment by subsidizing companies to invest more in their employees’ skills and thus make them more competitive. This is essentially what the Canada job Grant was supposed to do.

Finally, there’s a third direction, which is to help people develop their own skills, shall we say, prophylactically. That is, help workers get whatever skills they think they need in order to make themselves more flexible, and more employable. Now obviously you don’t need policy to do this – in a market economy people can invest in their own skills as they like, but repeated evidence from around the globe shows that if you do that then you tend to get a Matthew effect: those that already have tend to get more.

It’s never entirely clear why those with lower skills don’t invest on their own. Is it money?  Time? General disinclination to spending time in a classroom? But they don’t, so people are always looking for ways to try to entice them.  Not many schemes have worked well, however. One notable attempt to do this in the UK via something called “individual learning accounts” ended in dramatic failure and mass fraud.

One obvious possibility to encourage this kind of training would be to create some kind of guarantee for workers to be able to take time off for training, an idea which was contained in the 1985 MacDonald Commission (which dubbed it a “Time Bank”). Ontario could have gone this route last month when it announced its labour reform package, but instead decided to give everyone a third week of paid holiday instead. Missed opportunity.

The point I want to make here is not just that these are three different target “markets” for training, it’s that they are to some extents at cross-purposes with one another. For instance, employers really like the second type, because they get to direct where the training goes. They are somewhat less keen on the third kind, because if individuals are investing in their own skills, they are probably to some extent doing so to give themselves insurance and make themselves more mobile.

Because funds are not inexhaustible, there are trade-offs between subsidizing different types of training. At some point, if we’re going to get skills training policy right, the question of what skills, for who, and when, have to be answered openly and trade-offs have to be analyzed and debated. We’re not there yet – right now it’s mostly an inchoate “Need moar Skillz!” But we need to get there soon. Otherwise this is all a waste of time.

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2 Responses to Who Should Benefit from Skills Training Money?

  1. Rick Williams says:

    Like your three categories. Here’s a fourth: in an economy that is generating more and more “precariat” jobs, do we need a strategy to qualify people (particularly young people) to pursue ongoing careers in more than one occupation simultaneously. There are fewer and fewer full-time, year round jobs that offer a progressive career ladder. More and more people will find themselves patching together manageable livings by becoming skilled workers in two or more workplaces, some requiring specific technical skills, others higher literacy skills, and others arcane sectoral knowledge. Making progress in life is already less about climbing one ladder, and more a game of Snakes and Ladders. I’m currently completing a study of rural seasonal labour markets and coming to the conclusion that, given looming labour shortages due to demographics and urbanization, a number of strategic sectors (tourism, agriculture, construction, forestry, fisheries & aquaculture, etc) will need to pursue “occupational pluralism” strategies to attract and retain new entrants to jobs that are often well-paying, but inescapably seasonal in nature. 3 or 4 months of heavy work (often well paid) and the rest of the year on EI does not cut it in terms of attraction and retention, especially if the jobs are located in more remote areas. If we are not ely ever more heavily on “guest workers”, a modern form of slavery, can our colleges, universities and financial assistance systems prepare young people for the reality of “parallel careers” and occupational and geographic mobility across sectors, rural and urban? As Marx suggested, “to hunt in the morning, to fish in the afternoon, rear cattle in the evening, criticize after dinner”……

  2. Pat says:

    So how would Quebecs system of mandatory employer training fit in? That seems like the most aggressive Canadian equivalent that exists so far.

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