One idea we’re hearing a lot of in the run-up to this federal budget is the idea that unemployment is at least partially driven by a shortage of skilled labour. But is it true?
People who believe this to be true tend to point to a 2010 work by former Seneca College president Rick Miner, called People Without Jobs, Jobs Without People. Mr. Miner’s idea – which actually described a scenario playing out over a matter of decades, not months – was that demographic pressures would require the Canadian education system to begin producing much more highly-skilled labour. But somewhere along the line, the term “skilled labour,” (which in Miner’s work originally meant all jobs requiring post-secondary education) somehow morphed into “skilled trades,” which is a much narrower term.
From there, this idea has morphed further into the notion that the economy would be better if we had – in the words of one unnamed Conservative – “fewer BAs and more welders.” Recent articles in major media have piled on to this notion, with both Maclean’s and the National Post extolling the virtues of careers in the trades, and denigrating Arts degrees as one-way tickets to barista-land.
The problem with all of this is not just that the welder vs. BA argument is unhelpfully reductionist (the vast majority of students in post-secondary are enrolled in neither one nor the other), but it’s also based on an overly rosy view of outcomes of apprentices in the skilled trades.
Take transition rates: The Government of British Columbia – where the unemployment rate is nearly exactly the national average – surveys university, college and apprenticeship program graduates between eight and 20 months after graduation. Between 2009 and 2011, among graduates of sub-baccalaureate programs, the unemployment rate was 11 per cent, among apprentices, it was 10 per cent. Among Bachelor’s degree holders, it was 6 per cent overall. True, it was higher for Bachelors in Arts (8 per cent), but that was still substantially lower than among apprentices from the construction trades (11 per cent)
Take employment rates: For all the talk of shortages in the trades, the fact is that workers in the construction trades are far more likely to be unemployed at any given time than bachelor’s degree holders. Statistics Canada tracks both unemployment and job openings; last summer, at the height of the building season, the ratio of recently unemployed-to-vacancies was 3.0 in the economy as a whole, but 3.9 in the construction trades. The real shortages were in health and public administration, where the ratio was 1.1 and finance/insurance, where it was 1.5:1.
Take income: A recent Statscan examination of wages and education showed that among full-time workers aged 17-34 - that is, ignoring the trades’ higher unemployment rate - the gap between bachelor’s graduates and trades certificate holders was about 25 per cent (less for men, more for women). The study didn’t ask about Bachelors of Arts, specifically, but given what we know from the National Graduates survey about the post-graduate incomes of Arts, it seems likely that BAs still do slightly better than trades graduates, though for males the difference would be negligible. And, it is worth noting, among older workers (i.e over 34) the gap between degrees and trades widens significantly.
It is certainly true that the wage gap for young employed tradespeople has been closing on those of young BA graduates in recent years. This is almost entirely due to increases in compensation to tradespeople working in the hydrocarbons and mining sectors; apart from those sectors; in the rest of the construction trades, pay increases in the last decade have been exactly in line with those in other sectors.
So where do these notions of skills shortages and uber-successful plumbers come from? Mainly from Saskatchewan and Alberta, where skill-shortages do in fact exist thanks to the ongoing resource boom. But skill shortages in these provinces are not limited to skilled trades: though they hardly figure in recent policy discussions, they are at least as acute in the health sector as they are in trades.
Given the regional nature of the shortages, it’s not entirely clear how the federal government has much of a role to play. Some have suggested that it’s important for the federal government to “de-stigmatize” the trades and encourage more young people to choose them. But it’s not as though there is a shortage of apprentices about. Apprenticeship enrolments boomed over the last decade, and we now sit at roughly double the number of enrolments we had fifteen years ago. What hasn’t increased to the same extent is apprenticeship completions. Though the two aren’t directly comparable, discontinuation rates from apprenticeships are far higher than they are in universities and colleges. If those completion rates were to rise nationally, it would go a long way to easing such skill shortages as exist in the Prairies (though it might also exacerbate unemployment in trades elsewhere in the country).
A thriving trades sector is vital to the national economy. There are lots of things we could do to improve trades education, notably shortening program durations to 2-3 years as they are in the rest of the world (Canada’s apprenticeship programs are the world's longest for no discernible reason). Equally, there are things we could do to make Arts graduates more employable, such as increasing the amount of experiential learning in undergraduate programs.
What we shouldn’t do, though, is add capacity to a sector that already has high unemployment and persist in telling a load of half-truths and outright falsehoods about the relative benefits of different types of education. That doesn’t help anyone.
Alex Usher is president of Higher Education Strategy Associates