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Janet Lane is the director of the Canada West Foundation’s Human Capital Centre. T. Scott Murray is the principal of DataAngel Policy Research Inc. They are the authors of Literacy Lost: Canada’s basic skills shortfall.

A full quarter of Ontario postsecondary graduates don’t have the reading and math skills needed to do well in their careers, according to a recent Higher Education Quality Council of Ontario report. The “basic skills” problem isn’t limited to Ontario or to postsecondary students. International literacy assessments show that fully 40 per cent of Canada’s work force doesn’t have the literacy skills to be as efficient or productive as possible at work. These basic skills are also needed to continue to learn easily and efficiently.

Finance Minister Bill Morneau’s 2019 budget is expected be heavy on skills training. If Mr. Morneau wants skills training to actually work, more Canadian workers need to boost their basics, otherwise they won’t do well in that skills training – and Canada’s economy will suffer.

Science and technology – the STEM skills – are sexy and deservedly get a lot of attention as Canada aims to improve the skills of the work force. But research shows that improving the old fashioned three Rs – reading, writing and arithmetic – will make people more employable, improve job performance and could potentially add billions of dollars to the Canadian economy every year.

According to the Programme of International Assessment of Adult Competencies (PIAAC), in 2011, the literacy skills of 42 per cent of working-aged Canadians do not meet the bare minimum required by most of the jobs being created in the economy. This minimum level is also the level needed to learn and to use what has been read in new and different situations. So, better literacy skills help people keep pace with new and changing demands of the workplace, so they can keep their jobs – or find new ones as needed.

Analysis of the PIAAC results also shows that people with the highest levels of literacy skill are now being paid a higher premium for their skills than in the past – suggesting that there is a shortage of workers with adequate literacy skills. This shortage encourages some employers to reduce the reading level required by their jobs – by making them more routine and adding layers of supervision. This only makes things worse, as it leads to skill loss on the job – right at the time when lower-skilled jobs are threatened by automation.

Canada’s literacy problem is complex, and the solutions are too, but we must do something about it – for our students, workers and society, according to a recent report from Canada West Foundation, Literacy Lost: Canada’s Basic Skills Shortfall.

Canada’s education and training systems must make sure that their graduates have high enough levels of basic skills. As well, employers would see benefits from embedding literacy and numeracy skills in all workplace training, and then changing their work processes to use the skills available. This can be as easy as asking employees to solve more of the everyday problems they encounter in the course of their work themselves, rather than relying on their supervisors.

The benefits of better basic skills should be of interest to Mr. Morneau, too. An analysis using data from the OECD PIAAC study, by Simon Wiederhold and Guido Schwerdt of Konstanz University in Germany, found that improving the average literacy skills of a country’s work force by just 1 per cent leads, over time, to a 5-per-cent rise in productivity and a 3-per-cent rise in GDP – double the impact observed in 2003. Using today’s GDP numbers, for Canada, that’s about $54-billion a year – every year. That would be a welcome contribution to the economy – and more than enough to pay for all the skills training this country needs.

Canada is putting a lot of effort into helping people build the skills required to innovate, and to be competitive and productive in the global economy. And the technical skills are very important. However, innovation can come, too, from workers being active problem-solvers in their own workplaces. Dr. Schwerdt and Dr. Wiederhold also showed that raising average literacy levels by increasing the skills of people with the lowest scores yields even higher rates of productivity growth.

Putting more emphasis on basic skills will help people to adapt to their changing jobs and be better able to find new jobs when automation reduces the number of low-skilled jobs. It will have the added advantage of helping to make the country as a whole more productive – something that has plagued finance ministers for years.

Mr. Morneau, you’ve got the right idea, upgrade work-force skills. But real economic success will come from improving the basic skills of the work force first.

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