Anecdotes about university graduates languishing in their parents' basements make for great cocktail party conversation, but the data says something very different.
There is no question that since the 2008 economic crisis, the labour market has been tough and that this has affected employment for everyone, especially young people. We've all heard the arguments that university graduates are not getting jobs in their fields, and that what the labour market really needs are tradespeople and college graduates from career specific programs. Yet, as University Works – my analysis of data from Statistics Canada and Ontario's Ministry of Training, Colleges and Universities shows – recent university graduates have fared significantly better than graduates from other postsecondary institutions. University graduates in Ontario have the best employment rates, make the most money and are more likely to get a job in their field than are students with other credentials.
Since 2008, employment for young university graduates (25– to –29-year-olds) increased by 21 per cent while those with a college or trades certificate experienced negligible or negative employment growth. Unemployment is comparable for recent college and university graduates, even though the number of university graduates has exploded over the last 10 years. More people are choosing university, and the labour market is absorbing this growth well.
We are also often told that large numbers of young university graduates are underemployed and, yet, recently employed university graduates are more likely to report that their work is related to their studies than are recent college graduates.
University graduates also make the most money, fresh out of school and over a lifetime. Six months after graduation, university graduates earn 30 per cent more than college graduates. The income gap only increases with time, as the full report to be released tomorrow shows. For the Ontario population as a whole, university graduates earned 50 per cent more than college graduates, and more than twice the amount of high-school graduates. Over a 40-year period, university graduates earn on average $900,000 more than a college graduate and $1.4-million more than someone who graduated from high school. This earnings premium occurs over almost every type of occupation.
There is a lot of talk about a shortage in the trades in Ontario, but we should be careful about making policy based on talk because it is uncertain how many jobs for skilled trades there will be in the future. Since 2008, jobs for tradespeople have decreased and the sector did not experience any shortages. In fact, employment for tradespeople decreased more rapidly than the number of tradespeople in the labour force: It is harder to find a job as a skilled tradesperson than it was four years ago.
Surprised? You shouldn't be. Ontario's manufacturing and natural resource industries were significantly affected by the recession and the appreciation of the Canadian dollar. This led to massive layoffs in industries that employ tradespeople. This isn't to say that there is no need for the trades. As the United States recuperates and our dollar devalues, we can expect increased economic activity in various sectors that hire tradespeople, but it is going to take time for jobs to materialize.
What is true for tradespeople, who have been the most affected by this recession, is also true for university and college students. As we get out of this recession, employment demand will increase for everyone.
Ontario's youth who might have felt discouraged by misinformation about the value of a university education should make decisions based on this data. It tells them not to let their dreams be crushed. If you want to go to university, if this is what you think is best for you, do so knowing that you will have the best employment prospects.
Cecilia Brain is economist and senior policy analyst for the Council of Ontario Universities.