Jeffrey Boggs is an associate professor who specializes in economic geography at Brock University.
Apparently Ontario's labour market has a problem. Plebians, pundits and politicians say employers face a cataclysmic skills mismatch, or sometimes a skills gap. Or applicants are overeducated, or underadapted, or overcredentialed.
Positions are reputedly going unfilled because employers have trouble finding workers with the right hard skills, soft skills, IT skills, STEM skills, writing skills or presentation skills, not to mention traits such as punctuality, discipline or a can-do attitude.
We know these problems exist because reports say so. Mind you, these reports are often written by consultants hired by employers, industry associations or chambers of commerce.
A common prescription for this purported ailment is to make the higher-education sector produce workers who are better suited to today's work force.
But before we start implementing solutions to an allegedly serious problem, let's take a breath and review some facts.
Proponents of skills mismatch claims generally blame universities for not doing enough to turn students into "work-force ready" workers. An alleged glut of underemployed or unemployed graduates is provided as evidence of a skills mismatch. However, mainstream economic theory suggests that if there is a skills mismatch, it is a divergence between the supply of workers and the demand of employers.
In fields without enough qualified workers, in the short run, you'd expect wages to rise as companies compete for a limited pool of candidates. Managers might grumble about high wages, especially if the work is labour intensive, but what a lovely time those workers would have, picking and choosing among employers.
In the longer term, companies with labour-intensive work might substitute machines for people, even as ambitious people strive to acquire those in-demand skills associated with higher pay. One way these people could get those skills is to be hired into an entry-level position, then be trained in-house with the necessary firm-specific skills. In other words, the employer makes an investment in its work force.
Another way applicants could get those work-specific skills is to pay for the training themselves. Frankly, for general, industry-specific and occupation-specific skills, workers usually already do this, in part by going to school. General skills such as literacy and numeracy are acquired through K-to-12 education, while industry – or occupation-specific – skills are gained through a mix of apprenticeships, volunteering, internships and colleges.
And let's not forget universities. They provide students the opportunity to develop not just industry- or occupation-specific skills, but – even in the much maligned humanities or social sciences – the critical-thinking skills needed to become a life-long learner.
For practical reasons, formal schooling cannot provide training in firm-specific skills, or skills that relate to the unique functioning of this or that company. Firm-specific skills need to be acquired in the context in which they will be used.
Even if we ignore the cost of higher education providing up-to-date firm- or site-specific training, curriculum developers have no crystal ball to foresee all the changes that will shape market conditions and identify skills that will and won't be needed in 10 years. If industries can't reliably predict the future, it is asinine to expect higher education to do so.
What evidence do we see for this alleged skills mismatch? Ontario's own labour-market data does not support such a claim. There is no overheated labour market caused by an undersupply of qualified workers. Pay rates aren't skyrocketing as they would if employers were caught in a spiral of upward wages. Waves of firms aren't going out of business because they cannot find enough skilled workers.
And those consultants' reports asserting a skills mismatch? Scrutinize them beyond the executive summary, and the data often don't substantiate the claims. In cases in which they do provide information about employers' training practices (e.g., the Canadian Chamber of Commerce's 2013 Upskilling the Workforce: Employer-Sponsored Training and Resolving the Skills Gap, one of the more level-headed reports), they reveal that employers are actually spending less and less on employee training.
If employers care enough about their own operations, they should invest in training their work force in firm-specific skills.
Maybe we don't have a skills mismatch. Maybe we have a wage mismatch. Or a disconnect between employers' sense of entitlement, and their responsibility to their own operations.