July 5 (Bloomberg) -- Ellie MacRae is taking summer classes to accelerate a four-year degree in early childhood studies, even as she worries her efforts won’t pay off like her boyfriend’s electrical training.
“Undergraduate degrees don’t get you a job,” said MacRae, 21, who is in her second year at Toronto’s Ryerson University. Her boyfriend “will have an easier time finding a job than me - - there’s just a lot more opportunities in the trades.”
Canadian mining and resource companies such as Calgary-based TransCanada Corp. say they are struggling to find skilled workers while the country’s education system focuses more on preparing high school students for university instead of colleges where trades are taught. Finance Minister Jim Flaherty is increasing funding for training with youth facing joblessness that’s more than twice as high as other workers.
One historical advantage of a university degree has been fading: the jobless rate for those with bachelor degrees was 4.7 percent in June, compared with 5.2 percent for trade school graduates, according to Statistics Canada. Twenty years ago, university graduates had 6.2 percent unemployment, compared with 10 percent for those with trade school certificates.
Producing skilled workers and matching them to the best jobs is critical for Canada, where exports make up one-third of output, shipments that are threatened by lagging productivity and a strong currency.
Choosing the right education is also more important now. Canadians 24 years old and younger faced an unemployment rate last year that was 2.4 times that of workers ages 25 to 54, the highest differential in more than three decades, Statistics Canada data show.
The jobless rate for Canadians between 15 and 24 was 14.3 percent in 2012, up from 11.2 percent in 2007 before the last recession, according to data from the Paris-based Organization for Economic Cooperation and Development. In the U.S., youth unemployment was 16.2 percent in 2012, up from 10.5 percent five years earlier.
Mimosa Kabir learned first-hand the relative value of education in the job market. After earning her four-year bachelor of arts degree in development studies in 2010, she decided to enroll at Toronto-based Humber College for a one-year fundraising certificate because she said she was “very apprehensive about finding work.” She was offered a job before graduation.
“Employers still value the idea of a B.A., but because everyone these days seems to have one, it’s no longer enough,” said Kabir, 24, a fundraising coordinator at the Toronto Public Library Foundation. “There’s just no way to get ‘proven experience’ when everything you’ve been learning is theoretical.”
The country’s education system is the most skewed toward preparing students for university instead of the trades, according to the Conference Board of Canada study of 16 economies. Some 94 percent of high school students were in academic programs in 2010, with the remaining 6 percent in vocational training, according to the board’s annual competitiveness report. In nine of Canada’s peers, the rate of vocational training was more than 50 percent. Comparable U.S. figures were not available because the country defines vocational training differently.
“It means there are fewer people prepared for the jobs that exist in the economy,” said Michael Bloom, vice-president of organizational effectiveness and learning at the Ottawa-based Conference Board. “In Canada, we don’t have language that conveys the idea of high prestige in a trade. In Europe, I think there is more of a vocabulary. We have to find a way to create an opportunity in the school system for kids to make those choices.”
The Petroleum Human Resources Council of Canada said in a May 30 report their industry needs between 125,000 and 150,000 workers by 2022, a staffing level exacerbated by “significant challenges in the availability of skills and talent required.”
The economy is struggling with a “mismatch” between jobs and skills and “it exists in many regions and industries,” Citizenship and Immigration Minister Jason Kenney said in an interview last month. He cited needs beyond resource firms, such as software companies in Waterloo, Ontario and computer game makers in Montreal.
Companies in resource-rich Alberta and Saskatchewan are recruiting nationwide and overseas. Finance Minister Flaherty told reporters in a March 8 press conference he would focus this year’s budget on skills training after he met a university graduate on a Toronto subway who was bagging groceries because he couldn’t find a better job.
Flaherty’s fiscal plan allocated C$1.4 billion ($1.33 billion) for investment-tax credits and C$500 million in grants to train workers, even as other programs were cut in a bid to reduce Canada’s deficit. Some of the measures depend on provincial governments agreeing to renegotiate terms of joint labor-market agreements.
Opposition lawmakers have criticized the government for not doing more to ease unemployment for young Canadians.
“Young Canadians have been left behind in the economic recovery, and the lack of job opportunities is taking a heavy toll on our youth and their parents who are supporting them,” Liberal Party Leader Justin Trudeau said at a press conference June 26.
Statistics Canada reported today that the unemployment rate was unchanged at 7.1 percent in June, still above the 6.2 percent recorded before the last recession began in the fourth quarter of 2008. Youth unemployment was 13.8 percent in June.
Some economists, including Toronto-Dominion Bank’s Derek Burleton, say wage data doesn’t suggest there is a skills crisis. “There is no real smoking gun on a crisis with respect to skills,” he said. He researched wages over 10 years ending in 2010 for a February report that found occupations in highest demand - trade, technicians and professional groups - have not recorded above-average pay increases.
The Bank of Canada’s quarterly survey of businesses reports labor shortages also remain below the pre-recession mark. Twenty-two percent of companies surveyed in the first quarter said they faced shortages, down from 41 percent at the start of 2007.
University of Ottawa President Allan Rock, a former Canadian industry minister, defended the value of four-year degrees in a speech May 9 entitled “The ‘Skills Mismatch’ and the Myth of the Irrelevant University.”
Rock cited Canadian banks seeking students taking arts instead of business, and Canadian schools being asked by Chinese and Indian educators for advice on how to widen offerings of liberal arts and humanities courses.
Still, he said, there is “insidious and unfair” pressure in Canada for students to go a university instead of a trade school. “There may be students in university who would be better served by college, just as the reverse is no doubt true,” Rock said.
MacRae agrees. College “is a really good option for some people,” she said. “You can save money and get a job quicker.” Finding a teaching job with her early childhood education degree would be difficult right now, she said, though she’s hopeful opportunities will open in a few years.
The applied nature of her degree and the way it is being taught is also helpful, she said. “It’s a college-style program, more practical.”