Coates in the Post: Economy limiting chances for young adults

Writing in the National Post, MLI Senior Fellow Ken Coates laments the lack of opportunities available to well-educated, bright young people in the 21st century Canadian economy. Coates points to data Statistics Canada recently released showing the declining gap in incomes between those with university degrees and those who have high-school degrees. He argues that entry-level jobs previously available to graduates in factories, government and middle management for large companies have disappeared. “Many young people know that the trajectory highly favoured by their parents does not work well in the present circumstances,” he writes. Coates calls on young people to try new tactics such as earning a degree in a field with fewer graduates, attending a college or being willing to relocate in an effort to find a decent career.

Ken Coates, May 5, 2014

Statistics Canada recently released new data on the narrowing earnings gap between high school graduates and those with a university bachelor’s degree. There’s nothing particularly new about this, but it adds to a mounting body of evidence showing that what Canadians have been led to believe about the cash value of a university education is, for a great many people, simply not true.

Many young people know that the trajectory highly favoured by their parents does not work so well in the present circumstances.  Those graduates with specialized skills in high demand areas (medicine and the like, but increasingly not law) enjoy a substantial wage premium.  Most of these programs, however, require a combination of skills and aptitudes that only a small sub-set of the total university population can claim: advanced mathematical or scientific skills, a prodigious work ethic, and high professional aspirations.

The problem does not rest with these talented and highly motivated people. Where the Canadian system is breaking down, and breaking down fast, is in the opportunities available for the average young adult. These people are, in the main, fine citizens: reasonably smart, capable to decent if not exceptional work, reliable but not extraordinarily committed to work or studies. In the past, the Canadian economy had ample space for them, in the factories, government offices, banks and middle management ranks of the large companies that once dominated Canadian retailing.

For this cohort — a vast middle band between the highly skilled and hard working elite and the ones not capable of or interested in completing advanced academic study — the Canadian economy increasingly has fewer attractive options. Most of these young adults will find jobs. Some, stereotypically, do work at coffee shops or in the restaurant sector.  Others find decent paying jobs — some as much as $50,000 a year — in the retail trade or the service industry. But the prestige level of jobs for university graduates is sinking: in the 1970s, the rental car industry generally hired people without degrees; now, some of the leading firms hire university graduates (one favours business graduates) into trainee positions at the front counter.

Here are the real messages from the debate about the career prospects for young adults, specifically those going to university in search of the ticket for the middle class:

•  Location matters. Right now, being close to Alberta, Saskatchewan and Newfoundland has a major influence on job and career opportunities. If you don’t live there, you might prepare to move there.
• High-end skills matter. There is a sustained demand for people with the right training and education. The problem is that the fields in greatest demand change rapidly these days. Ten years ago, teaching and law looked like winners. In 2014, resource-related fields are warm, but not really hot, but specialized digital proficiency is doing very well.
• Avoid the swarm. Young adults have a tendency to follow the crowd, to a particular school or program. Right now, the swarm has turned from the BA to the BComm. Does anyone really think that there will be a sustained demand for ever more marketing graduates?
• Consider polytechs and colleges.  If you seek economic security, give much greater attention to alternative training programs.
• Personal factors — such as integrity, work ethic, and curiosity — likely count as much as an educational credential. The importance of character in getting, and keeping, a job is serious underestimated.

Canada is in the grip of career paranoia, a situation that will likely get worse before it gets better. There are stable careers out there, but the entrance ticket is more elusive than it has been in decades.

 As more graduates enter a work force that has fewer good jobs waiting for them, it is likely that wages and opportunities will continue to stagnate, if not drop. The job market is not defined, contrary to the assumptions of many young adults, by what they want to do. Rather, it is determined by the decisions of thousands of companies and government agencies and, more generally, by the state of the Canadian economy.

In this time of uncertainty and transition, we must recognize the personal cost of sending so many — too many — young adults down the wrong training, education and career paths. The nation must seek ways to find decent, appropriate jobs for its citizens. This is one of the most important duties of government, business and the society as a whole. StatsCan has given us an important tool to put to that task. Let’s make sure we use it well.

Ken Coates is a senior fellow with the Macdonald-Laurier Institute.