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Divisions between haves and have-nots begin with having skills – or not

Financial inequality – the tension between the haves and have-nots – was the underlying issue of the Occupy Movement demonstrations that began last year on Wall Street, and it was a factor when Quebec students took to the streets to protest against tuition hikes.

Baby boomers are targeted because after struggling to get an education in skills that would land a job, and after decades of effort, they have accumulated some wealth. That the living standards my wife and I experienced in our school years were much more modest than those of today's young protesters matters little. To them, we symbolize intergenerational inequality.

But I have news for today's students: Your future will be defined by how well you learn skills that match the needs of the job market. Those who gain useful skills will find higher paying, more rewarding jobs; those without that knowledge will face low-paying, unstable prospects.

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This skills gap will define the haves and have-nots of your future, creating a progressively widening inequality gap between members of your own generation.

Canada's skills gap has been brought into focus by the large numbers of unfilled jobs co-existing with high levels of youth unemployment. A recent report commissioned by the Canadian Council of Chief Executives said Canada is falling behind in the global skills race.

The answer, according to many university presidents, is more money to produce more graduates. But what if Canadian universities were the root cause of the skills gap, rather than the solution? There's considerable evidence to support this conclusion.

Universities like to trot out statistics showing that their graduates have higher rates of employment than people without postsecondary education, but they fail to report what portion of their graduates find work that requires a university education. A 2010 report from the Organization for Economic Co-operation and Development noted that 40 per cent of Canadian university graduates aged 25 to 29 were employed in "low-skill" jobs, the second-worst rating out of the 11 countries surveyed. That BA in history or philosophy isn't of much use in a fast-food outlet.

The fact that their university degrees aren't translating into jobs has sparked an increase in Canadian graduates turning to jobs-focused colleges for further training. This means taxpayers are contributing to their education not once, but twice. For students, it likely means adding to the debt incurred in university. Those debts, combined with lost earning years, mean that many will be in their fourth decade before they begin building tangible net worth.

And for companies unable to find people to do skilled work, it means stymied growth that reduces Canadian productivity and prosperity. Such is the sad toll when publicly financed universities put "academic freedom" to teach whatever they choose ahead of the interests of their students, and the national economy.

Imagine a company that sees some of its products in high demand while others languish on warehouse shelves. Imagine that its employees have veto power over the allocation of production resources, forcing the company to turn out more surplus products while failing to satisfy growing demand for other items. That business would soon be bankrupt.

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But universities don't go bankrupt; they just keep spending public money to produce graduates with few job prospects, and keep seeking more money to expand enrolment in skills-short fields. Growing government deficits are ending that gambit, however. Unless universities change their spending priorities, they will continue to turn away applicants for high-demand programs such as engineering, medicine and information technology. And graduates will continue to be doomed to low-paid, unfulfilling jobs, or no job at all.

When next year's crop of university students graduate, those who have attained in-demand skills can look forward to interesting, rewarding careers. But many grads will not have the skills and training needed to land a satisfying position. And the class of 2013 may come to realize that the most damaging inequality is not that of financial disparity, but rather the inequality of hope.

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About the Author
Gwyn Morgan

Gwyn Morgan rose from his modest roots on an Alberta farm to become one of Canada’s foremost business leaders and ardent champion of the importance of Canadian-headquartered international enterprises. Gwyn has served on the board of directors of five global corporations. More

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