Sustainable Universities

Judging from some of the ruminating going on in the media lately, it would appear that Canadian universities will soon be facing a new assault under the mantra of sustainability.  Some of this is a spillover from the United States where rising tuition fees have exceeded the general inflation rate fostering a view that higher education in the United States is another “bubble” waiting to burst and that once it does universities will be forced to close programs.  Canada is not the United States, but the discussion here can be summarized by Tuesday’s editorial in the Globe and Mail “Reform or Perish” which among other things states:

“Classes of 500 students or more taught by an emerging cohort of indentured PhDs who carry a growing share of teaching ‘burden’ but have little hope of long-term employment.  Professors who get ‘relief’ from teaching obligations to pursue research.  Classes and courses of study that prize particular academic disciplines rather than make the connections among disciplines that are so crucial to learning.  For students, its unacceptable; for taxpayers and families who spend tens of billions of dollars each year, it’s unsustainable.” 

The hard evidence offered in the Globe’s editorial is that we are getting less for more and that the quality of the undergraduate experience has suffered.  In particular, they cite the increase of the ratio of full-time students to full-time faculty, the reduction in faculty teaching loads and that faculty income growth has outpaced the rate of inflation.  In essence, they have offered what can be interpreted as a faculty- centered explanation of fiscal sustainability in post-secondary education.

We of course are familiar with the sustainability debate in health care, where health spending growth rates in excess of growth rates in the resource base are seen as a sign of lack of sustainability.  If post-secondary education is not fiscally sustainable, then one would expect to see a similar type of measure.  Saying the health care system is not sustainable simply because the number of patients per physician has increased, doctors serve fewer ER hours and their income growth outpaced the inflation rate would ignore the fact that health care is a system with multiple expenditure categories and players.  Similarly, one needs a broader picture of sustainability for post-secondary education.

I decided to dig up some statistics on post-secondary education in Canada.  I found university and college revenue and expenditures, for fiscal year ending closest to March 31, annually (Dollars) in Statistics Canada for the period 1989 to 2009 (See below for the Series numbers).  The data include colleges as well as universities but given the growing integration between colleges and universities I am not sure how concerned I should be by the statistical lack of separation.  Along with the total annual expenditures for universities and colleges, there is also provided data for tuition revenues, administration expenditures, education expenditures, support to student expenditures, other post-secondary education expenditures, and debt charges.  I was not able to dig up too much detail on the composition of these categories but perhaps WCI readers will have some insights.  I decided to calculate the annual growth rates for these categories for the period 1990 to 2009.  As well, annual growth rates for total provincial-territorial (PT) government sector revenue and GDP were also calculated to provide a comparison.  All growth rates are nominal.  The results?

 

Well, like health, the system of post-secondary education spending in Canada is “unsustainable” given that the average annual growth rate for the period 1990 to 2009 for total post-secondary education spending (at 5.7 percent) exceeds the growth rate for GDP (4.3 percent), provincial-territorial government revenues (4.7 percent) and total provincial-territorial government expenditures (4.3 percent).  Actually, post-secondary education spending is growing almost as fast as public health spending.  As well, the average annual growth rate of tuition revenues exceed the post-secondary education spending growth rates which lends support to the argument that students are paying more but not getting full value.  However, it should be noted that sustainability requires revenue growth to exceed or match expenditure growth and one can also argue that rising tuition fees have been an effort to make the system “more sustainable”.  However, when you break it down by the categories provided, it would appear that some categories of post-secondary education spending are more unsustainable than others.

The “Education Expenditure” category while growing faster than total provincial-territorial government revenues and expenditures is the slowest growing of the university-college expenditure categories.  Indeed, between 1990 and 2009, this category has fallen from 57 percent of post-secondary spending to 49 percent.  The all other category (which contains the two categories of support to students and other post-secondary education expenditures) has exhibited the highest growth rate and reflects the shift towards spending more on student support services.  As well, administration expenditures and debt charges have also grown faster than “Education”. 

This should not be a surprise.  Hiring more sessionals and packing more students into a class has allowed universities and colleges to restrain expenditure growth in the “Education” category.  Some of the resources freed from these practices may indeed have gone into faculty incomes, but they have also gone into administration and student support services and the incomes of the people employed in those categories.  As well, there is the growth of debt servicing costs.  The debt servicing is especially galling given that universities since 2000 have accumulated substantial amounts of debt in order to increase capacity to do what the Globe advocates in its editorial – “ bring the values and practices of liberal arts and science education to the masses – and create the kind of citizens and future workers essential to a free and democratic society.”  Hopefully, most of this university debt is locked in for a long time at current low interest rates because otherwise, there will be another budgetary squeeze when interest rates rise. 

 

The fact is that improving the quality of the undergraduate post-secondary experience is going to be a complex undertaking that will require more and not fewer resources especially given the push to expand university education even further among “the masses”.  The Globe’s lament that dumping information from a professor’s head onto a student’s notebook isn’t education may be correct but it can be extremely cost-effective especially if there are 1,000 students in the class.  The Globe’s analysis of the problems of the post-secondary reduces it simply to faculty doing too much research and not enough teaching.  It ignores the other players in the system – governments, university administrators and special interest groups – who have also influenced the situation and promoted their own agendas.  In its editorial, the Globe states: “If you can’t explain it, you shouldn’t be allowed to teach it.”  To that, I would add, if you do not fully understand the dynamics of a situation, you probably should not be so sweeping in your policy recommendations. 

 

University and college revenue and expenditures, for fiscal year ending closest to March 31, annually (Dollars).

v156385 Canada; Total revenue

v156388 Canada; Tuition fees

v156398 Canada; Total, postsecondary education expenditures                                  

v156399 Canada; Administration, postsecondary education expenditures

v156400 Canada; Education, postsecondary expenditures                                          

v156401 Canada; Support to students expenditures                                    

v156402 Canada; Other postsecondary education expenditures            

v156403 Canada; Debt charges                                                            

Comments

[Jim Rootham]

I think you have a cut and paste problem on the table you tried to end the post with. There is no data.

[Livio Di Matteo]

Hi Jim:
I did not provide the data. Those are simply the series numbers from Cansim. Livio.

[Andrew F]

If enrollment is increasing, is total expenditure the appropriate thing to be looking at, rather than per-student expenditure?

To me, I think we should just let the market sort things out. Liberalize tuition rates but give much more comprehensive student loans.

It also seems a shame that younger PhDs are having a hard time getting full-time tenure-track positions. Aren't academics most productive in their early years? If anything, it is the older professors who would be better used teaching, given their experience and the likelihood that they are no longer on the cutting edge of their field.

[Jim Sentance]

I'd echo the thought that this should be adjusted to recognize increases in student numbers, and as far as sustainability for the future goes, noting that a slowdown in numbers is looming.

One issue I have with most articles like the editorial this is reacting to assuming that some of these changes, like lower teaching loads and an increase in research focus, are the fault of faculty. While some of that has been funneled through collective bargaining, I think the real force behind those changes over the past decade or so have been adjustments to the federal government's move to starve transfers for operating expenses and funnel money more directly through research funding. Universities have chased the money, pushing faculty to do the chasing, and to the extent that faculty have insisted on reduced teaching loads I think its largely to protect ourselves from being asked to do too much. If we become the research cash cows for the university, we can't be teaching drones at the same time.

[Determinant]

It also seems a shame that younger PhDs are having a hard time getting full-time tenure-track positions. Aren't academics most productive in their early years? If anything, it is the older professors who would be better used teaching, given their experience and the likelihood that they are no longer on the cutting edge of their field.

The experience of young PhD's is no different from the experience of young university graduates of any stripe: a bleak job market with too little demand for their education.

The cause is no different either. Too little expenditure and investment by government/universities/private enterprise and too much of what expansion does occur is captured by existing incumbents.

[CBBB]

There's another issue at play with respect to university degrees. Rising tuition would be okay if a degree came with better and better job prospects/pay but that's simply not the case. Maybe only the top 10-20% of any graduating class can get jobs in their field (and this includes the supposedly in-demand technical degree programs), most of the rest of university graduates have about the same job prospects as a high school drop out.

[Jim Sentance]

"There's another issue at play with respect to university degrees. Rising tuition would be okay if a degree came with better and better job prospects/pay but that's simply not the case. Maybe only the top 10-20% of any graduating class can get jobs in their field (and this includes the supposedly in-demand technical degree programs), most of the rest of university graduates have about the same job prospects as a high school drop out."

Any evidence to back that assertion up?

[Determinant]

Evidence?

Hi Jim. Name's Determinant.

Or you can check underemployment (out of field, precarious, grad working flipping burgers etc.) or unemployment stats for university grads.

The situation with young PhD's is a microcosm of what is wrong with the labour market in general. We have young, educated people desiring experience but unable to secure stable employment. They are stuck in this middle state where their education is not providing an adequate return and they are underutilized relative to their education. They see opportunities and compensation instead being given to incumbent, tenured faculty.

It is a deterioration in the terms of trade for young PhD's.

It is also why I say the economy is not limited by education, regardless of what popularly believed. If PhD's could not be had for love or money then we would be limited by education, for example.

If you can explain why this is happening you will be able to explain a great deal of what is wrong with the labour market in Canada because the situation is very, very common.

[Jim Sentance]

Hi Determinant,

I've read your posts before and I understand and agree that the labour market is still bad and in particular for young people (I was going to ask Stephen if he'd thought about the 'level' of unemployment as well as the rate of hiring in his recent post).

But stating that "most of the rest of university graduates have about the same job prospects as a high school drop out." seems more than a bit unsubstantiated to me.

[Determinant]

Alright. But I'm trying to boil this down into something that can be examined. Examining the deteriorating terms of trade for young PhD's seems a great place to start.

[rocketsurgeon]

Yes, post-secondary is unsustainable if the 21st century economy doesn't really need post-secondary education after all. However, the uneducated haven't exactly fared well over last few years. My own take is that this question is posed all wrong.

The real sustainability crisis is found in the burden we are placing on youth. There will be a cascading effect when they can't sustain current housing prices, consume at the levels expected of them, make babies at the replacement rate, and produce the unadjusted 8.5% market return expectations of the pensions without the benefit of cheap oil. Student debt loads is just one piece.

[CBBB]

Here's a chart for you
http://www.economist.com/node/16984636
So I was a little hyperbolic but still, a big chunk of university graduates end up in low skilled job not in the professional careers that a degree supposedly leads to. And wo-be-you if you graduated with an average below 80% and can't make it into a decent graduate program - you might as well have dropped out of university altogether.

[Jim Sentance]

"Here's a chart for you
http://www.economist.com/node/16984636"

That doesn't look good, true. I'd be careful with OECD comparisons though. One point I'd make on this one is that it combines college and university, and Canada as I understand it has relatively higher college numbers (which might even include Quebec CEGEP depending on the source). Actually the numbers here are reminiscent to me of the numbers being put about again based on the OECD a week or so ago that noted almost 20% of Canadian university graduates earned less than half of median income, well above the OECD norm. If you look at the other numbers though, it's clear that that is still much better than if you just have college or high school. And also clear that the issue may be partly that Canada just has a less equal distribution of income as being a university grad gives you a relatively high chance of earning double the median income as well.

Overall I'm more depressed about rocketsurgeon's prospectus.

[Determinant]

"Yes, post-secondary is unsustainable if the 21st century economy doesn't really need post-secondary education after all. However, the uneducated haven't exactly fared well over last few years. My own take is that this question is posed all wrong.

The real sustainability crisis is found in the burden we are placing on youth. There will be a cascading effect when they can't sustain current housing prices, consume at the levels expected of them, make babies at the replacement rate, and produce the unadjusted 8.5% market return expectations of the pensions without the benefit of cheap oil. Student debt loads is just one piece."

You can't do any of those things without a decent job. You have loads of youth hurling themselves at the private and public sector and being rebuffed. Their resumes are not wanted, not considered and then filed away or trashed. I haven't done any of those things, I don't have a house, I don't have money for a house, I'm not married, I don't have kids and I won't for a few years at least.

You have a generation that was told education was the key and who dutifully obeyed that advice. And the advice it appears was wrong.

So if jobs are not being created for this educated generation who are attempting to get a job, the next step is to examine the other side, the lack of hiring action by firms. What is causing firms to behave this way?

Another facet of the same problem was put forth by Rob Carrick a month ago in the Globe & Mail: why aren't people angrier about the lack of wage increases in the past decade? It was part of a list of things he couldn't explain in his experience as a columnist.

This lack of hiring and job creation is why worries over replacing the Baby Boom generation are entirely misplaced. When we have a youth unemployment problem, that isn't an issue. What is an issue is that the Baby Boom retirement will not be as fast as people think or want it to be because our employer-based retirement pillar in Canada is a fiasco.

If the Baby Boom has a poor retirement because the next generation was not placed and enabled to fund that retirement then they will have only themselves to blame.

[Shangwen]

There are two popular responses to the question of sustainability in public programs.

1. It's growing faster than GDP for a long period, and will continue to. Therefore, it must be reined in.
2. A program is sustainable if people (government) are willing to pay for it. So pay for it.

Both of these arguments ("reactions" would be a better word) are wrong. If someone invented a pill that substantially enhanced the mathematical skills of the bottom half of students, and the cost of it grew by 7% a year for 30 years, I'd say: pay for it! Because it would yield huge benefits. But both reactions are wrong because you have to evaluate the cost-effectiveness of the program, and since the cost-effectiveness of health spending is, in aggregate, negative, no public servant or policy maker wants to go near it. So it is sustainable by default.

Same with education. In aggregate, and considering relatively low Canadian university costs (=tuition + subsidies), only a fool would argue that universities don't provide students with income- and employment-enhancing credentials that are disproportionately better than the alternatives. But that has as much to do with the weakness or absence of alternatives, as it does with the value of universities. I think many people with BAs in the humanities would have been better off becoming electricians (especially industrial HVAC specialists), but there you get into questions of signaling, prestige, and so on. The Globe article, which is a crock, has the same problem. The editors want universities to make people highly employable. To advance the sciences. To revive the enlightenment. To strengthen democracy. Assuming those mandates have any meaning, what institution can do that? None, but that kind of talk is what makes it socially acceptable for middle class parents to piddle away tens of thousands of dollars for their grown children to read poetry for four years. Those parents are making universities sustainable by paying them, and they are also making them unsustainable by paying them.

Many years hence I will be sending my own kids to university. This will not be to strengthen democracy, but to enforce dictatorship: no parental funding unless they study something broadly useful (i.e. STEM, business, etc.).

As a further indicator of just how bad that Globe article is, they refer to "the reformist wave that is transforming health care in Canada". I would really like to know what that is.

[Bob Smith]

"There's another issue at play with respect to university degrees. Rising tuition would be okay if a degree came with better and better job prospects/pay but that's simply not the case. Maybe only the top 10-20% of any graduating class can get jobs in their field (and this includes the supposedly in-demand technical degree programs), most of the rest of university graduates have about the same job prospects as a high school drop out."

I guess there are two issues here. First, what does it mean to "get a job in your field"? I'm a lawyer, my undergraduate degree was in economics, does that mean I'm one of the unlucky 80% who didn't get a job in their field? People I went to law school with now manage private equity funds. An old friend of mine works for the federal government as an economist, she has a degree in sociology (go figure). My wife has a degree in chemical engineering, she works in a different field of engineering. I could go on. Few university graduates end up working in their "field" (is there a "field" for woman's studies?), but that doesn't mean they don't end up in jobs that make use of skills they developed or honed in university.

With respect to the second point, if it is true that there are a large number of university graduates who are ending up in jobs that could be done by high school drop-outs (which is suspect), then maybe we should be asking why we're encouraging so many people to go to university and subsidizing their education.

And, in fairness, I suspect there is probably a subset of university graduates who end up doing jobs that, 40 years ago, would have been done by high school graduates. In part, that may be because, many of those students, 40 years ago, would only have been high school graduates and would not have been admitted to (or graduated from) university (I remember the exquisite pain of reading economic history essays written by third year students who had clearly never been asked to write anything substantive before, or if they had, hadn't been assessed on it). To the extent that we believe that a university educations serves as a signal of student productivity (innate work effort, innate intelligence, etc.) rather than as an exercise in improving student productivity (making students better workers), it's not entirely surprising that pumping out more university students doesn't change the ultimate distribution of jobs (it just makes it harder for employers to distinguish the good from the bad - hence the rise of unpaid internships and graduate and professional school enrolment). And to that extent, greater post-secondary education spending is socially wasteful, even if it is sustainable.

[Andrew F]

Determinant:

"If the Baby Boom has a poor retirement because the next generation was not placed and enabled to fund that retirement then they will have only themselves to blame."

They are going to pick every government clean, max out debt loads, etc.

[richard]

Perhaps cost constraints will force universities (and their funders) to re-examine how education is delivered. Does every university need to have someone delivering BIOL 101? Or can the one excellent intro biology lecturer use internet technology to deliver the content interactively to many campuses? Perhaps university admins should be looking at outfits like the nonprofit Western Governors University (http://www.wgu.edu/) for some ideas on how to deliver at least entry-level courses.

Know I now that economics is unique, and economic teaching staff could not be replaced in this way :), but still.....

There are a lot of assumptions made about the costs of education, that are just that - assumptions. There is no reason why interent technologies can not drive down the cost of education; the main barrier seems to be the assumptions (and perhaps self-interest) of staff and admins.

If it was up to me, there would be a lot more integration between community colleges and universities; many head for the uni because they don't know what to do or because their parents expect it. The switch to a community college (or failure to get a job in your 'field') is often seen as a failure, when it shouldn't be.

[CBBB]

@Bob Smith

What I mean is the university graduate who is forced to take a job that does not require a degree of any kind, ie working at Walmart, McDonalds, Starbucks, etc. in a low-skilled capacity in a job with minimal prospects for meaningful advancement. This is the reality today.

[Joel Wood]

I wonder if the increase in institution debt is just an Ontario phenomenon. Universities were given huge capital grants to increase capacity for the double cohort, but had to provide matching funds. Anecdotally I know this to be true at the University of Guelph. Interestingly enough when I was on the Board of Governors a few years later, the University was facing a significant structural deficit that, as I liked to point out, was approximately equal to the annual interest payments on the University's new debt. I was the only person on the Board who found this even moderately amusing.

@Determinant & @Andrew RE: PhD job market. Seems to me that student expectations are out of line with gov't expectations (the main funder of phd spaces). The gov is not funding phd spaces with a goal of them all becoming TT professors. My cynical view is that someone in Gov (or a highly paid consultant with a US state as a last name) runs a regression and finds the number of phds in the workforce correlated with income or economic growth, so they decide to increase the # of phds in the workforce by increasing the supply more than increasing the demand (TT professor spots). That being said, as a relatively new phd who was on the job market in the last year or so, California's budget difficulties probably have played a large role in the academic job market through demand reduction due to budget problems at many state universities.

[Bob Smith]

CBBB: "Here's a chart for you
http://www.economist.com/node/16984636
So I was a little hyperbolic but still, a big chunk of university graduates end up in low skilled job not in the professional careers that a degree supposedly leads to. And wo-be-you if you graduated with an average below 80% and can't make it into a decent graduate program - you might as well have dropped out of university altogether."

What I'm strike by about that chart is not the proportion of university and college graduates who end up working in "low skill" jobs, but how high the average earnings of those graduates are. The average Canadian income is signficantly less than 45,000 a year (although that number is probably not directly comparable with statscan numbers), and given that incomes generally rise with age, the fact that recent graduates earn such a high income, on average, at the begginning of their careers is telling. They may be taking "low-skill" jobs (whatever those are), but they're certainly not taking low wage jobs. You don't make 45K a year working for Walmart, McDonalds or Starbucks.

Also, you should take that chart with a grain of salt, Canada may have more university and college graduates in "low-skill" jobs, but Canada also has a much larger tertiary education sector than do most other OECD countries, with 56% of the 25-34 cohort having some form of tertiary education. Given that, it's not terribly surprising that have a larger portion of post-secondary graduates who do "low-skill" jobs - that's entirely consistent with my theory that's we're over-educating out population, and accepting people into universities and colleges who, in other countries, would just start working. I note, though, at least according to the OECD, that the level of "low-skill" jobs among university and college graduates doesn't appear to have changed much over the past decade.

[CBBB]

But the reason why there's over-education is that society offers NO alternative. It used to be with just high school or perhaps less, one was able to find a solid job with decent pay and stability. These days, if you don't attend post-secondary education you have NO chance at a decent life. If society makes a post-secondary degree the only game in town it's not a surprise that everyone wants to play.
And really $45,000? Sure I guess that's higher then the average Canadian salary but that just shows that the average Canadian salary is ridiculously low. This has to do with Canada's sluggish productivity which might be in turn tied into the issue of where university graduates find work.

[Shangwen]

@Bob Smith: agreed.

Many college grads in low-skill jobs are the proud owners of low-value degrees. Relative to what they would have if they only had high school, they are actually doing very well. I know or have known many such people. Interestingly, most of them still think it is quite OK for them to send their kids to university to get a BA in philosophy. The rents the parents are earning from just owning a university degree are actually encouraging them to devalue their kids' time. And employers who think they are somehow better off hiring someone with a BA, just because, aren't helping either.

[Bob Smith]

"Sure I guess that's higher then the average Canadian salary but that just shows that the average Canadian salary is ridiculously low"

Well, maybe, but ridiculously low relative to what? Canada is one of the richest countries in the world. Perhaps a lot of Canadian graduates have unrealistic expectations as to what constitutes a "good" income.

"These days, if you don't attend post-secondary education you have NO chance at a decent life",

That's an overstatement, but it is true that post-secondary education has taken on the signalling role that used to be provided by a high school diploma (i.e., here's a person who's literate, numerate, and can be counted on to show up every day and get his tasks done on a timely basis, and who would probably make a good employee). If our secondary schools still imparted those skills to their students (rather than promoting their self-esteem), and there is no reason to believe that they can't, a post-secondary education wouldn't be seen as neccesity.

[CBBB]

Low relative to the cost of living in Canada. You could take just about any job and compare it to an equivalent one in the US and the pay in Canada would be lower by, probably a good $10-15K in many cases.
High Schools do continue to teach those skills, the reality is you DON'T get a decent job these day by showing up on time, being literate, numerate, etc.
I've never been to a interview that didn't involve 5-6 (sometimes more) rounds. Does it really take THAT many rounds to determine if a person has basic social/operational skills?

[CBBB]

By the way this is ANOTHER reason why you basically need a degree these days: if you want to have a crack at any decent paying jobs or even entry level positions (they don't exist in Canada) you have to leave the country. Try getting a visa without a degree - good luck.

[Michael D]

The Economist's numbers are stated as "average gross earnings of graduates aged 25-34, $'000", and thus don't appear to be specific to those working in "low-skill" jobs. Indeed, I'm sure the numbers are heavily skewed by a small selection of b-school grads who've managed to make six figures well before 30. Blame the Economist for making a bad graph - the "low-skill" age range of 25-29 doesn't even match with the 25-34 range of the salary numbers, likely skewing the salaries higher due to age. And I'm not sure that either measure is very comparable to the OECD's median data.

Keeping in mind that gross income of $45k represents a full-time hourly rate of over $20, or more than double minimum wage and well above wage ceilings for many retail positions (even supervisory positions), I find it somewhat unlikely that these numbers are a true reflection of what the 25-29 age group in low-skill occupations is earning.

[Sad in BC]

"If our secondary schools still imparted those skills to their students (rather than promoting their self-esteem), and there is no reason to believe that they can't, a post-secondary education wouldn't be seen as neccesity."

ABSOLUTELY! And I would go further and add that the declining population of 18-24 year olds, the traditional university student, makes the emphasis on bachelor degree programs even less necessary.

I teach in an institution in BC that started life as a community college but now is one of four of a new breed of university, the "special-purpose teaching universities." The transformation was widely acknowledged to be for the purposes of marketing, especially to attract the international ($$$) students.

The changes in the faculty, the programming and the approach to serving the commnunities is profound, at least in this institution. This institution used to offer a far wider range of diplomas and certificates, meaningful credentials that individuals could use to make meaningful advancements in their jobs or to get better jobs. Certificates and credentials like these are still what people in this region desire, according to research done by this very institution. But, the focus in on bachelor's degrees, and the admin are openly blunt in saying that we "need" to do more research (without release time) because we must enhance the prestige of the insitution.

Post-secondary education in BC is also, by the way, in a position of being under pressure to come in with surplus budgets, which if the admin play along, will have the effect of an unacknowledged cut to post-sec funding in BC.

In the meantime, whatever happened to the notion of education as being emancipatory? Of education as being liberatory? Of education as being an essential enabler of good citizenship and full participation?

[CBBB]

Emancipatory? The heavy bonds of Student Loan Debt is hardly Emancipatory.

[Determinant]

"Low relative to the cost of living in Canada. You could take just about any job and compare it to an equivalent one in the US and the pay in Canada would be lower by, probably a good $10-15K in many cases.
High Schools do continue to teach those skills, the reality is you DON'T get a decent job these day by showing up on time, being literate, numerate, etc.
I've never been to a interview that didn't involve 5-6 (sometimes more) rounds. Does it really take THAT many rounds to determine if a person has basic social/operational skills? "

Indeed. People seem to think that the bottom rung of the ladder is wide open when in fact it has disappeared. I would like to know what drives business to be so picky.

Further, Productivity is not a labour issue, it is a management issue. We have good people, we just don't invest enough to put them in the right spots corporately and given them enough invested capital to do their jobs most productively. That is a management issue because management controls capital spending and hiring. We are not investing money. Are we diverting it into profits or where else is it being spent?

[CBBB]

Determinant,

I don't want to go into details here but I like to compare my experience interviewing in Canada vs. Interviewing in the US it's as different as black and white and the management at the Canadian companies (including major companies) comes off looking like amateur hour by comparison every time. I don't think people appreciate how much of a farm league the Canadian management pool is and how much that hurts this country.

[Determinant]

No argument. For example I interviewed for the position of "Junior Electrical Engineer-in-Training" at a consulting firm. I didn't get the job. I asked why just so I could know. "You have no experience." Read the job title again.

My head hit my desk.

Hehehe.

This board has been tagged. OCCUPY WORTHWHILE CANADIAN INITIATIVE!!!

[Patrick]

Given the decreasing returns to undergrad degrees, and the fact that it's basically a requirement to get a job, I have my doubt about university for the masses being sustainable. We already have a model that works pretty well for delivering education to the masses: high school. Maybe it's time to consider extending high by a few years and offering either an academic stream which could ultimate lead to university (perhaps entering at what as upper level undergrad?), or a trades stream.

[Bob Smith]

"High Schools do continue to teach those skills"

Really? That wouldn't be consistent with my experiences (and those of others) of semi-literate university students who are neither particularly literate or numerate and who think that "deadline" means "I can hand it in whenever I want". And keep in mind, these are the people who were the "A" students in high school, I shudder to think about what happens to those at the bottom of the academic food chain.

[Bob Smith]

Michael D,

Nice strawman, but I never suggested that the $45k figure was typical of unskilled university graduates, I thought my post was clear that the 45k figure was the average of all university graduates within that age group (which is certainly not implausible), certainly, that's what the chart in the Economist suggests, which is certainly more than the Canadian average. Sure, that may be skewed by recent graduates who make big money (although, I think you over-estitimate the number of recent graduates making 6-figures), but the same is true of the average income of the Canadian population as a whole (more so, since the Canadian average is likely to have a larger percentage of high-income earners than the 25-34 year-old cohort, since a worker's peak income earning years are usually in their late 40s/early 50s, which group is, of neccesity not-included in the 25-34 year-old cohort).

In any event, a university degrees isn't, and never has been, a guarantee of eternal wealth (although too many of our politicians and educators have made the mistake of suggesting, and believing, that it is). It is, amongst other things (because Sad in BC's point is a good one it is, or should be, thought of as more than a merely economic investment) and investment which increases the likelihood of a good economic return on your human capital. But, like any other investment, it doesn't always pay off.

[Bob Smith]

For what it's worth, statistics Canada has done some recent (2006) research on how university graduates do relative to both the median income in Canada, and to Canadians without university degrees. (http://www.statcan.gc.ca/pub/81-004-x/2009002/article/10897-eng.htm)

Two points become clear. First, university graduates are about half as likely to earn incomes below the median income ($33,800 for those of you who think that $45,000 is a piddling income) as high-school drop-outs, and they are significantly less likely to earn incomes below the median as high-school or college graduates. In fact, only a third of university graduates had incomes below the median income. So, the first point is that getting a university degree has a real pay off.

Now, before anyone points out than having 1/3 of university graduates earning less than the median income isn't a great performance (and 1/6 earning less than half the median), keep in mind that this includes a number of people for whom work was not their primary activity in the year (43% of those earning less than half the median), atlhought they had some employment (this might include, for example, a university graduate pursuing further education, and working part time, a mother on maternity leave for 8 months, etc.). Among full-time workers, the proportion of university graduates earninng less than half the median income falls to 11%, and once you subtract those whose are self-employed (as statscan notes, the reported incomes of the self-employed are notoriously unreliable), its 5%.

Second of all, the payoff at the top end of the income spectrum is also clear. Whereas less than 6% of high-school drop-outs and 12% of high school graduates earn more than twice the median income, over 31% of university gradautes reported incomes that were more than twice the median.

[Bob Smith]

"I've never been to a interview that didn't involve 5-6 (sometimes more) rounds. Does it really take THAT many rounds to determine if a person has basic social/operational skills?"

In a word: yes. Hey, I used to see it your way. When I was a law student applying for jobs with law firms, I thought it was a ridiculous process. (And in some ways it is. In Ontario, at least, if you want to work for the big firms, you go through a process of written applications, short 20-minute interviews over two days with all the firms, and longer interviews over three days with all the firms, all spread out over a couple of months. Seeing it for the first-time, it's a surreal experience.)

And then I sat on the other side of the table. And it becomes a lot easier to see the employer's dilemna. Sure, you might say, this guy looks good on paper, but is he a jerk? Is he a hard worker, or did he get good grades by coasting on his brains? Can I put him in front of a client without embarassing the firm? Will I want to strangle him if I'm forced to work with him for 3 days straight? Is he interested in the sort of stuff we do, or is he just saying that he's interested in the sort of stuff we do so we'll hire him. If we train him, will he stay with us, or will he jump ship at the first chance of a better offer. These are the sort of things that employers want to know and they the sort of things that are, inherently, hard to figure out (since, hey, no one ever admits to being a jerk). A one-off process might mean missing people who, perhaps, had one bad day. And it might mean hiring someone who talks a good game, but can't survive more detailed scrutiny.

Think about it this way, hiring is an expensive process for employers. It's not just 5-6 interviews for you, its 50-60 (or more) interviews for them. Around my shop, the lawyers hate interview week because it means they have to give up a couple of days of billable time to do interviews (think about what lawyers bill, that adds up pretty quickly). They're not incurring those costs for the sake of being perverse, they're doing it because they think it's neccesary to make good hiring decisions. Seen from outside the process, it seems crazy (and, if unsuccessful, frustrating). Seem from within the process, there is a rationale to it.

[Determinant]

In the past the rate of growth and imperative of getting employees to exploit that business made employers shorten the process considerably. Jacques from this site and many others who tried to get jobs in the 1970's or earlier describe a far quicker process. But today the slow growth rate of the economy means that when businesses resort to this sort of process you get months unemployment measured in double digits. Try doing it with multiple firms and see how your time adds up.

It may be your expense but it's also the prospective employees expense in the form of missed earnings and waiting in unemployment.

Business needs to learn that there is a limit to employees ability to wait. If you are going to drag the process out that much why should anyone participate in it? Employment is a reciprocal relationship but your description Bob is anything but reciprocal.

[Bob Smith]

"Business needs to learn that there is a limit to employees ability to wait. If you are going to drag the process out that much why should anyone participate in it? Employment is a reciprocal relationship but your description Bob is anything but reciprocal"
Actually, the process is reciprocal. Take the process I described for law students, not only do the law firms get a better sense of their potential employees, but the law students get a better sense of their potential employers by coming back for multiple meetings and meeting more lawyers. Nobody wants to be stuck doing a job they hate with people they don't like if they can at all avoid it.

Again, you seem to be under the impression that employers are jerking people around for the fun of it. They aren't, it just takes the time it takes. Consider my experience when I changed law firms a few years ago. I met with my future employers/colleagues on three different occasions over the course of 5 weeks, while they tried to get a feel for me, and I tried to get a feel for them. It wasn't because they were stringing me along (in fact, one of them had originally come to me to ask if I was interested in making a move and I was one of the few, if not the only, qualified candidate for the job), it was (a) in part because they were doing their due diligence, and (b) in part because they're busy with their actual work.

[Determinant]

Bob, you fail to consider the lost earning potential of the jobseeker. If you are young and don't have many assets, it gets painful.

It's about expectations. You're describing a process that does not value time highly enough.