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History Table of Contents
1993 Summer Conference
Summer Conference 1993
The Challenge of Lifelong Learning in an Era of Global Change

The Economic Challenge

Deputy Minister, the Premier's Councils on Economic Renewal and on Health, Well-being and Social Justice

I want to focus on the skills of the workforce. By the workforce, I mean those people within the labour force who also hold a job.

First, I want to look at three factors that determine the skill composition of the workforce in a steady situation. Then, I'll look at some data, some of which may surprise you and, finally, do something only the fearless do – try to make a prediction or two based on the data.

It's widely recognized that our economic well-being depends on the skills and knowledge of our people more than ever before and that we expect to become more dependent on that skill and that knowledge in the future. I think this premise applies to every sector; to hard rock mining, to forest products, to business services to high tech manufacturing, to environmental services – it includes everything.

Consequently, the education and training of the workforce, their skills level, is of great importance.

What determines the skills, the knowledge of the workforce? I'm going to make the assumption that we're not all that different from anybody else. And that, in fact, what we should focus on are the choices Canadians make in the educational programs they pursue and the work they seek.

Second, I want to discuss the performance of the Canadian education and training system. It's the subject again of constructive attention, but also some finger pointing and teacher bashing and school board bashing and a whole host of things. Business councils make pronouncements, Royal commissions are set. There's a great deal going on.

Finally, I want to look at the way business and industry hire, train and remunerate people, because that does have an impact.

Let me give you an illustration.

I recently visited Kitchener-Waterloo and got into a conversation with a high school teacher about dropout rates and she winced when I used the phrase dropout rate. Now I wouldn't use it. We talked about retention rates in schools; the fact that province-wide and nation-wide the retention rate might be 70 per cent, or 75 or 80.

"You can't talk like that," she said. "In the K-W area, the retention rate is closer to 90 or 92 per cent."

She explained that students in the Kitchener-Waterloo area have seen the furniture industry go down the drain, the shoe industry go down the tubes, the tire industry decrease by some 50 per cent.

They've seen the growth of environmental services as a major cluster; they've seen the growth of high tech manufacturing; the growth of a whole cluster of software and high tech instrument and sensor companies around the University of Waterloo. They've seen Toyota make a training arrangement with Conestoga College.

They've seen all of that and they're also aware that there's no prospect of getting a job with Grade 12 or less; of buying that car, paying it off in five or six years before it wears out, replacing it with something and buying a house eventually. That's not an option, so they stay in school.

At the university level people talk about remuneration practices. They talk about the fact that engineers who make a product are often paid half or a third as much as the accountants who count up how many were made. And they recognize that in some companies the technical career stream hits the ceiling before the management career stream. These are things students see and react to.

So, the three factors that constitute the skill composition of the workforce are:

  • The choices of individuals in picking their own job prospects and their own programs of study.
  • The performance of that system of education and training.
  • And what happens to the people when they get into the workforce.

The Ontario Premier's Council on Economic Renewal recently completed a study on the outcome of these three factors, titled, A Comparison of Workforce Skills and Wages Between Ontario, Canada, and Selected States in the U.S. The study looks at data from all the provinces, aggregated into regions, and selected states in the United States.

We have data on educational attainment, occupational mix, wages and one or two other things. This is data already being gathered by the governments of Canada and the United States.

The data on educational attainment, while a very coarse measure of the skills of the workforce, indicates those who have some post- secondary education. This could be a year in a community college, a Ph.D. in engineering or a completed certificated internal training program.

At least it separates those who have no post-secondary education from those who have some.

What the data show is that the share of those in the workforce who have some post- secondary education is rising consistently with time. We're up to something like 52 per cent of the Canadian workforce – those who are employed as of 1991 – who have some post-secondary education.

Taken by itself that doesn't mean an awful lot. But when the numbers are compared with comparable jurisdictions, we compare favourably.

If you believe, then, that the skills of the workforce are crucial to the future of the economy, that's not bad. It's a measure of success.

If we examine the data in a little more detail over the 11 years from 1980 to 1991, what it shows is that those jurisdictions with the high levels of educated workers have also had the higher growth rate.

The study shows that the educational attainment of the workforce correlates well with the structure of the industry.

For instance, Michigan ranks highest in the auto and auto parts sector because it is the centre for research and development and corporate management. California and Ontario are at about the same level, probably because of the design capacity in California and the R & D in auto parts in Ontario – in addition to the assembly plants, which exist in both places.

If we compare the educational attainment in the business services industry in these jurisdictions, Canada seems to have some highly-skilled people. We're right up there with anybody else.

If we examine the knowledge-intensive occupations, such as senior management, engineering, natural sciences, social sciences, teaching and medicine, Ontario looks very good and the Canadian provinces are doing well on this measure compared with the U.S. jurisdictions.

One area where Ontario, for one, looks very good in is the knowledge-intensive occupations as a share of the workforce in computer and related services. There's a very clear predominance here of Ontario and the Canadian provinces are really doing quite well on this measure.

When you add another factor, the average wage to educational attainment and knowledge-intensive occupations, you might say, if you believe in the new economy, that a jurisdiction where you have a high level of education attainment, lots of knowledge- intensive occupations and a low average wage is in a very competitive position.

This kind of information makes you daring; it makes you think you can make a prediction.

Supposing we had an area in which there was a sector in which the skills levels were relatively low and there were a lot of other jurisdictions like that, I contend we would feel a lot of cost pressures for competitiveness – plants moving out, that sort of thing.

Supposing that we have a jurisdiction which has a relatively high education attainment in a sector which is represented all around, as in auto, then, I think we could face stability and even some growth there.

If we have jurisdictions where you have a highly-skilled workforce which is earning relatively low wages, then the possibility exists for some real growth in that area.

If you really believe in these notions of the new economy, then there's something to be found in data of the kind I've presented.

Is the skills level of the workforce important? I contend that it is.

Do we have good enough information on our state of affairs? No, not good enough, but we're beginning to get some. And that makes us look relatively confident and relatively good for the future.