Skills, training back on agenda

The need to upgrade skills and training is back on the political agenda. It’s about time because we need higher skills to successfully face the looming challenges of an increasingly competitive global economy and an aging society.

The need to upgrade skills and training is back on the political agenda.

It’s about time because we need higher skills to successfully face the looming challenges of an increasingly competitive global economy and an aging society.

The prospect of growing skills shortages and skills mismatches puts both the future life chances of Canadians and our potential for a more prosperous economy at risk.

The OECD’s first ever international survey of adult skills, covering 24 advanced economies, finds that when it comes to the needed skills for a modern economy, Canada is at the middle of the pack.

We do better than the U.S. but do not rank among the leaders.

In a highly competitive world where investment and jobs will flow to countries that have skilled workers, we can’t afford to be in the middle — we have to be in the top tier.

Education and skills really matter. As the OECD says in its new report — OECD Skills Outlook 2013 — “without the right skills, people are kept at the margins of society, technological progress does not translate into economic growth, and enterprises and countries can’t compete in today’s globally connected and increasingly complex world.”

The life chances of individuals are profoundly affected — individuals with low skill levels are more likely to be unemployed, if they are employed they are more likely to earn low wages.

A lack of skills also contributes to inequality.

Likewise, the growth prospects of companies and countries are affected since a lack of skilled individuals means companies are less able to grow. We all lose because societies then have less prosperity, and hence less tax revenue to finance the public goods and services that we value.

The OECD survey — conducted in Canada by Statistics Canada — looked at literacy, numeracy and problem-solving skills, which it said are essential in the modern economy, as well as for wider engagement in civic life.

There’s also a greater need, the OECD said, to understand how to use digital devices and applications intelligently. This is the one area where Canada was in the top tier.

For all of our boasting about the high proportion of Canadians with a post-secondary education, our labour force-age population (16 to 65) ranks only at the OECD average in literacy and below the OECD average in numeracy.

It’s not just the overall average ranking that matters. What is critical is the proportion of Canadians who are at Levels 4 and 5 in literacy and numeracy — these are the skills levels most important for the handling complex tasks — and the proportion of those at Levels 1 and below Level 1, since they are the least able to function in modern society.

Just 13.7 per cent of adult Canadians were at Levels 4 and 5 in literacy — better than just 11.5 per cent of working-age Americans but well below Japan (22.6 per cent), Finland (22.2 per cent) or the Dutch (18.0 per cent). Equally disturbing, 16.4 per cent of working age Canadians were at Level 1 or below Level 1.

Again, we did better than Americans, with 17.6 per cent at the lowest levels, but were outpaced by Japan, where only 4.9 per cent were at the lowest literacy levels, or 10.7 per cent in Finland.

In numeracy, our performance was even worse. Just 12.6 per cent of Canadians scored at Levels 4 and 5, compared to 19.4 per cent of Finns, 18.8 per cent of Japanese and 18.6 per cent of Swedes, but better than Americans, at 8.5 per cent. At the same time, a large percentage of adult Canadians — 22.3 per cent — were at Level 1 or below Level 1, compared to 28.7 per cent of Americans. In contrast, just 8.2 per cent of Japanese, 12.8 per cent of Finns and 14.7 per cent of Swedes were in this category.

Even more disturbing, a lower proportion of Canadians had Level 4 or 5 literacy and numeracy skills in 2012 than in 2003 while a higher proportion of Canadians were at Level 1 or below in 2012 than in 2003.

So we face a real skills challenge. The OECD makes many suggestions for a better-skilled labour force.

But in Canada this will require a strong effort by both provincial and federal governments and close co-operation between the two.

We will only succeed if skills are treated as a shared responsibility in both designing the strategy and implementing it.

Economist David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com.

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