To Grow BC's Economy, First Grow Schools

Memo to the 'jobs' premier: a strong education system boosts wealth, not the reverse.

By Crawford Kilian 17 Aug 2013 | TheTyee.ca

Crawford Kilian is a contributing editor of The Tyee.

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With September approaching, a call for B.C. Premier Christy Clark to reinvest in schools. Photo by David P. Ball.

Educators must have listened to Christy Clark during the May election campaign with mixed emotions. She couldn't get through a 30-second sound bite without chirping "Grow the economy!" at least twice. Sure, it's a good idea to grow the economy. In fact, educators do it well, and could do it even better.

But despite being a teacher's daughter, Clark has never shown much appreciation for that fact, starting with her long-ago stint as education minister presiding over Gordon Campbell's first assault on B.C. teachers. With September approaching, the premier would do well to heed this reminder: underfunding schools only short-changes the economy.

The Organization for Economic Co-operation and Development has plenty of evidence to prove it. For example, last June, its education blog compared employment statistics for a number of OECD countries, including Canada.

It showed young Canadians with less than high school graduation had only a 59 per cent employment rate in 2011. The same age group, with tertiary (or post-secondary) education, had 84 per cent.

When it came to tertiary education spending, the OECD average in 2010 was 20 per cent above that of 2005, and such spending took up an average of 1.6 per cent of GDP.

The OECD's Country Notes for Canada throw some encouraging light on how we're doing: 51 per cent of Canadian adults held a tertiary qualification in 2011, up 11 per cent over 2000. That makes us the best-educated nation in the OECD, where the average in 2011 was 32 per cent.

But our students pay a high price: according to the notes, "In Canada, public funding for all levels of education accounted for 76% of the total funding in 2009, compared with 84% on average among OECD countries.... At tertiary level, the difference was even greater: 57% of Canadian funding comes from public sources compared with the OECD average of 68%."

Thanks to this low public investment, many students must effectively mortgage themselves. They are keenly aware that some kind of post-secondary degree gives them at least a chance to compete for a decent job.

A private benefit or a public good?

Students and governments alike tend to see post-secondary education as a private benefit, not a public good; so Canadian governments have gradually reduced their support for post-secondary funding, leaving it up to students (and schools) to find the rest.

The Canadian Federation of Students estimates the overall debt burden of students is close to $15.5 billion, and rising. The CFS cites a Canadian study finding that "as student debt rose from less than $1,000 to $10,000 per year, program completion rates for those with only loans (no grants), plummeted from 59% to 8%."

The debt burden tends to skew the careers of those who quit, but also those who carry on. The CFS argues that "student debt appears to be driving committed young doctors away from family practice and young lawyers away from the public service and/or pro bono work. These distorted career choices have an impact not only on individual professionals but also on access to health care and legal services for all Canadians."

And for many graduates, the degree is no guarantee of a job related to their education. As an instructor in career programs at Capilano College (now Capilano University), I found many of my students were university grads with occupationally useless BAs; they had come back for some "practical" education, at additional expense in time and money.

The BC Liberal government is explicit about the connection between post-secondary education and jobs. In an advertorial, Amrik Virk, the new advanced education minister, wrote: "World-class post-secondary education, skills training and other public services are viable only with a strong economy."

He went on: "We are all part of a large collaborative education network that is working together to provide the right training at the right time so we can fill the jobs of today and tomorrow -- wherever they are in B.C."

In effect, then, employers are demanding and receiving a gigantic subsidy for training their workers, with the government acting as a labour broker to deliver those workers, like so many fruit pickers, wherever needed. The needs and hopes of the students and their families are beside the point.

Moreover, the minister puts the cart before the horse: a strong education system drives a strong economy, not the reverse. And every student lost to the economy becomes a drag upon it.

The cost of missed opportunity

A 2012 American report points out that a substantial number of young people aged 16 to 24, especially minority males, are neither in school nor at work: "Their disconnection represents a significant loss of economic opportunity for the nation."

The report calls them "opportunity youth," and that is no buzzword. They are indeed an opportunity disguised as a problem.

"We estimate that each opportunity youth imposes -- on average and compared to other youth -- an immediate taxpayer burden of $13,900 per year and an immediate social burden of $37,450 per year (2011 dollars). These are annual amounts for each year that a youth is identified as having opportunity youth status.

"After each opportunity youth reaches 25," the report continues, "he or she will subsequently impose a future lifetime taxpayer burden of $170,740 and a social burden of $529,030. Thus, the immediate burden is only a fraction of the future loss in potential: on average, only one quarter of the burden is incurred in youth (up to age 24); three-quarters is incurred afterward (ages 25-65)."

B.C. has entirely too many of such opportunity youth. According to the most recent government report on aboriginal education, in 2011-12 we had almost 64,000 aboriginal students in our schools. But in that year only 57 per cent of aboriginal students had completed high school within six years of starting Grade 8. Of those, 62 per cent were females and 52 per cent were males.

By comparison, 84 per cent of non-aboriginal students had completed high school by then, including 86 per cent of females and 82 per cent of males. Those are still terrible numbers: one in seven girls and one in five boys are going into the workplace without even Grade 12.

Jails as social housing

The U.S. report calculates the lifetime tax burden of 6.7 million opportunity youth as $4.75 trillion -- and rising, because each year brings another cohort of kids with no future. They will nevertheless have to be housed and fed, if only in jails or on welfare.

A comparable 2008 Canadian report on the costs of dropping out estimates that dropouts lose $307 billion in lifetime income, with a public loss of tax revenue of $11.5 billion. Meanwhile, they cost us $23.8 billion yearly in health spending, with social assistance adding almost a billion dollars more, and crime costing taxpayers $350 million.

If even one per cent more of our students graduated from high school, the report calculates, we would save $70 billion in lifetime health spending and $2.3 billion in taxes. Costs associated with crime would drop by $1.4 billion.

The OECD reports that our secondary graduation rate has risen from 77 per cent in 2001 to 85 per cent in 2010. So if we got the rate up to 90 or 95 per cent, we would save billions more in crime-related spending alone.

Sweden, by comparison, shares first place in employment among OECD countries along with Iceland, Norway and Switzerland. The income gap between those with secondary education and those with tertiary is narrower than in many countries, if only because the better educated pay higher taxes.

"In 2010," the OECD says, "Sweden devoted an annual expenditure of US$11,700 per student from primary to tertiary education, compared to an OECD average of $9,300, which represents 7% of its GDP to education at all levels."

Canada spends close to that proportion, 6.6 per cent, with more than twice as much going to tertiary students as to secondary. Those who aren't finishing high school, and those who don't complete post-secondary, are saving us a lot this year, but they'll make us pay through the nose for the rest of our lives.

Taxpayers or tax absorbers?

If we paid to keep those young people in school and graduated them into the job market, they would literally repay the investment. A Harvard study estimates that every dollar of government spending generates $2.12 of personal income, and every $35,000 generates another job. Such spending enhances consumer demand, improves economic security and better distributes the tax burden. After all, if more dropouts finish school and get paying jobs, they become taxpayers, not tax absorbers.

So if Premier Clark really wants to grow our economy, she should be investing more in the schools and lifting some of the burden off students and their families. Good education systems fuel the economy by attracting investment in search of capable, adaptable workers -- especially adaptable.

After all, we can't predict tomorrow's economy. Thirty years ago the web did not exist and no one expected it. Educators were told to train more keypunch operators. The next 30 years are likely to see more economic upheavals, rendering many of our present jobs obsolete. To cope with that, we'll need a solid core of graduates of general education programs, able to master and exploit whatever the next surprise is.  [Tyee]

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