Is a university degree as important as it used to be?

I recently took a look at the increase in university-educated population and tried to see the correlation with income levels.  I am grumpy with some U.S. economists who seem to infer that university education will solve the problem of unemployment and income disparity.  I personally am not sure that encouraging a short order cook, construction worker, retail sales clerk or janitor to get a university degree will alter their income potential that much – assuming they stay in those occupations of course.  In addition, economies need these jobs so not everyone will be able to work in a professional occupation.  I realize this is a complex argument with many contours but that is exactly why I don’t like the simplicity some folks are bringing to it.

BC was second best in Canada for growth in its university educated population and second worst for wage growth (among the 10 provinces).  The province has more than doubled its enrollments in university (from 1999 to 2009) and saw an 18 percent decline in college level enrollments.

At the same time, sectors such as retail sales, accommodation and food service, construction and administrative support services accounted for nearly 60 percent of the net employment growth from 2000 to 2010.  These sectors are far more likely to require college or trades education than university education.

Food for thought.

Growth in university educated population and average weekly wages (2000 to 2010)*

10 Year Avg. Weekly Wage Growth 10 Year Growth in University Educated Population
Canada 33% 55%
Newfoundland and Labrador 50% 35%
Prince Edward Island 45% 84%
Nova Scotia 40% 46%
New Brunswick 35% 40%
Quebec 28% 46%
Ontario 29% 56%
Manitoba 35% 44%
Saskatchewan 53% 44%
Alberta 53% 79%
British Columbia 29% 64%

*those with a university degree.

Sources: Statistics Canada CANSIM Tables 282-0072 and 282-0004.

3 thoughts on “Is a university degree as important as it used to be?

  1. Sure, it makes sense. There are way more university graduates crowding in to entry-level jobs, while their career ladder is blocked by people who are working longer, in part because they can’t retire (both due to lack of saving and an increased life expectancy.) Furthermore, cutbacks at virtually all government levels are removing a number of jobs that would be stable and above-average earning from the supply.

    Meanwhile, skilled trade shortages are being shouted from the tops of mountaintops and nobody is answering the call.

    Imagine, if you will, if the high school curriculum was such that, in lieu of a number of academic courses, you could spend half your grade 11 and 12 year learning a trade and getting apprenticeship training. Students who had no interest in going to university (or more interest in getting a job quickly) could get themselves half-way to a skill that someone might hire and the barrier to entry goes down. Seems reasonable to me.

  2. I really feel that unless you are focused on an area of speciality to work in, see law, health care, teaching or IT that an university degree (Arts esp.) will be of reduced value in today’s economy. I am a Gen Xer who followed a dream to work in the media field. I am planning on a complete change of direction and gaining some trade skills. The 80s and 90s are over and they won’t be coming back.

    The cold hard reality for many of us on the East Coast is unless you are working in the services/health/education (and with budget cutbacks expect more downsizing) finding work is a challenge. I am making the same wages today as I was in the late 80s.

    Employers know people are desperate for work and will have you working for entry level wages regardless of how much experience/education you might have. So baring in mind my educational background is dated in terms of the demand for people in my field, a change is necessary based on the fiscal realities of the East Coast.

    The question is with a looming trades worker deficit in the next few years why aren’t people going for training in an area, that unlike very few, are crying for workers? Where is the disconnect? With anticipated tuition hikes for universities this may force young adults to reconsider a trade skill instead.

  3. The most pressing concern is once you earn a degree with a government-backed loan you cannot go back with another government-backed loan to get a trade.
    Economists shouldn’t feel good about those created jobs. Divided the numbers by three from the Globe and Mail edition for a rough guide to 40-hour-week equivalent work in those honourable occupations.
    But right on writing it, and indeed: food for thought.

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