Labour markets and universities

From time to time, governments ask whether universities should tailor new programs to meet labour market shortages. It is an understandable question. Why do universities seem to be so slow to respond to shortages in supply, while persisting in turning out students with majors that seem to point only to under-employment?

Underlying the question is a range of implicit or explicit criticism about lack of responsiveness, lack of accountability and a sense of entitlement. On occasion, such concerns lead to more direct action. Governments will mandate changes in university spaces by offering targeted enrolment growth. Universities usually find the temptation of additional funds irresistible. Indeed, it has often been universities, hearing of government concerns for such-and-such a supply, that initiate a conversation about more money for more spaces in targeted areas.

Yet neither governments nor universities should be fooled. More often than not, the attempt to link university output to labour-market needs has proved an abject failure. There are two reasons for this.

First, labour market analysis is notoriously tricky beyond the very short term. Politicians, driven by competing demands and the election cycle, often make policy decisions that simplify this analysis even further. To give one example, at the beginning of the 1990s it was concluded that there was an over-supply of physicians in Canada. As a result, medical school enrolment was reduced significantly. Then, by 1999, reports began to discuss the shortage of physicians in Canada while politicians faced growing public unease about wait times. Governments and universities reversed course, pumping considerable amounts of money into medical school programs cut back only a few years before.

The second reason has to do with the cycle required to produce a graduate. Colleges and trades institutes are often portrayed as more responsive to market needs than universities. That is true, but it has much to do with program duration. Many apprentice courses run a semester or less. Thus, it’s possible to have an impact on the labour market in a year or two from the time the need is identified.

In contrast, the time to graduation in university is at least four years. Add two to three years from the time the need is identified until a program is funded, approved and launched. Now the gap between identified need (even if accurate) and first graduates can be six to seven years. That is a very long time in a labour-market cycle. In addition, such rapid expansion necessarily in–creases both demand and costs for good faculty. High salaries and tenure-track appointments mean that universities are committed for the long term to meet short-term demand.

Once again, the 1990s provide us with a good example of this problem. The rise of the Internet, dot-com companies and the threat of Y2K seemed to create an endless demand for grads in computer science and related fields. As a result, various provincial governments threw money at universities to expand such areas. Universities, reeling from cutbacks earlier in the decade, were happy to accept and even encourage the sense of urgency. All of the funding settled into place and all sorts of program expansion occurred – just in time for the bursting of the dot-com bubble in 2000. The results were predictable. Student applications dropped, those in newly expanded programs had difficulty finding jobs, and univer-sities spent years wrestling with excess capacity in the field.

Does this mean that universities and government should resist labour-market pressures? The answer is yes and no. Yes, when the proposed expansion responds to short-term shortages or straight-line extrapolations of short-term situations: universities serve society better when they focus on creating an educated student body with adaptable skills and strong critical thinking. On the other hand, it is arrogant to ignore underlying, long-term trends. The effects of an aging population, an increasingly multicultural society or an urbanized post-industrial workforce must all be considered as programs evolve.

The issue will not disappear. Both universities and governments need to balance responsiveness with a clear understanding of the difference between long-term structural change in society and short-term volatility. Universities can serve the latter by building new programs. The former is best served by ensuring all students have, as is often said, the ability to learn how to learn.

Doug Owram is deputy chancellor and principal of UBC Okanagan. He is also a Canadian historian and member of the Royal Society of Canada.