Government and businesses often define their wealth by their capital.
This includes such things as machinery, buildings, land, resources and equipment.
Another type of capital, which isn’t noted on financial statements, is human capital.
This type of capital is the investment government and businesses put into the workforce.
For governments, this investment includes kindergarten to Grade 12 public education and tax dollars that are transferred to post-secondary institutions.
Businesses invest in their employees by providing on-site training, certification and in some cases funding to pay for further schooling.
But what happens when teenagers drop out of high school, when capable young adults opt out of further education and work at low paying jobs, and unskilled adults are unable to find well paid full-time employment? What we have is under-utilized human capital.
If a company invests in new machinery and doesn’t take advantage of the full capabilities of that machine, they aren’t getting the best benefit possible.
The same holds true in terms of investment in human capital.
When the government spends money to educate its citizens and they are unable or don’t take advantage of that education, then as a country we are not getting the best we can out of our people, which can have a negative impact on our standard of living.
Back in the 19 60s and ’70s when many jobs required a Grade 10 education and a high school diploma was the standard, Canada utilized its human capital at a higher rate than today.
In 2012, a high school diploma provides a general education, but it doesn’t provide the education and training needed to find a good job in today’s tech-savvy, competitive work environment.
Yet, many high school students are not willing to go to college or university, or gain further training.
Instead they opt to enter the work force with few skills.
But how long can someone work and support themselves (or a family, for that matter) at $12 an hour?
I regularly meet adults who talk about going back to school, who want a career, a better paying job, to be able to afford to buy a house, but are unwilling or don’t know how to take that initial step and go back to school.
There are agencies, avenues and mechanisms developed to try and make that return to school as easy as possible.
Community colleges such as Okanagan College provide free upgrading courses that allow adults—regardless of their level of education—to begin their college education.
And for those who are ready, locally we have post-secondary programming at Okanagan College and UBC Okanagan.
Both UBCO and Okanagan College are publicly-funded schools, like most of the post-secondary institutions in this country.
This means the tuition charged is significantly less than the actual cost: taxpayers (via the government) are choosing to invest in the development of human capital.
To attend a community college or state university in the U.S. you can expect to pay anywhere from $7,000 to $33,000 US per year for tuition alone, depending on your family income.
To attend a university or college in Canada, the range is $3,000 to about $6,000 per year, regardless of your family income.
How can governments and businesses motivate unskilled workers to consider further training and education?
To what extent can we ensure we maintain our standard of living through investment in our human capital?
An age-old argument focuses on whether education is a right, or a privilege. What’s clear, though, is that more than ever, it is a necessity.