Archive for June, 2013

Journalists in Glass Houses

June 22, 2013

Folklore, otherwise known as common sense, advises that those living in glass houses should not throw stones. A search of the Speaker’s Bureau website for Canada lists the following journalists offering their speaking services for pay – Kevin Newman, Don Martin, Jeffrey Simpson, Chantal Hebert, Andrew Coyne  and George Stromboulopoulos amongst others. Would they be willing to list payments received from organizations, charitable and other, where they were involved over the past five years? How similar is the case of journalists to that of MPs?

It might occur to readers and listeners to wonder who pays journalists for their speaking engagements and who pockets the money, the journalists or their employers. Do journalists have employers who pay their regular salaries? Do they get paid in addition for speaking engagements? Do they share such earnings with their employers? Should they? And do journalists understand why organizations are willing to pay celebrities to be speakers. You might think they would be sensitive to such issues, explain why their case is different, as well as having a basic economic understanding of how events are organized.

Case of academics

Before examining their case, and mindful of glass houses, a word about my own profession as a university academic. Academics are paid a salary by universities for a combination of teaching, research and administration. The knowledge gained, especially in certain disciplines, such as medicine, law, engineering, business and economics (mine) results in invitations to give talks, some of which carry honorariums, as well as to do private consulting. I am not aware that these payments are either paid to or shared with the university, whence they gain much of the expertise to be invited as speakers.

Canadian faculty salaries are funded by a combination of student fees and government revenues. The economic circumstances are such that it would probably be difficult to attract certain faculty unless they had the opportunity to earn an additional stream of consulting/speaking income. This is a peculiarity of their profession, but providing they perform their paid duties to the university’s satisfaction, this stream of income is allowed, sometimes with strings attached.

Each occupation has particular circumstances which determine how persons are remunerated. In universities, I have known faculty who own and operate farms and businesses on the side, thereby earning an additional stream of income. Some may spend time managing their private investment portfolios. There are numerous ways in which people in different occupations spend their time and earn income. Even bureaucrats are known to have run personal businesses during working hours. The internet now makes this easier for them. Before criticising others repetitively and at great length, it is wise to think about one’s own circumstances. This brings us back to the case of journalists.

Case of journalists

While the situation of an employed journalist may differ from a freelancer, those who are employed are paid a salary and benefits by their publisher or broadcasting enterprise, like CBC/Radio Canada, CTV and Global or by a print publisher. Their expertise is developed in part on the job, and their public face and name become familiar largely because of the employer (firm) for which they work. These persons are invited to be speakers for organizations and events for which they are paid. The organizations are typically funded by a combination of consumers, taxpayers, and private enterprise especially through the sale of advertising. Unless journalists share their speaking fees with the organizations they work for, or speak for free (or only for expenses), they are acting in a manner similar to MPs and Senators whom they freely criticise.

An earlier practice of journalists in Ottawa was to write speeches for MPs which were then delivered in the House of Commons, at times for MPs on opposing sides of the same issue. It is not impossible to believe that the journalist might then comment on the speech in a news story. I gather the National Press Organization advises against this practice now. Certainly they don’t talk about it.

Another factor missing from the journalists’ discussion of this issue is the economics of event organization. Charitable and other organizations seek a prominent speaker so that they can then get sponsors for their events. The money collected often fully pays for the speaker, and revenues collected from those attending the event go straight into the pockets of the organization. Without the paid speaker they could not raise as much money. The fact that the organization (charitable or other) did not raise as much as it expected, and asked the speaker to return the speaking fee is a reflection of the organization’s competence, or lack of it, to organize such events. They took a risk and it did not work out. This happens with market transactions. Don’t criticise the speaker for having agreed to be the drawing card.

Such hypocrisy abounds and helps to account for the low trust that the public has for journalists who make a living out of pointing the finger at others, otherwise known as being selective in their choice of stories. As well, the public questions whether the news media can be fair in reporting stories about the institutions which are prominent advertisers in their newspapers and on air. We are fortunate to have social media where these topics are reported and discussed, bypassing traditional media sources. The financial plight of traditional news media is a reflection of this new avenue of competition.


University Student Debt – Part 2

June 18, 2013

A quick internet search found a number of sites concerned with financing university education in Canada. Other countries have similar sites.

Carleton University provides current estimates of annual undergraduate education costs as of June 2013 at


Tuition                      $6,613.00 to $9,780.00

Room and Board     $8,863.00 to $9,531.00

Off-campus living     $7,600.00

Books and Supplies  $1,300.00

Personal expenses    $2,000.00

 Approx cost for one academic year:  $18,776.00 to $22,611.00

* International undergraduate student fees range from $18,805 to $22,158  (CDN)

The high fees for foreign students appear somewhat amazing but are probably the same at other universities. The differential may bias enrollment towards foreign students which cost no more to educate than domestic students. In Australia, where a similar fee differential occurs, it has lead to Australian students complaining that they are outnumbered by foreigners. In the UK, and probably elsewhere, science programs have high enrollments from Asian students.

Larry Willmore points out that the government subsidy per student for domestic students may be higher than for foreign students, and this may help to explain the differential. (A topic for future investigation).
The following is a quoted extract from the Canadian Alliance of Students Association website at


  • If you can finance your education through scholarships + work+ family, fine. But if you can’t, don’t assume you have no choice but to pile on the government loans and private loans and credit card debt. Get serious about cutting your costs….
  • And by getting serious, I don’t mean the usual stuff you hear, like get a cheaper student chequing account. I mean, think-outside-the-box serious. The election is over, so vote for affordable education with your choices.
  • Stay at home the first 2 years and attend your local community college before you transfer to take your 1/2-price degree from Big U. Get your education in a cheaper province. Or get it in a cheaper country (just check the transfer credits first). Or seriously think about the trades. When was the last time you met a plumber working as a barista because he couldn’t find work in his field and he had to pay off student loans?

These comments are interesting, apart from some of the questionable grammar. First is the recognition that costs can be reduced by living at home, but second is that interesting and rewarding careers can be found in the trades, which have often been considered (by my generation) as less desirable jobs.

The following extract comes from a finance writer and journalist who follows student financing issues:

“In fairness to our (Canadian) federal government, it has programs under the Financial Consumer Agency (FCAC) that help Canadian students save by improving their financial literacy.   Start with The Moneybelt. Debt Reduction and Money-Saving Tips from Memorial University of Newfoundland.”

Many of their tips will help students no matter where they live. Also see

Jeannine Mitchell, Founder

Student Finance 101

Jeannine Mitchell is an award-winning finance writer and a former associate editor with Financial Post Moneywise magazine. Her work is widely published and her non-profit website — Student Finance 101 at has been featured in publications ranging from campus and online newspapers to the National Post.

The main arguments by student organizations follow the familiar line that education promotes economic growth and that the costs are repaid in later years through taxation of higher incomes. Similar arguments are made for other government supplied and supported goods and services. Healthcare, for example, should be provided free or at low cost to workers because they can then work longer and pay more taxes. The entitlements provided by the state have to be paid for in some way and most interest groups consider it should be others not them.

In the case of higher education, an issue has been that the overall costs have risen as has the share born by students and their parents. The push back has come most prominently in Quebec where some argue for either frozen fees or their abolition. This tends to force universities to reduce costs and the quality of the educational experience. As Geoffrey Simpson and others have pointed out, the students as well as the state are the ones who will suffer from a diminished educational experience.


Killaine Sharman comments:

I think $20k is a lot of money for most people to pay for their kid’s education, and imagine if you have 2 or 3 kids in school at once, how does that work? The idea of having a job at the same time as you study is fine for some kids, but for me that would have come at the expense of the sports I did and competing on the Carleton X-C ski team which was the primary source of my identity as an undergrad.  Had I been forced to forego that and fill my weekends with shifts behind the Safeway cash register instead, I’m not sure who I’d be today but I’m sure it would be a lesser and less unique, less rounded, and less fulfilled person. Along the same lines, what about people who are parents, or caring for older parents, or people who have artistic or musical interests they’d like some time to pursue. I think the idea that we all just work and go to school for 4 years has the potential to create a really boring culture and a group of very one-dimensional and probably disgruntled people. 

I don’t know what the answer is to a more affordable education, but I suspect it is a balance between working, saving and borrowing, but I’m not sure what the proportions should be or what it is. How much do students typically borrow per degree. How many students don’t go to school because of the cost. I think it is important to understand these things to know if we even have a problem.  I do think education should be available to people of different income levels and not be a dividing line between rich and poor, continuing to perpetuate cycles of poverty.

With regards to foreign students, I think the higher their tuitions the better. Their education in Canada is nothing but a privilege and we have no obligation to them but to provide the service they are paying for. 


Ole Bredberg comments:

Paid work during the university years is an effective way to pay the bills. Working part-time during school (16 hrs / week * 32 weeks * $10.25 / hr Ontario minimum wage = $5,248) and full-time during the summer (40 hrs / week * 16 weeks * $10.25 / hr = $6,560) would generate about $11,808 pre-tax (not much tax on that amount), which is 52% of the upper end of your total cost range of $22,611, and this is at the minimum wage and only 16 hours per week during school. This is something I think an ambitious, focused, resourceful, and hard working student should be able to achieve, and it would greatly impress any prospective employer upon graduation.

Global Education Trends

June 14, 2013


It took about 45 minutes to receive and answer to my request for country information on educational data. Larry Willmore kindly provided it. It was an obvious source, the OECD Global Education Trends, which I should have known about.

The full report is 565 pages and a shortened version is 91 pages at

This is still too long for our main interests. The 91 page report contains the following summary:

Education at a Glance 2012: Highlights offers a reader-friendly introduction to the OECD’s collection of internationally comparable data on education.

As the name suggests, it is derived from Education at a Glance 2012, the OECD’s flagship compendium of education statistics. However, it differs from that publication in a number of ways, most significantly in its structure, which is made up of five sections that explore the following topics:

Education levels and student numbers: This section looks at education levels in the general population, how and where young people are studying and how well they make the transition into the world of work.

The economic and social benefits of education: This section looks at the extent to which education brings economic gains to individuals, in the form of higher incomes and lower unemployment rates, and at how these benefits serve as an incentive for people and societies to invest in education. It also examines the societal benefits related to having a highly educated population.

Paying for education: This section looks at how much countries spend on education, the role of private spending, what education money is spent on and whether countries are getting value for money.

The school environment: This section looks at how much time teachers spend at work, and how much of that time is spent teaching, class sizes, teachers’ salaries and the age and gender distribution of teachers.

Equity: This special section looks at issues relating to equity in education, particularly the accessibility of education at all levels, intergenerational mobility, gender gaps in education and the impact of socio-economic background on student performance, especially for the children of immigrants.

In the interests of further brevity, below I extract findings related to the first three bullet points – education levels, economic and social benefits, and paying for education.  I quote the OECD average for a number of measures followed by where Canada stands in brackets where available. Figures for other countries such as Switzerland, the Netherlands, Portugal and the US can be found in the report.

  • A higher % of younger people are now studying to at least the post secondary level than before, 62%  (82%) of those aged 55-64 year olds and 82% (92%) of those aged 25-24.
  • A higher % of the population has attained tertiary (post secondary) education than before, 23% (42%) of those aged 55-64 and 38% (57%) of those aged 25-34.
  • In 2010, 61% (75% for US) of young people entered university level education compared with 48% in 2000. No figures are reported for Canada for either 2000 or 2010.
  • Entry rates for vocationally oriented tertiary education rose from 15% in 2000 to 17% in 2010. No figures shown for Canada and US.
  • First time graduation rates from university level education in 1995 were 20% (27%) and in 2010 were 39% (36%)
  • Earnings tend to rise in line with people’s level of education. People with higher (tertiary) education can expect to earn 55% more on average in OECD countries than a person without tertiary education. Those who have not completed secondary education earn 23% less than those who have. Across all countries and all levels of education, women earn less than men, and that gap is not reduced with more education.
  • In general, people with higher levels of education have better job prospects; the difference is particularly marked between those who have attained upper secondary education and those who have not.
  • In all OECD countries, tertiary (university) graduates are more likely to be in work than non-graduates. Men generally have higher employment rates than women; for those with tertiary education the difference reaches more than 25 percentage points in favour of men in some countries.
  • Rewards are typically higher for individuals who attain tertiary education than those with upper secondary education or postsecondary non-tertiary (vocational) education. Tertiary education brings substantial rewards across OECD countries, generating net returns (private benefits less private costs) of US$ 162 000 for men and US$ 110 000 for women. (Private costs include tuition fees and foregone earnings, while private benefits include increased lifetime earnings).
  • Individuals invest an average US$ 55 000 to acquire a tertiary education qualification, taking into account direct costs such as tuition fees and indirect costs such as loss of earnings while studying.
  • Adults with higher levels of educational attainment are more likely to live longer, show higher levels of civic engagement and exhibit greater satisfaction with life. There is a clear positive relationship between education and life expectancy, although it is not as strong for women.
  • There are significant differences in voting behaviour associated with educational attainment in most countries. On average, the gap in the voting rate between high- and low-educated adults is 14.8 percentage points. This gap is particularly wide among young adults with a difference of 26.8 percentage points

Student Debt in Canada

June 10, 2013

For many people financing higher education ranks third in importance after buying a house and a car. A mortgage may have a 25-30 year repayment period and an interest rate which can be renegotiated. Purchase of a car can involve a loan and associated interest costs and usually has a shorter term than a mortgage. The purpose of a student loan is also to invest in capital, but human as opposed to physical capital. The anticipated payoff is the expected lifetime earnings and lifestyle.

Much of public debate on student debt discusses whether it is too high and too much of a burden on the borrowers at this stage of their careers. In contrast, home and car loans less frequently attract this kind of attention, although recently the Bank Of Canada, while keeping rates low, have cautioned people about borrowing which seems odd.

Students (and their parents) argue that while students benefit from higher education, so does the state through the taxes they pay once they are working. Others contend that university graduates have higher lifetime earnings than others and such a subsidy is not warranted. Quebec students are prepared to cause civil unrest in the name of keeping fees low if not free.

Here I suggest that a combination of preplanning and the management of time and income from a young age can reduce if not eliminate the debt which a student has upon graduation. I admit that it’s difficult for a parent or grandparent to persuade children that they should save for their education, as opposed to spending today for some immediate gratification, but possibilities do exist.

Each year in the US, Sallie Mae (SLM Corporation) publishes a study “How America Pays for College.”  For 2012, a rough answer is $21,000 to $24,000 a year. Sources of funding include student borrowing (15%), parent borrowing (9%), parent income and savings (28%), student income and savings (12%), relatives and friends (4%), and grants and scholarships (29%). While the cost level and the breakdown of funding may be different in Canada than in the US, the categories of income are roughly the same.

How to reduce student debt?

School children can start to earn as caregivers (children and others) and by doing chores such as yardwork. Teenagers can earn $10 an hour as babysitters. $10.25 is the minimum wage in Ontario for more regular work. Once enrolled in a university or college, there are part-time jobs during the school year and summer jobs during vacations. Online jobs are now available where the person does not have to leave their home. A substantial cost of higher education is living costs. If the student can live at home, this cost is reduced.

Different courses have different fee structures. Medicine, law, engineering and computer studies have higher annual fees, but banks will be willing to lend to such students because their future income earning ability is sound. And students are willing to borrow because they know that as well. This is less so the case for a BA in arts, where there is an oversupply of graduates and far less well paying job opportunities.

Australia has an income contingent scheme for financing higher education.
While details can be gained from the web, the gist is that the government establishes the price of a student’s academic program and pays the university this amount. The student then incurs a debt of the same amount which is repaid over time once the student starts to earn. Collection is made through the income tax system, with repayment depending on income earning ability. No interest is charged until payments start to be made. There were strong protests when the policy, proposed by Bruce Chapman, an economist, was introduced but it is now fully accepted. Some problems do arise when a borrower leaves the country and pays no Australian income tax. Proposals are now afoot to address this issue.

A short personal reminiscence when costs were lower but so were incomes. There was a great deal of time during each term which was not spent in attending classes or studying in the library or at home but in a variety of immensely enjoyable but not academically rewarding pastimes. The time could have been spent earning part time income. Many students did just that working in the library, cafeterias, maintaining the grounds, or acting as research assistants, teaching assistants and markers for large courses. Between terms at Xmas, I worked sorting mail on the graveyard shift at the post office and selling booze in the liquor store. The summer break provided a longer opportunity to earn money and I did so as a deckhand on a tugboat, as a tourist bus driver in the Rockies, in construction driving a cement truck and in a bank. Friends had equally varied and often more rewarding summer jobs.

When people complain about student debt, a few questions about their lifestyle and where savings might be possible are worth asking.

Occupations Today and Tomorrow

June 3, 2013

Attempting to foresee future economic, political and social outcomes is a perilous exercise, even when confined to the next five and more so for the next ten years. Here I outline the possible impact on occupations of selected demographic and technological changes in relation to Canada. One thing is certain, the next few years will see an ageing of the population and people living longer. Even now it is not unusual to know a number of people living beyond a century. And there will continue to be numerous technological changes.


An ageing population presents a series of implications. With a fixed population size, the share of those available for the workforce will decline. There will be increased demand for medical services and for those caring for the elderly, as governments health budgets are already experiencing. This will provide job opportunities in certain health and care related fields.

While an ageing population diminishes the size of the workforce, there are adjustments which can be made such as raising the age of retirement, encouraging retirees to remain working and attracting more women into the workforce. Living longer means that savings may be inadequate for a longer period of retirement, and cause people to work longer. The ability to move work to the worker at home, as opposed to moving the worker to the work will increase employment flexibility and make working longer a more attractive proposition.

I am not convinced that encouraging higher rates of immigration is a necessary solution. There are countries with ageing populations which have not had a marked population increase, Switzerland and the Nordic countries for example, which seem to have survived. Japan is an extreme case of population ageing. It has experienced economic stagnation for the past two decades, but only a part of this is due to the age structure of its population.  However, demographic factors will influence the demand for different types of jobs.

Technological change

Much of the change over the past ten years has evolved from developments in communications technology. Too numerous to list, some writers suggest that we are only about 5% on the way to the changes which are yet to occur. What the future will look like is impossible for the layperson (like myself) to predict. However, there are publications which monitor developments in these and other areas. One of these is the Economist which has a quarterly review of technology, and in its May 25, 2013 edition published an article entitled “The Age of smart machines, Brain work may be going the way of manual work.”

Another source is McKinsey and Company which discusses disruptive technologies. These are ones likely to disrupt traditional production processes, and while killing certain types of jobs will create new ones.

Over the next ten years, many jobs will become extinct while new ones will be created. Keeping up to date will be the challenge for determining what type of skills will be needed.

What are today’s occupations?

It is possible to consult reliable statistics on occupations in the Canadian labour force (and that of other countries), far more reliable than many financial statistics which are monetary measures. The former measure real people in real jobs, and a 7% unemployment rate means that 93% of the workforce is employed. The question is in what industries and occupations are they employed today, and in the future where will there be strong demand and for what particular skills.

Using Canada as an example, with a labour force of 19 million, the 93% of those employed constituted 17.6 million persons in April 2013. The goods producing sector accounts for 22% (3.8 mil) and the services sector for 78% (13.8 mil). Source: Statistics Canada, CANSIM Tables 282-0088, 282,0089.

The 3.8 million employed in the goods producing sectors are distributed by industry:


Agriculture                                               321

Forestry, fishing, mining, oil & gas        358

Utilities                                                     134

Construction                                            1301

Manufacturing                                        1736

The 13.8 million in services:


Trade                                      2685

Tpt and Warehousing             852

Fin. Ins. Real Estate               1124

Professional sci. and tech.     1348

Business, building services      692

Educational                              1291

Healthcare and soc. Ass.         2187

Info. Culture, recreation           785

Accom. and food                       1121

Other                                           746

Public Admin.                            974

Stating that Canada is predominantly (78%) a service economy is not especially helpful as services cover a wide range of skills from store clerks to computer programmers and from cleaners to surgeons. While the country does have a resource based economy, this sector accounts for only 2% of employment and agriculture for 1.8%.

Over the years there has been a phenomenal increase in agricultural output associated with a declining number of employees and share of the workforce.  Capital has substituted for labour with mechanization; crop yields per acre have increased with improved seeds, fertilizer and land-use practices. A typical cow now produces 22,000 lbs of milk per year compared with 5,300 lbs in 1950, a remarkable 5% increase a year for each of the past 60 years.

Another Statistics Canada Cansim Table 282-0009 for April 2013 shows the occupational classification of the workforce. For example there are 3.1 million people in business, finance and administrative occupations of which 19% are in professional jobs and 52% in clerical occupations. In health occupations, 48% are labeled as professionals and 52% as technical, and related occupations.

For those considering a service related job, being told that Canada is predominantly a service economy with 78% of the workforce classified as such is not much help. However the numbers can be broken down to show which service industry is growing and which stagnant and declining. A further means of inquiry is to talk to people who have retired from a chosen occupation, those who have been in it for several years and those contemplating entry. From these sources, it will become clearer what particular skills will be in demand.

Apprenticeships and lifelong learning

A typical progression is pre-school, junior school, high school, and university and/or community college. Data show that those with a university degree have higher lifetime earnings and are more likely to be employed (or have a lower unemployment rate) than those without a degree. But there are considerable differences between those with degrees in different areas, and those with a graduate as opposed to an undergraduate degree. For example a bachelors degree in Computer Studies and Engineering will have higher lifetime earnings than those with a BA in English and Sociology. Thus the choice of course taken will partly determine future income. It may also determine job satisfaction, where a lower paying job coincides with the individual’s preferences.

Because a university education is considered the pinnacle of the educational ladder, the discussion tends to ignore those occupations which do not require university attendance, but which can be rewarding and generate job satisfaction.

Examples include people who are interested in cooking, becoming chefs and perhaps restaurant owners, and even a celebrity chef, carpenters who find satisfaction in cabinet making, building and renovating housing, plumbers and electricians, healthcare workers, dental technicians, firefighters and so on. These occupations may require both on the job training and attendance at a community college as opposed to a university.

Increasingly students today are attending community colleges on their own, after a university degree to gain practical experience or in conjunction with attending university. The range of courses offered is best seen by visiting a college’s website, like Algonquin College (but there are many others). Under ‘A’, for example, are Advertising Management, Automotive Service Technician, Aviation Management, Architectural Technician. Full and part –time courses are offered. Significant salaries can be earned in occupations such as plumbers, electricians, police workers, fire fighters, and healthcare professionals amongst others.

Some employers offer work-study arrangements where students get the opportunity to work part-time while studying. This can be an advantage both to the student and the employer providing a sort of apprentice arrangement. In some countries this is a formalized part of the educational arrangements. Austria, Germany and Switzerland have a tradition of combining schooling with a system of apprenticeships which helps to adjust labour supply to current needs.

But current conditions may not assure lifetime employment and individuals will have to engage in continuing education (lifelong learning). This is often available online, and may not require actually taking time off for further study and loss of income. While professions have always been required to update their skills, this will also apply to most other occupations. The idea that persons receive their education and training in their early years will increasingly be replaced with some learning in these years, and more in later years in order to stay abreast of developments affecting their occupations, and even for changing occupations.