Wages go up with improved essential skills

April 27, 2015, Ottawa — Though most Canadians don’t like to admit to essential skills deficiencies, a new report from the Canadian Apprenticeship Forum (CAF-FCA) suggests that individuals stand to earn more by investing in upgrading skills such as numeracy and problem-solving.

“There is still a stigma attached to having poor essential skills when the reality is, most of us recognize our own weaknesses,” said Sarah Watts-Rynard, CAF-FCA’s executive director.

“Whether someone is interpreting a document or doing math calculations, there is generally room for improvement. This research tells us higher skills result in better pay — something that may help individuals overcome their reluctance to seek upgrading.”

Collaborating with University of Toronto researchers Morley Gunderson and Harry Krashinsky, CAF-FCA examined how Canadian workers as a whole, as well as sub-groups of journeypersons, Aboriginal people, persons with disabilities and immigrants, stood to gain by improving their literacy and essential skills. Multiple data sources and measures consistently showed the effect of higher skills on pay is almost always positive, statistically significant and quantitatively large.

Preliminary indications suggest the effect on journeyperson pay is the largest of all groups, being well over twice that experienced by Canadians in general. This finding is based on a focused response group of journeypersons representing various regions, business sizes and trades.

“This sends an important message to teachers, parents and young people who aren’t convinced the skilled trades require strong math, science and reading skills,” said Watts-Rynard. “Today’s skilled trades workplaces are increasingly complex, using new technology to solve problems on the ground. Essential skills are the foundation of all other workplace learning, greasing the wheels for more complex tasks. It comes as little surprise that workers with the skills to get ahead of the curve make a wage premium.”

The value employers place on essential skills among their workers aligns with research CAF-FCA released in 2014. That study demonstrated a positive return on training investment for skilled trades employers who invested in essential skills training for their tradespeople. For every $1 invested, employers observed an average return of $3.08. Employers said, in addition to a tangible financial benefit, training increased bill-out and work rates, customer retention, new process innovation and a tradesperson’s ability to absorb more complex training.

The Effect of Literacy and Essential Skills on Labour Market Outcomes for Canadian Workers is available at caf-fca.org.