Insufficient reading skills in Canada translate into declining productivity levels
Frank McKenna
Special to Times Colonist
Sunday, September 09, 2007
There is a prevailing view that Canada is a literate nation, with individuals fully capable of participating in the modern economy. Evidence suggests otherwise. An alarming number of citizens are unable to comprehend, compute and communicate at a level deemed necessary for a knowledge worker.
Almost four in 10 youths at age 15 have insufficient reading skills; while more than two in 10 university graduates, almost five in 10 Canadian adults and six in 10 immigrants have inadequate levels of proficiency in English or French.
Moreover, discrepancies exist across regions, gender and socio-economic lines. Divides are also present between rural and urban residents, as well as between Canadian-born individuals and new arrivals.
These outcomes pose a serious threat to our competitive standing in the global marketplace.
Poor literacy rates have contributed to our anemic productivity levels. Out of 23 major industrialized nations, Canada's international productivity standing has slid from third to 16th position in recent years.
From an annual trend rate of two per cent productivity growth in the 1990s, the business sector has only been able to eke out an average annual increase of one per cent between 2002 and 2006.
Reversing this dismal trend will require a more skilled workforce, which is tied to both education and literacy -- as each is known to reinforce the other. Moreover, boosting productivity will lift the standard of living of all Canadians.
A Statistics Canada study has found that a one-per-cent increase in literacy relative to other countries produces a 2.5-per-cent increase in the level of labour productivity. That would mean a boost in national income by $32 billion for every one-per-cent increase in literacy scores.
Addressing our literacy challenge has as much to do with remaining relevant in the global economy as with deriving rewards from it. Canada has experienced a steady shift toward a services-based economy, which now represents 70 per cent of GDP. Within services, the strongest growth comes from employers that require high skills -- such as information and communication technologies, health care and public administration. Higher literacy rates are needed to further facilitate these changes and reduce the economic and social costs borne by workers displaced in this new environment. And the demands for higher literacy skills will only increase in the future.
The benefits also extend well beyond the overall economy. As discussed in a recent TD report on literacy, raising the performance of those with inadequate literacy could create thousands of jobs, significantly lower unemployment, and materially boost personal incomes. To illustrate, the average Canadian with strong literacy skills, as based on benchmark international literacy surveys, has income twice that of individuals with poor literacy abilities. They are also less likely to become unemployed, experience shorter durations of unemployment, and are more likely to be successful in developing new skills. In other words, higher literacy unlocks potential.
These are compelling reasons why policymakers should treat literacy outcomes as a national priority.
Strategies to improve literacy must emphasize youth programs, particularly in the earliest development stages and among youths from disadvantaged backgrounds. The rationale is straightforward: The benefits accrue over a longer time span than for adults. Moreover, literacy appears to be a virtuous circle in skill development. Higher literacy promotes greater education that, in turn, lifts literacy further and helps to develop skills. This self-reinforcing cycle leads to greater returns over time.
Yet one needs to be careful about basing policy on cost-benefit analysis alone. We do not truly know the impact of one dollar invested in child/youth literacy relative to one dollar in adult literacy. Further research is needed in this area. Moreover, the cost-benefit approach does not capture the societal gains. How does one measure the increased community participation of adults with greater literacy skills? What is the dollar value on a higher quality of life and greater independence for older Canadians?
Both the provinces and the federal government have been heavily involved in literacy initiatives in recent years -- and this is most welcome. However, there is little evidence of any improvement in literacy levels over that time, which suggests that the current approach is not working.
It may be that meaningful progress is impeded by lack of co-ordination. For instance, youth literacy falls largely under the umbrella of education, a provincial responsibility, but immigration is a federal concern.
There is overlap, too, in adult literacy. At the federal level, Human Resources and Social Development Canada runs the Office of Literacy and Essential Skills. Indian and Northern Affairs Canada, Canadian Heritage, and Citizenship and Immigration Canada also run literacy-promoting activities. Meanwhile, the provinces have their own adult literacy initiatives through a variety of programs, often tied to education.
This situation might be remedied if the federal government takes responsibility for setting national literacy standards through a centre of excellence that collects best practices and acts as a repository of research and analysis. Meanwhile, the provincial governments could become explicitly responsible for program delivery. Both levels of government would need to provide financing for the initiatives.
The private sector must also play a role, given how much it has to gain from improved outcomes. Many businesses already provide substantial training programs, but they tend to be focused on specific skill sets. Companies should think about offering employees the opportunity to develop language skills and more basic abilities that could reinforce or bolster their literacy. This can be done in-house or through employer-sponsored training. Businesses can also support literacy initiatives through their charitable giving activities. TD, for instance, invests more than $1.5 million in child literacy each year.
International Literacy Day, which takes place every Sept. 8, encourages people worldwide to recognize the importance of this critical skill set. This should also be a time of reflection for Canadians. Our future well-being requires higher literacy levels. We must make this a national priority, with both public policies and business initiatives that derive the greatest long-term gains.
Frank McKenna is former premier of New Brunswick and former Canadian ambassador to the United States. He is the deputy chairman of TD Bank Financial Group.
