This week, the Ministry of Education – in partnership with the Ministry of Business, Innovation and Employment – released their Tertiary Education Strategy for 2014-19. The overarching aim of the strategy is to create better linkages between education and employment, especially in ensuring the skills and competencies of graduates meet the changing demands of the labour market.
 
Most would agree that reconciling the current mismatch between jobseekers and employers could only be a good thing. However, the Green Party have criticised the strategy for having “a single minded focus on economic outcomes … out of step with the real issues facing New Zealand”.
 
But can government policy ever afford not to be economic? Given that tertiary education is currently subsidised by the government, aversion to waste should be a priority. And for tertiary education in particular, government funding is significant. In fact, the forecast government expenditure on tertiary education in 2014, with the inclusion of student support, is $4.15 billion.
 
The Tertiary Education Union has also criticised the strategy, as it “…sees tertiary education’s main role as simply providing a free, publicly trained workforce and free publicly funded research to private businesses.”
 
However, the accusation that only private businesses benefit from a skilled labour force ignores the extrinsic value to society, in the form of greater productivity, increased economic growth, and less dependence on the state. These gains are not just enjoyed by the employer, but can lift the wellbeing of the wider population.
 
And, of course, reconciling the supply of graduates with the demand of employers is not just economic. It also plays a role in addressing one of the most salient issues facing New Zealand today: that of income inequality and unemployment.
 
I have previously written on the importance of tertiary institutions fostering a skilled workforce, not only to meet the demands of employers, but to ensure all people are able to participate in the future labour force.
 
Higher education has long been considered a means of increasing social mobility and reducing income inequality. In fact, in a 2009 Statistics New Zealand study, the median earnings of bachelor's degree graduates were about 40 per cent higher than non-degree holders, three years after graduating. In the future, it is likely that the increased demand for skilled labour will only exacerbate inequality between skilled and unskilled workers.
 
Everyone should have the opportunity to develop their human capital, participate competitively in the workforce, and better their lot through higher education.
 
The relationship between tertiary education and the labour market is not simply a matter of economics. It is a matter of giving individuals a sense of pride, purpose, and self-worth through meaningful, well-paid employment.