Idea: Jobs for graduates

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theleftyinvestor
Idea: Jobs for graduates

An idea occurred to me. I've posted it under "Labour" as it's the closest relevant category other than politics.

I was having a chat with a fellow former graduate student and we were talking about how academia often doesn't give students an opportunity to discover what they can do if they don't stay in academia. So we finish postgrad education and then end up at square one in the job market, anywhere from 25-40 years old having never really held down a full-time job.

I am now employed full-time, but a few things stood out to me during the months that I was making use of career counselling:

- A great number of students, especially postgrads, have a significant accumulated balance of education tax credits, since the combination of basic personal amounts and the tax treatment of academic income often adds up to years of very little taxable income against which to deduct the credits.

- I was unable to benefit to a significant degree from these credits until I finally got a full-time job that put me above the Basic Personal Amount. During my first year of employment I have been able to claim the credits on my T1, and reduce the tax withheld at source to a very small percentage.

- I happen to have graduated debt-free, but I recognize that this is not entirely a consequence of my own actions and capabilities. Many of my peers, in the same stage of life and education, were heavily indebted by the time they earned their degrees. Isn't it a bit perverse that these education amounts are dollars out of reach for debt-laden graduates who are not earning enough money to pay significant amounts of taxes?

- Most students, unless they were receiving a considerable number of hours of non-tax-exempt employment income, are ineligible for EI upon graduation. Also, the lion's share of public programs for connecting employers with workers are managed under the EI system for eligible recipients only. These programs include the Targeted Wage Subsidy, the Skills Development program to provide concrete skills training, the Self-Employment program, and Job Creation Partnerships.

So here is my proposal. It's pretty close to revenue-neutral, yet it would allow a massive expansion of programs that would link workers with employers.

1) Allow graduates trade in their accumulated but unused tuition and education tax credits, in exchange for eligibility to work programs that would normally only be funded for EI recipients. This is not to take away opportunities from other EI recipients - because the cash used to fund their entry comes from the tax credits the government won't need to pay out anymore. 

Example: Susan has $10,000 in accumulated tuition and education credits. It will take two calendar years from the time she starts the modestly paid job it took her eight months of interviews to find, for her to see all the value of those credits come back to her wallet. Or, under the trade-in proposal, her credits are traded in for eligibility to the Targeted Wage Subsidy program which gives an employer incentive to hire her by topping up her wage. As a result she finds a job in only two months, and benefits not just from the value of the credits but from the paid months of work that she wouldn't have had without the TWS.

Okay, wait, there's still a problem here, and if I don't bring it up you will: What about students who worked insurable (hence taxable) hours throughout university and actually used up more of their education tax credits? Many of those students are the ones who had the most financial need. So it doesn't make sense to exclude them from opportunity (although, granted, this group often ends up more employable because they have better résumés upon graduation). Well...

2) Allow graduates to determine eligibility for EI-funded work programs based on a formula that takes into account all the EI-insurable hours they worked over the span of a degree *and* the education credit amounts accumulated. This may not add up perfectly in terms of revenue neutrality, but I think it's fair to say that getting people working sooner is good for the tax base, for the economy, and for future opportunity. Moreover the degree to which this expands the EI-funded programs could well net some significant savings in per-client administrative overhead, not to mention easing the burden on health care costs (income earners have the opportunity to treat their health better) and mainly provincial social services that unemployed Canadians make heavy use of.

Any thoughts? Is this something that could be coherently packaged into a policy/platform? I was thinking it might be worth pitching to some of the NDP critics - Boulerice (Labour), Charlton (HRSDC), Cleary (Post-Secondary Education), Nash (Finance) and Day (EI), not to mention my own MP Libby Davies. I'd propose it to the government themselves but they'd probably respond with something about a reckless carbon tax.

Regions: 
theleftyinvestor

Oops, I forgot the usual "best not to post everything in the top post" deal. Oh well :)