In Ontario, government funding for both colleges and universities has been declining since the 1970s, as a share of GDP and on an inflation-adjusted per-student basis (Mackenzie 2004: 1). Clark et al. (2009) note that total operating revenue for both colleges and universities fell by about one-third and about one-quarter, respectively, by the early 1980s as a result of declining government funding per FTE student in the 1970s coupled with the freeze in tuition fees during most of that period (81). Between 1970 and the mid-1980s, government grants per student were among the lowest of the provinces and regulated tuition fees were among the highest (Clark et al. 2009: 91).
Clark et al. (2009) state that provincial funding continued to decline in the 1990s. The provincial government reduced its funding to universities in absolute terms on two
occasions and did not increase its funding for colleges despite increasing enrolments during the early 1990s (81-82). Between the late 1980s and 2001-02, government support for postsecondary education fell from about 0.9 percent of the GDP to 0.55 percent (82). The proportionate loss was roughly the same for colleges and universities during this period (84). Clark et al. remark that government support did increase to about 0.7 percent of the GDP in 2007-08, but they argue that government funding for universities, adjusted for enrolments and inflation, has declined overall since the late 1980s (79, 82).
Since the late 1980s, undergraduate tuition fees in Ontario outpaced inflation by 509 percent and graduate tuition fees outpaced inflation by 724 percent (Canadian Federation of Students Ontario 2013). In the 1990s, the government allowed for significant increases in university tuition fees through deregulation (Clark et al. 2009: 81). Mackenzie (2004) notes that between 1990 and 2002, the share of tuition in university operating expenditures increased from 21 percent to 43 percent (12). As of 2013-14, tuition and fees represented 52 percent of universities’ total operating revenue (HEQCO 2015: 5). Since the late 1990s, college tuition fees in Ontario outpaced inflation by 378 percent (Canadian Federation of Students Ontario 2013). College tuition fees increased after 1993 but not at a rate comparable to the universities (Clark et al. 2009: 82). Between 1990 and 2002, the share of tuition in college operating expenditures increased from 17 percent to 31 percent (Mackenzie 2004: 12). These increases in tuition fees have been proportional to the decrease in government funding for postsecondary education (Canadian Federation of Students Ontario 2013). In 2006, a fully-funded tuition fee freeze was lifted by the provincial government under the Reaching Higher framework, which allowed undergraduate tuition fees to increase by five percent annually
on average from 2006 to 2011 (Canadian Federation of Students Ontario 2013). 3.4 Neoliberalism and Human Capital Theory
The economic recessions in the 1970s and early 1980s, combined with inadequate government funding, created financial difficulties for the postsecondary education system in Ontario. This situation was compounded by the federal government’s increasing reluctance from the 1980s onwards to provide transfers to the provinces for
postsecondary education. The reluctance on the part of the federal government is understandable, given the failure of Keynesian policies to ameliorate the crises and the subsequent influence of neoliberalism in Ottawa, as detailed above. Within this context, human capital theory along with globalization rhetoric rose to the fore, the latter
evidenced by Mulroney’s constant appeals to the need to cut deficits in order to be competitive in the global marketplace. However, as previously stated, I think the emergence of human capital theory in Ontario’s postsecondary education discourse can be more fruitfully explained by drawing connections between human capital theory and neoliberalism, both as discourse and as reality. The connections are not controversial: both human capital theory and neoliberal theory derive from neoclassical economics. Human capital theory was developed substantially by the work of economists in the Chicago School tradition, such as Gary Becker, Theodore Schultz, and Milton Friedman. It takes many assumptions from neoclassical economics, most importantly its assumption that human beings are rational, self-interested actors and that social phenomena can be explained by recourse to the individual behaviours of these utility maximizers.
Therefore, if human capital theory shares many assumptions with neoliberal theory, then the use of human capital theory in postsecondary education discourse can be
understood differently from the reigning conventional wisdom that postsecondary
institutions are valuable because they produce and distribute the human capital that keeps the global capitalist machine going. In light of neoliberalism as both discourse and as reality, human capital theory in postsecondary education discourse can instead be seen to serve other functions.
One function it serves is to justify decreases in government funding for social programs and services. As Schultz (1981) remarked, education should not be considered a form of welfare because it is an investment in human capital. Interestingly,
postsecondary education has been regarded as a means for shifting away from welfare state policies because it ostensibly provides the skills and knowledge individuals need to adapt to an unstable labour market. It follows that spending on programs like
Unemployment Insurance can be reduced by increasing postsecondary education participation rates.
With regard to postsecondary education itself, human capital theory could possibly be used to justify either increased government spending or decreased government spending. The former could plausibly be justified on the basis that the postsecondary education system confers tremendous economic benefits. However, it is slightly more complicated than that. Indeed, in many countries governments have
increased spending for their postsecondary education systems, but there is a tendency for that money to go towards capital infrastructure, research, and financial aid. What is a shared trend among many countries is the decline in government funding per student and an increase in tuition fees. Increasing tuition fees are justified on the basis that the rate of return for students’ investment in postsecondary education is greater than the costs
incurred.
This points to another function served by the presence of human capital theory in postsecondary education discourse: the justification of inequality. The notion of “equality of opportunity” intersects with postsecondary education in such a way that individuals who are unable to integrate into the labour market have only themselves to blame.
Because they are unable to integrate, they presumably lack the requisite human capital. If they do not decide to invest in postsecondary education in order to acquire the requisite human capital, then they are responsible for their circumstances, especially since these individuals presumably have the opportunity to pursue postsecondary education because both the federal and provincial governments provide financial aid, albeit in the form of loans more than grants. This line of reasoning corresponds to the neoclassical assumption that individuals get what they deserve.
The burden placed on individuals and their families to cover the costs of postsecondary education while the government withdraws is an example of the privatization of responsibility that is characteristic of the neoliberal period. While
personal and individual freedom in the marketplace is guaranteed, each individual is held responsible and accountable for his or her own actions and well-being (Harvey 2005: 65). This principle extends into areas such as welfare, education, health care, and pensions (Harvey 2005: 65). Individuals are expected to take responsibility for themselves and earn through the market to provide for their own needs (Armstrong 2010: 187). Individuals can no longer rely on the “nanny” state to take care of them (Armstrong 2010: 187). Armstrong (2010) points out that it is not only responsibility but also costs that are privatized in neoliberal strategies (196). This is evident in how human capital
theory is used in the discourse to justify shifting costs from governments to individuals via increasing tuition fees. Postsecondary education becomes framed as an investment because it is said to confer future economic benefits worth the initial costs. The intersection of postsecondary education with the idea of equality of opportunity is problematic, especially in the neoliberal period of increasing inequality.
Lastly, human capital theory reinforces the marketization of postsecondary education that has proceeded apace since the 1980s. The claims of human capital theory are enticing and are no doubt used to attract potential students to postsecondary
education. In a context of fiscal constraint, partly caused by reduced government funding, postsecondary institutions rely more on private sources of funding, such as tuition fees. Promising benefits to students, like increased likelihood of full-time employment and higher annual incomes, whether borne out in reality or not, may be a way to increase the number of students enrolled in the postsecondary education system. Additionally,
promising increased economic returns to society can also be a way of attracting taxpayer money for research carried out in postsecondary institutions, primarily universities.
This discussion has provided alternative explanations for why human capital theory emerged in Ontario’s postsecondary education discourse in the 1980s and why it has become the popular way of understanding the postsecondary education system’s role in society today. This chapter will serve as the context against which I will shortly compare the Ontario postsecondary education reviews and the results of my content analysis.