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The Economic Impact of City School Mohawk College Foundation April 2020


The Economic Impact of City School

Table of Contents Foreword by Craig Alexander

2

Setting the scene: The macroeconomic context of City School

4

The economic impacts of City School

10

City School reduces barriers to postsecondary education

11

City School helps to mitigate the skills gap

15

City School promotes stronger, healthier, and more resilient communities

17

A step in the right direction for people and businesses

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The Economic Impact of City School

Foreword by Craig Alexander Craig Alexander is the Chief Economist of Deloitte Canada

In many ways, Hamilton is an economic rock star among Canadian municipalities. I grew up in the region watching the transformation of the city from a steel town (“The Hammer”) to a more diversified advanced economy with heavy concentration in health care and education. This evolution was far from easy and smooth. Indeed, it transformed the local labour market, fundamentally altering the skills that employers required. This new, modern, advanced economy has done very well in recent years. The pace of overall economic growth has been solid, and better than many other regions. The success of the local residents has contributed to strong real estate markets over the past decade. Hamiltonians should feel good about their economic success. Yet, the favourable headline statistics mask unfortunate underlying trends. While the city’s economy is on a positive trajectory overall, the rising tide is not lifting all boats. Consistent with national trends, women, visible minorities, disabled workers, youths, immigrants, and Indigenous Peoples often have less opportunities and lower incomes. A portion of the workforce that historically worked within the traditional manufacturing sector is struggling to find employment. Often those being left behind lack the skills that employers are looking for. Overlaying these trends, residents of the Lower City neighbourhoods tend to be less educated, less employed, and more impoverished, especially relative to those in Ancaster, Dundas, and Flamborough. The Spectator’s “Code Red” revealed a shocking 23 year gap in life expectancy between the best and worst performing Hamilton neighbourhoods. Through its “Economic Development Action Plan - 2016-2025”, the City of Hamilton declared an ambition to “be the best place to raise a child and age successfully.” 1 To ensure this goal is actualized across the whole city, the populations that are struggling will need better outcomes in education, skills development, labour force participation, and employment. This is no small challenge. To improve education outcomes, the skills that are in demand must be identified, the population segments that are most in need must be engaged, and a platform for accessible educational opportunities must be provided. It was within this context that Deloitte was retained by the Mohawk College Foundation to conduct an economic analysis and ultimately produce this report – “Economic Impact Study of City School”. With a broad lens, this study explores the economic contributions of the City School program as it relates to students, businesses, and communities. City School is an initiative created out of Mohawk College’s belief in the importance of expanding access to postsecondary education. First launched in the fall semester of 2015, with for-credit courses first offered in the winter semester of 2016, the program delivers tuition-free courses and workshops to residents in Hamilton. Importantly, City School represents a demand-led educational initiative, an approach that centers on identifying employer needs and, thereafter, designing courses that align to employer needs. Through teaching skills that are in demand, City School aims to ensure that graduates achieve good employment opportunities after completing their course.

1

The City of Hamilton. “Economic Development Action Plan - 2016-2025,” 2016.

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The Economic Impact of City School

In our analysis, we find that City School is a bridge to education and employment opportunities and, by virtue of this, it generates a meaningful array of economic and social impacts: •

City School reduces barriers to postsecondary education: Through offering tuition-free courses, in neighbourhood-based classroom locations, with an emphasis on low-income and underserved community needs, City School removes barriers to postsecondary opportunities. The barriers City School helps students overcome may be material (e.g., cost) or non-material (e.g., self-confidence).

City School mitigates the skills gap challenge: Hamilton, like many places in Canada, faces a skills gap challenge. Through connecting unemployed and underemployed individuals in the community with labour-market driven, employer informed programming, City School has mitigated the skills gap challenge for its students and Hamilton businesses.

City School creates stronger, healthier, and more resilient communities: By providing educational programs and workshops to underserved and marginalized populations, City School equitably promotes greater well-being and quality of life among its students and in turn stronger, healthier, and more resilient communities within Hamilton.

This study was primarily informed through three key data sources: (1) the Graduate Survey, which collected data from former students, (2) the Business Survey, which collected data from Hamilton businesses that partnered with City School, and (3) Stakeholder Consultations, which refer to seven in-person interviews Deloitte conducted with Hamilton businesses, non-profit organizations, and government officials. For the purposes of confidentiality, the survey respondents and stakeholders have been anonymized. Unlike traditional economic impact assessments, this report does not illustrate the static GDP, labour income, employment, and government tax revenue impacts generated by City School. While the program generates quantifiable impacts (e.g., for the 2019/2020 academic year, Mohawk College and its partners invested approximately $1,200,000 in City School) it is still operating at an early-stage scale. To date, 496 unique students have graduated. Given the current size, it would be challenging and not very meaningful to estimate the program’s static economic contribution. In order to reveal the true impact of City School, this study looks beneath headline economic numbers, such as GDP, and explores the program’s impact on individual participants and businesses. Through this exercise the data is clear that City School helps to reduce barriers to education, mitigate the skills gap challenge, and create stronger, healthier, and more resilient communities. Based on our analysis, an expanded use of education programs aligned with the needs of employers and could help achieve more inclusive and sustainable economic growth to the benefit of living standards.

Craig Alexander Chief Economist at Deloitte Canada

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The Economic Impact of City School

Setting the scene: The macroeconomic context of City School City School does not generate impact in a vacuum. The program creates a contribution by fostering positive economic outcomes or arresting negative economic developments. Within this context, the following chapter provides an overview of the key macro forces that are relevant to City School and its economic contribution. This background information sets the backdrop and will act as an important reference point for this report. Amidst an economic transition period, Canada faces a skills mismatch challenge

Figure 2: Unemployment rate in Canada, 1993 to 2019 12.0%

2019

2017

2015

2013

2011

2009

2007

100

2005

0.0% 2003

125

2001

4.0%

1993

150

1999

8.0%

1997

Figure 1: Employment in Canada’s goods producing sectors and services producing sectors, indexed 2001 = 100

Amidst this transition period, Canada is experiencing historically low unemployment rates. Still, many workers across the country are finding it challenging to find opportunities. Canada is experiencing rising income inequality. Non-traditional employment (e.g., contract, part time, etc.) is rising as a share of employment. Wage growth has been modest, particularly for middle skilled workers.

1995

Canada’s economy has transformed in recent decades, due to the tectonic forces of globalization and technical change. Low labour costs in global markets (e.g., Asia) and the advent of improved machinery and equipment have replaced the activities of many low and middle skilled workers. This shift impacted Canada’s traditional manufacturing sector, which has fallen as a share of economic output. It also provided tailwind to a broader economic transition, in which Canada’s economy has become more oriented towards advanced manufacturing and high-value-added services.

75

Goods-producing sector

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

50

Services-producing sector

Source: Statistics Canada; Deloitte Analysis

Source: Statistics Canada; Deloitte Analysis

Additionally, while there are many underutilized workers, firms complain about difficulty finding employees with the skills they need. The implication is that there is a skills mismatch - workers without jobs and jobs without workers. To achieve better employment opportunities, many Canadians need skills that are in demand by employers. 4


The Economic Impact of City School

Hamilton embodies broader Canadian trends Similar to Canada as a whole, Hamilton is experiencing an economic transformation. The city is home to a prominent steel production sector. Yet, the data illustrates that the local economy has become less reliant on traditional manufacturing and more diversified. Once defined as a “steel town”, the city has developed an array of advanced manufacturing and services industries, from food production to health care, professional services, and educational services. It has also become increasingly integrated in the ‘Golden Horseshoe’, with many residents travelling to high-value-add occupations in nearby urban areas, such as Toronto, but retaining their incomes within the local Hamilton economy. Figure 3: Employment in Canada’s goods producing sectors and services producing sectors, indexed 2001 = 100 175 150 125 100 75 50

Lower City neighbourhoods are struggling to keep up with Hamilton’s economic transformation Within Hamilton, there are groups that do not experience an equal share of the city’s growth. Consistent with broader Canadian issues, women, visible minorities, disabled workers, youths, immigrants, and Indigenous People tend to have less opportunities and lower incomes. Additionally, a portion of the workforce that historically worked within the traditional manufacturing sector is struggling to find employment in the city’s emerging sectors. Figure 5: Median income of women, Indigenous Peoples, Immigrants, and Visible Minorities compared to the Median Income of Hamilton ($35,319). Note, data represents the year 2016 (most recent available) and all $ values are presented in CAD.

Women

-$5,447

Indigenous Peoples

-$5,551

Health Care and Social Assistance

Services Producing Sectors

Goods Producing Sectors

Manufacturing

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

Immigrants

-$9,793

Visible Minority

-$10,903

-$12,000

-$6,000

$0

Source: Statistics Canada; Deloitte Analysis

Source: Statistics Canada; Deloitte Analysis

Hamilton’s transformation has supported solid economic conditions. In recent years GDP growth has been strong, with an average of 3.0% growth from 2016 to 2018, which is well above the national and the Ontario average, while the regional unemployment rate has been low. However, these favourable headline statistics mask unfortunate underlying trends. While the city’s economy is on a positive trajectory overall, certain segments of the population are being left behind. Figure 4: Employment in Canada’s goods producing sectors and services producing sectors, indexed 2001 = 100

Overlaying these trends, residents of the Lower City neighbourhoods are struggling. They tend to be less educated, less employed, and more impoverished, especially relative to those in Ancaster, Dundas, and Flamborough. Figure 6: Median income levels in select Hamilton neighbourhoods. Note, data represents the year 2016 (most recent available) and all $ values are presented in CAD.

$27,674

$32,859

$38,583

$44,246

8.0% 6.0% 4.0%

Hamilton Lower City

Hamilton Mountain

Stoney Creek

2.0%

Ancaster, Dundas, Flamborough

Source: Statistics Canada; Deloitte Analysis

Source: Statistics Canada; Deloitte Analysis

2019

2018

2017

2016

2015

2014

2013

2012

0.0%

The challenges experienced within Lower City areas are well documented. As a notable example, the Hamilton Spectator’s “Code Red” (2010) explored discrepancies in health, social, and economic metrics across the city’s

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The Economic Impact of City School

neighbourhoods. The analysis revealed several troubling findings, such as:

A broader labour force will lift up communities and enhance Hamilton businesses

The gap in lifespan between the highest and lowest Hamilton neighbourhoods was a shocking 21 years. 2

A Hamilton neighbourhood in Lower Hamilton experienced 1,291 emergency room visits per 1,000 people. Meanwhile, a Hamilton neighbourhood in Flamborough experienced 97 emergency room visits per 1,000 people.

Nearly 70% of children lived below the poverty line in the neighbourhood defined by James Street North, Cannon Street East, Wellington Avenue North, and King Street East. In contrast, there were seven neighbourhoods in Hamilton where no of children lived below the poverty line. 3

Through its “Economic Development Action Plan - 20162025”, the City of Hamilton declared an ambition to “be the best place to raise a child and age successfully.” 5 To ensure this goal is actualized across the whole city, populations that face economic challenges will need better outcomes in education, skills development, labour force participation, and employment. These objectives would help to catalyze positive health and social outcomes, reverse the trends identified in “Code Red”, and ultimately support the City of Hamilton’s goal.

In a recent update of the analysis (February 2019), the Spectator found that “in most cases, the situation has worsened.” Indeed, the gap in lifespan between the highest and lower Hamilton neighbourhoods grew to 23 years. 4

2 3

The Hamilton Spectator. “Code Red: Ten Years Later,” February 21, 2019. Buist, Steve. “Worlds Apart.” The Hamilton Spectator, August 25, 2010.

Additionally, the overall economy would benefit from a larger labour force and more-skilled workers. While Hamilton is performing well, it has not reached its full potential. Consistent with national trends, a common complaint among the city’s businesses is that they have difficulty accessing qualified workers - a challenge which relates to the skills mismatch challenge experienced across Canada. Broadening opportunities to education, skills development, and employment will not only serve populations that have been left behind. It will also enhance the ability of local businesses to find and retain talent as well as create economic growth.

4 5

Buist, Steve. “’A Five-Alarm Fire’.” The Hamilton Spectator, February 21, 2019. The City of Hamilton. “Economic Development Action Plan - 2016-2025,” 2016.

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The Economic Impact of City School

City School as a bridge to opportunity To generate better outcomes in education and employment, the skills that are in demand should be identified, the population segments that are most in need should be engaged, and a platform for accessible educational opportunities should be provided. Within this context, City School represents a conduit that coordinates various local organizations to meet these requirements. Through leading these stakeholders, City School makes it possible for students to progress to further education and employment. Accordingly, the program can be understood as a bridge to opportunity.

City School delivers tuition-free educational programming City School is an initiative created out of Mohawk College’s belief in expanding access to postsecondary education. First launched in fall semester of 2015, with for-credit courses first offered in the winter semester of 2016, the program delivers tuition-free courses and workshops to residents in Hamilton. The parameters for admission to City School are broad. Anyone 19 years or older and not enrolled in a postsecondary program is permitted entry. This said, priority is provided to individuals with little or nopostsecondary experience. Once enrolled in City School, participants can earn up to two college credits, which can then apply to college programs at Mohawk. Each semester offers an array of subjects, from Horticulture and Landscaping to Child Development and Behavior. There are also broad, entrylevel ‘College 101’ courses, designed to help participants develop core skills that are required in college. For many participants, City School is first-time experience with college Between winter semester 2016 and spring semester 2020, City School has enrolled 680 unique students, 496 of whom completed their course (73%). The program has grown each year in operation, with 233 unique

completions taking place in the 2018/2019 academic year. Many City School participants did not have prior experience with college before entering in the program. Of the students that enrolled, 51% have a high school diploma or less education. For these students, City School is a first-time experience pursuing higher education and skills training (outside of a formal workplace). Overlaying this trend, 68% of City School students are residents of Hamilton’s Lower City Neighbourhood. Figure 7: Breakdown of City School participants, by Hamilton CMA neighbourhood 68%

1%

1%

Stoney Creek

Ancaster, Dundas, Flamborough

14%

15%

Hamilton Mountain

Other

Hamilton Lower City

Source: Statistics Canada; Deloitte Analysis

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The Economic Impact of City School

Mohawk College’s CCPEL leads multiple local stakeholders in delivering City School The delivery of City School is led by Mohawk College’s Centre for Community Partnerships and Experiential Learning (CCPEL), which dedicates investment, people, and time to run the program. To host courses for the 2019/2020 semesters, this included expenditures of approximately $1,200,000 dollars, with 51% of costs covered via transfers from Mohawk College and the remaining 49% covered via grants. The College’s CCPEL staff conduct background research, engage in fundraising, and, importantly, coordinate with various local stakeholders, who also help to deliver the program. Indeed, City School is delivered as a partnership that spans several key stakeholders.

City School receives significant funding by Mohawk College, and Mohawk College’s CCPEL lead the operations and delivery of City School courses. Hamilton Community Leaders Hamilton Community leaders include senior leadership teams from various local education institutions, executive directors from non-profit organizations, and senior members of publications, among others. The City School team engages local community leaders, especially those working in Lower City Hamilton, to identify the needs of potential City School students and expand opportunities to participate. Ontario Works

Figure 8: Mohawk College’s City School is delivered through the collaboration of various local stakeholders.

Ontario Works delivers temporary financial assistance for basic needs and shelter, and the provision of mandatory and discretionary benefits, employment related benefits and emergency assistance to eligible individuals and households in Hamilton. The City School team partners with Ontario Works to support individuals on social assistance programming to receive training and workplace experience. Community Locations In the context of City School, community locations includes the Eva Rothwell Centre, a community centre located in Lower City Hamilton that partners with families living in poverty and strives to empower them to become self-sufficient, and the Hamilton Public Library, which aims to provide the communities it serves with “freedom to discover.” 6

Source: Deloitte Analysis

Mohawk College and the City School Team Mohawk College is fully accredited and funded by the Ontario Ministry of Colleges and Universities and is a member of Colleges and Institutes Canada (CICan). Mohawk College offers over 160 programs and serves over 30,000 students annually. Under Mohawk College, the City School team works with donors, and the college’s students, faculty and staff to create a growing range of scholarships and bursaries. The City School team also supports the college’s critical partnerships and capital campaigns.

6

The City School team partners with community locations so that City School programming can be delivered in locations that suit its students and, therefore, encourage participation. Local Hamilton Businesses In the context of City School, local Hamilton businesses broadly refer to small, medium, and large firms that operate in various sectors across the city. The City School team engages these businesses to determine employer needs and, thereafter, design courses that teach employable skills. Additionally, local Hamilton businesses participate in providing students with informational sessions on careers within their respective industries.

Hamilton Public Library. “About HPL,” 2020.

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The Economic Impact of City School

City School is a demand-led education initiative By virtue of the Mohawk College’s engagement with local Hamilton businesses, City School can be understood as a demand-led education initiative. This approach centers on (i) identifying employer needs and (ii) designing educational programming that align to employer needs. Through teaching skills that are in demand, these initiatives aim to ensure that graduates achieve good employment opportunities after completing their course. In principle, demand-led education is a model that serves the mitigate Canada’s skills gap challenge. It explicitly addresses the complaints among businesses that they cannot find employees by teaching potential workers – whom may not be able to find jobs – with the skills that are in-demand. Pillars of City’s School’s bridge to education and employment opportunities The Mohawk College and its partners approach to deliver demand-led education can be broken down into three key pillars. Through these pillars, City School creates a bridge to education and employment opportunities and generates a meaningful array of economic and social impacts. Figure 9: City School as a bridge to opportunity

Source: Deloitte Analysis

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The Economic Impact of City School

The economic impacts of City School As a bridge to education and employment opportunities, City School generates significant economic and social impacts. These impacts can be understood through three key themes: • City School reduces barriers to postsecondary education; • City School helps to mitigate the skills gap; and • City School creates stronger, healthier and more resilient communities.

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The Economic Impact of City School

City School reduces barriers to postsecondary education Through offering tuition-free courses, with an emphasis on low-income and underserved community needs, City School reduces barriers to postsecondary opportunities. The barriers City School helps students overcome may be material (e.g., cost) or non-material (e.g., selfconfidence). There is room to improve educational outcomes in Hamilton Canada is among the most educated countries in the world. Out of the 36 developed countries that make up the Organization for Economic Co-Operation and Development (OECD), Canada ranks first in percentage of adults with a postsecondary degree (56.7%). 7,8,9

Lower City Hamiltonians face material and nonmaterial barriers to education

Figure 10: Percentage of population ages 25-64 with a postsecondary degree, across select OECD countries

Within Hamilton, certain segments of the population are subject to material and non-material barriers to education.

60%

Israel

Canada

Ireland

United States

Finland

Sweden

Switzerland

Estonia

Lithuania

OECD -…

New Zealand

Latvia

France

Greece

Germany

Slovak…

Portugal

Colombia

Mexico

Turkey

South Africa

30% 0%

a high school diploma, while 10.3% (~41,000 people) do not have the completion of post secondary education. This segment of the population finds it challenging to secure work. 10 The most recent data illustrates that the unemployment rate for people without any degree was 11.7%, more than double those with college or university degrees (4.9%).

Source: OECD; Deloitte Analysis

Within Hamilton, the percentage of adults with a postsecondary education is even higher, at 65% (~256,000 people). This result is in line with the industry transformation of the city. Jobs in health care, educational services, and professional services commonly require a postsecondary degree. Yet still, the data also illustrates that 35.3% of Hamilton adults (~14,000 people) do not have a degree above

7 Invest in Ontario. “Canada ranked OECD’s most educated country,” November 22, 2018. 8 Education outcomes are even stronger within Ontario. Within the province, 69% of adults have a postsecondary education. (Statistics Canada. “Education in Canada: Key results from the 2016 Census,” 2017.)

The key material barriers to education are tuition fees and expenses, limited knowledge about financial aid, and the costs and risks associated with leaving a paying job to attending college or university. The non-material barriers to education are more complex. They relate to issues of self-confidence and whether potential students are raised to value higher education. Both material and non-material barriers to education disproportionately impact low income populations. These segments of Hamilton have less resources for academic costs and taking time off work. Meanwhile, officials of Mohawk College have observed that the non-material barriers to education are more prevalent within low income families. Their hypothesis – which has been evidenced in various academic studies – is that parents in low income families tend to be less educated, and, as such, often do not fully appreciate the benefit of higher In this report, adult populations are categorized as those aged 25-64. This helps mitigate the overestimation or underestimation of statistics that may happen when school-aged populations or retired populations are included in aggregation. 10 These figures are comparative with neighbouring Kitchener-Waterloo-Cambridge region, where 31,420 (11.1%) of adults do not have a degree and 73,415 (26.0%) of adults do not have a degree above their high school diplomas. 9

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The Economic Impact of City School

education, which impacts the likelihood of children going on the higher education themselves. 11

City School addresses material barriers to education

As reported above, many of Hamilton’s low income families are concentrated in the Lower City neighbourhoods. In these areas of the city, the median income is approximately $26,674, which is roughly $8,000 below the median income across all of Hamilton.

By providing tuition-free higher education courses with an easy application process, City School mitigates material barriers to education.

Additionally, postsecondary education attainment is relatively low among residents of Lower City Hamilton, as compared to the rest of the city. This suggests that these neighbourhoods represent an environment in which nonmaterial barriers to education can manifest. Figure 11: Select population segments of Hamilton, by education level

The data illustrates that, from an income perspective, City School addresses low income individuals. The Graduate Survey shows that the 55% of students were from households with an annual income of $30,000 or less. Several respondents highlighted that City School’s cost-free structure was a key factor that influenced their enrollment. These sentiments, along with the low income profile of students, collectively suggest that City School has been successful in helping Hamiltonians overcome material barriers to education.

50% Figure 12: Breakdown of household income among Graduate Survey sample of City School students

30%

Less than $20,000

10% -10%

No certificate, diploma High School diploma or degree

Hamilton, all

Undergraduate degree College diploma; or above Apprenticeship diploma; or University certificate below bachelor level

Hamilton, lower city neighbourhoods

City School Students

Source: Statistics Canada; Mohawk College Foundation; Deloitte Analysis

$20,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $69,999 $70,000 - $99,999 Over $100,000 0%

10%

20%

30%

40%

Source: Graduate Survey; Deloitte Analysis

City School addresses non-material barriers to education Importantly, City School also helps students build the self-efficacy and experience needed to pursue higher education. Prior to attending City School, 69% of participants had a high school diploma or no diploma at all (as reported above, across all of Hamilton this percentage is 35%). Several respondents say that City School provided them with a first success in postsecondary education and helped them build confidence in their ability to develop new skills. Table 1 outlines the experiences of a sample of City School participants who document City School’s level of support and impact on their confidence.

11 For example, a Statistics Canada article (Turcotte, M. 2015. “Intergenerational education mobility: University completion in relation to parents’ education level” Canadian Social Trends. Statistics Canada Catalogue no. 11-008-X.) of postsecondary students from lower income families found that those whose parents held a university

degree were much more likely to have always known that they wanted to continue their studies after high school (about 50%, compared with 31% for those whose parents had only a high school diploma).11

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The Economic Impact of City School

Table 1: Graduate Survey responses, as they relate to reducing barriers to education

I found City School to be an overwhelmingly fabulous experience. It was a self-confidence and esteem booster, it changed my life in ways I didn’t even know it was needing

01 02

03 04 Source: Graduate Survey

‘City School’ was so incredible, I learned a lot and felt really supported and lucky to be able to participate.

The education I received ‘from City School’ was fantastic. I feel others could benefit by the confidence gained from the accomplishment of completing a course. ’City School’ is one of the most helpful things in Hamilton… ‘Many’ of my friends don't think they will ever make it so I've already been handing out magnets and papers to people ‘on City School.’ ‘I want to’ help ‘people’ realize their full potential… I thank ‘City School’ for ‘doing so’ as well

Supporting students in taking the leap Through mitigating material and non-material barriers to entry, City School develops interest and confidence among students to pursue even further education. The Graduate Survey illustrated that City School enabled participants to explore a given subject and test whether they wanted to pursue college before making a firm commitment. Other students said that the program was excellent for older adults who seek to upgrade their skills before registering for full-time studies. Table 2: Graduate Survey responses, as they relate to reducing barriers to education

I found ‘City School’ to be a good, affordable way to bridge into PostSecondary education. I didn't have the funds to just "jump in". City School also helped me prepare mentally, making me less afraid of failure. ’City School’ allowed me to explore a field I wanted to work in, before ‘deciding’ to attend Mohawk College ‘full-time’.

City School is an excellent ‘opportunity’ for adults ‘who’ have been out of school to upgrade ‘their’ skills before registering for full time studies.

’City School is’ a great opportunity to challenge yourself and a great trial run before committing or spending money.

01 02

03 04

Source: Graduate Survey

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The Economic Impact of City School

It is important to note that City School does not completely resolve material and non-material barriers to education. There are likely potential students that are without the know-how to apply even to a free program. Or, once enrolled, some students are not willing to continue, perhaps a result of any number of factors, such as low self-esteem. Yet, the Graduate Survey is clear that, overall, City School creates an opportunity for low income Hamiltonians to try college in a cost-free and encouraging environment. As the result, there are students that developed the skills and confidence to pursue a full time college education. Of the sample of students captured by the Graduate Survey, 90% report that City School increased their interest in pursuing further education. While City School does not operate at a large scale, this outcome is positive in terms of improving educational outcomes in Hamilton.

90%

90% of respondents to the Graduate Survey report that City School increased their interest in pursuing further education

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The Economic Impact of City School

City School helps to mitigate the skills gap Hamilton, like many places in Canada, faces a skills gap challenge. Businesses are finding it difficult to find skilled employees, while unemployed and underemployed workers are finding it difficult to secure jobs. Although the program is still in its early stages, City School has mitigated the skills gap challenge for its students and Hamilton businesses. A call to mitigate the skills gap challenge As reported above, Hamilton faces a skills mismatch challenge. Businesses are finding it difficult to find skilled employees, while workers are finding it difficult to secure employment. Given this dynamic, there is a need to expand the skillsets of Canadian workers so that they align to the requirements of job vacancies.

report that the program connected them with employers following graduation. The Graduate Survey also illustrates that one in four students find a job directly related to their City School education and, when this match is made, the jobs tend to be associated with higher incomes.

Evidence of the skills gap challenge was found in both the Business Survey and the Graduate Survey. Within the former, 86% of Hamilton businesses identify that some form of technical or special skill is required to fill vacant positions in their organization, and 69% of these firms report difficulty in filling employment vacancies. At the same time, within the Graduate Survey, 50% of students were unemployed or only secured part-time jobs. Collectively, these statistics suggest a need for skills development and better matching between prospective workers and employment opportunities.

Mitigating the skills gap for Hamilton businesses

City School answers the market call While operating at a small scale (i.e., 496 unique graduates to date), City School helps to mitigate the skills gap challenge in Hamilton. Given that the program is still in its early stages, this support cannot be observed within the macroeconomic data. Yet, for its student population, City School helps to provide skills and connections with employment opportunities. Additionally, for Hamilton businesses, City School represents a source of labour capable to fill job vacancies.

Ultimately, it is highly challenging for City School to facilitate employment for all of its participants. This is because a lack of skills is not the only barrier to good jobs. In the Stakeholder Consultations, Hamilton businesses also identified language and material costs (e.g., having a car) as reasons why they could not hire more City School graduates. To achieve 100% employment directly related to their education – these challenges will need to be addressed.

Within the Business Survey data, over 60% of respondents reported that City School had a positive impact on business growth and the ability to address labour shortages. Additionally, over half of firms surveyed indicated that the program improved the diversity of their workforce and improved the quality of their workforce. In a Stakeholder Consultation, one business said that City School gave them the opportunity to access communities and individuals whom may not have known to apply to their job vacancies. They added that their involvement with the program prompted them to initiate their own training program so that they can upskill their existing workers.

Mitigating the skills gap for City School students According to the Graduate Survey, 92% of City School participants report that their knowledge and skills have improved as a result of their coursework, and 62% 15


The Economic Impact of City School

Addressing the skills gap challenge mitigates fiscal pressure

A step in the right direction for people and businesses

While still operating at a small scale, City School’s support in mitigating the skills gap challenge provides relief to government spending. Among the respondents to the Graduate Survey, 56% of students were reliant on Ontario Works support prior to the program, while 42% were reliant on Ontario Works support following graduation. Through City School, these participants need less social assistance from the government and move into jobs that generate tax revenue, thereby providing fiscal relief.

The skills gap challenge hurts both workers and businesses. To date, City School has graduated 496 students, which will not create a macroeconomic impact in a city the size of Hamilton. Yet, the data is clear that the program represents a model that can help to mitigate the challenge.

Figure 13: Percentage of Graduate Survey respondents reliant on Ontario Works Support

As one respondent to the Business Survey writes, “City School is a step in the right direction.” Another adds that the program helps to ensure “the slack in the labour supply is being used,” representing the idea that unemployed or underemployed Hamiltonians can find a good job through City School.

56% 42%

Prior to City School

After City School

Source: Graduate Survey; Deloitte Analysis

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The Economic Impact of City School

City School promotes stronger, healthier, and more resilient communities City School promotes greater well-being and quality of life among its students and stronger, healthier, and more resilient communities within Hamilton. Helping to reverse the trends revealed by “Code Red” It is well documented that families facing economic challenges, such as unemployment and poverty, also experience social challenges. This association is core to the revelations of “Code Red”. Residents of Lower City Hamilton tend to struggle financially and in terms of social outcomes, such as health, housing, and ability to support their children, among others. As reported in the chapters above, City School helps to generate positive economic outcomes for its students, by removing barriers to education, enhancing their employment opportunities, and, in some cases, alleviating dependency on social assistance programs. Building on these insights, the data also shows that, by second order, City School also generates positive social outcomes for its students. Promoting well-being and quality of life among students Figure 14: Sentiments of Graduate Survey sample of City School students

I would recommend City School to friends and colleagues

97%

City School has increased my interest in pursuing education

90% 80%

City School has increased my overall wellbeing City School has improved my quality of life I feel more fulfilled in my job as a result of City School City School has increased my ability to support my family

73% 68% 60%

Source: Graduate Survey; Deloitte Analysis

The Graduate Survey illustrates that the vast majority of respondents report higher levels of well-being, quality of life, job fulfillment, and ability to support their families since participating in City School. These results are especially notable given that typically City School students come from difficult economic and social circumstances. City School makes a meaningful and

positive impact on the lives of those who face the deepest challenges. This data is consistent with the viewpoints of Hamilton leaders in private business, non-profits, and government. Through the Stakeholder Interviews, they report that positive education outcomes is a critical first step in achieving stronger, healthier, and more resilient communities. As one stakeholder explained, “City School is one of the strongest pathways to remove individuals or families from low-income and poverty existence, and elevate their social well-being.” Elevating Hamilton communities Building on its contribution to individual students, City School has potential to elevate families and communities. A key predictor of a child’s educational attainment is the education level of their parents. Through expanding access to college courses, City School can play a role in promoting higher education within the families of its students. While this is not an exact measurement of parenthood, 51% of Graduate Survey respondents live in households with children under the age of 15, creating scope for participants to influence the next generation. Additionally, data from a sample of City School participants indicates that over 90% of City School participants have an interest in pursuing further education as a result of their involvement with City School and almost 97% of City School participants indicate that they would recommend City School to friends or colleagues. Overall the benefits of City School involvement extend beyond the individual participants. Equipped with new skills, new confidence, and new employment opportunities, past students may inspire future generations or their fellow community members, creating a positive multiplier effect.

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The Economic Impact of City School

A step in the right direction for people and businesses Hamilton has excelled in the face of global competition and disruption to its traditional industries. The rise of its advanced manufacturing and service sectors has led to a strong economic growth and low unemployment. But, not all have been lifted by the overall strong performance. Moving forward, Hamilton will need to address its challenges with economic inequalities, which can be achieved through expanding access to education, skills development, and employment. Tackling these areas will not only benefit impoverished population segments, but it will also elevate Hamilton businesses, who require skilled workers to compete. As a bridge to education and employment opportunities, City School represents a step in the right direction. It shows the benefits to employment- and demand-driven education. While it is still in its early stages, the data is clear that the program reduces barriers to education, mitigates the skills gap challenge, and promotes stronger, healthier, and more resilient communities.

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