What happens to the 80% who failed O-level?

Ordinary ('O') level exam results are out, and the pass rate is a mere 20%. That means only 20% of the students who sat for the exam may proceed to the next academic level. What happens to the 80% that failed? And what happens to all the people who have failed 'O' levels in previous years? How are they faring in a country in which they're branded as failures, second class to those who pass the exams? Does the economy absorb them? Can they ever do as well as their more academically successful counterparts?

I would like to tackle these questions by taking an unusual angle to critique our education system. I will then suggest how it can be improved to meet the country's needs.

Education and the Economy
Education systems are designed for economic systems. Most people get educated in preparation for careers. Through these careers they become part of the economic system - as producers and consumers of commodities and services. Our education system is designed for one particular economic system - the free market economic system. In a free market system, the price of a commodity is determined by the amount of supply of and the demand for that commodity. When supply is high and demand is low, the price drops. For example, when there are too many mangoes compared to the number of people who want them, the price of mangoes drops. Labor also works the same way in the free market system. When there are too many people looking for the same jobs, the price of labor drops; that is, salaries drop.

As can be seen, labor is a just another commodity that gets sold in the free market. It is primarily produced by the education system for the economy, the education system being the supply and the economy representing the demand.

Let us look at the demand a little closely.

Demand
There are many ways to categorize demand. One way is to divide the economy into two sectors - the formal and the informal sectors. The formal sector is the side that is regulated by government. Businesses such as manufacturing companies, banks, law firms and shops are found in this sector. They pay various taxes to the government. The informal sector is the unregulated side of the economy. Business activity in this sector is driven by hawkers, cross-border traders, 'vendors,' 'piece job' hunters and the likes. These people do not pay any income tax to government.

Both of these sectors have a demand for labor. Where does the supply that meets this demand come from?

Formal Sector Supply
The formal sector is in need of skilled and unskilled labor. (Skilled laborers are workers who require special training in order to perform their jobs well, e.g. electricians and accountants. In my definition I am including professions such as doctors and lawyers). The education system, through institutions like universities, polytechnics and colleges, supplies the formal sector directly with skilled labor.

These skilled people all have one thing in common - they all passed their 'O' levels; that is, they come from the 20%. Even people who are trained through apprenticeships also come from the 20%. What this means is that the 20% that passed 'O' levels is the supply pool for the demand for skilled labor in the formal sector.

The education system also supplies the formal sector with unskilled labor, albeit indirectly. The rejects of the system - the 80% that failed - constitute the unskilled labor supply for the formal sector.

Because this 80% represents a lot of people, the number of unskilled people looking for jobs far exceeds the number of available jobs in the formal sector. This results in a two-fold problem. Firstly, the jobs are underpaid because there are too many people trying to fill in a few jobs. Secondly, many people wind up unemployed in the formal sector. As a result, they have to enter the informal sector.

Supply: Informal Sector
The informal sector has always been chiefly supplied by the unskilled people who come from the 80%. However, with less and less demand for even skilled labor in the formal sector, the informal sector supply has changed. People with university degrees and polytechnic diplomas now find themselves wallowing together with unskilled people in the informal sector.

Although I have talked about 'supply' for the informal sector, I have not talked about the demand. The informal sector has very few formal jobs (such as construction jobs for construction companies).

Otherwise, most people are self-employed. They run tiny business to stay afloat. Ironically, it's the 80% that winds up having to enterprise for survival - and they are least equipped for that task by our education system!

For me that is a significant problem. A large percentage of the population is condemned to a sector of the economy that is rife with unemployment and risky small businesses. To compound the problem, this group of people is also not well prepared for this sector because it is unskilled. It is also ill-equipped for entrepreneurship, something that its members need to better their lives.

A better economy?
One way to combat this problem is to improve the economy, so that more jobs are available for the unskilled people. This would be very desirable, but the problem of unskilled labor being undervalued will still remain. This is partly because of the perception that we as a country have of unskilled people - that they are lazy and dumb (this is not my personal opinion). The other reason is that there would still be too many unskilled people because 80% is a lot of people!

But then what if the pass rate went up, so that more people become skilled?

What if the pass rate goes up?
If the 'O' level pass rate goes up, the problem does not simply vanish. While increasing the pass rate is highly desirable, it doesn't solve what I consider to be the main problem: that our education system continues to condemn many people to underpaid jobs and to a risky informal sector. If we consider a realistic improved pass rate of 60-70%, it still leaves the 30-40% in a predicament. That is a lot of people to leave untrained!

The problem therefore goes beyond the poor 'O' level pass rate. It is with the whole education system that prepares only a fraction of its young citizens for gainful employment in the regulated sector of the economy, and neglects everyone else. It does not cater for 'failed' people. All this ought to change.

Failures of Our System
The government has a responsibility to equip its citizens for the future - a future in which those citizens can meaningfully contribute to the economy. The government has indeed worked hard in the last few decades to give everyone an education. However, it is the philosophy of the education system that is problematic. It is too academically oriented. Every student has to pass the 'O' level exam in order to get trained for anything. Unfortunately, this exam is too difficult for most people and mostly serves as a vetting tool - to separate the best students from the rest. Only these successful students - 20% of the total this year - can proceed to universities, colleges, polytechnics and apprenticeships to get further training. The rest...well...who cares?

But then is it right for the government to select such a small percentage of students for training, and to condemn the rest to unemployment, underpaid employment and informal business? Is it not its mandate to ensure the economic success of all people? And what is its priority? Is it to allow large firms to enjoy huge profits using underpaid labor? Or is it to enable dignified work for all citizens, and to ensure each citizen helps build the country's economy? Wouldn't that be a fair goal for our education system - to attempt to fully equip everyone for a productive and fulfilling future, regardless of academic aptitude?

A relevant education system
Finland, considered by many leading countries as having the best education system in the world - for most of the last decade, ought to have interesting lessons for us. School for Finnish students is compulsory up to age ~15-16. At that point, students can decide whether to enroll in upper secondary school (more academic) or in vocational school. Vocational school gives students occupational training and also prepares them for polytechnic school. Upper secondary school prepares students for academic, post-secondary education. Students on this side take a national examination meant for entry into higher academic education institutions (over 80% pass the exam). Vocational students need a school certificate to enroll in polytechnics.

Students have a choice on whether to take the academic route or the more vocational one. In some years, almost half the students choose one over the other. Yes, in some years, nearly 50% of the Finnish students forgo the academic route in favor of the more vocational one! Compare with Zimbabwe, where all students are forced to take the academic route where they have to pass the evidently difficult 'O' level exams before they can enroll for further learning/training.

I do believe even people who take the vocational route ought to have some academic aptitude, but certainly not at 'O' level standard. I doubt too many skilled jobs need any knowledge of vectors or complex trigonometric identities. But, as our current system stands, the 'O' level is the gold standard. Nobody seems to notice that it's a standard that is only met by 15 to 25% of the students. This is not the Olympics - this is an education system that needs to prepare EVERYONE for a productive future, not a mere 20%. A single exam that prevents 80% of the students in a country from getting formally trained is hardly relevant in the modern economy.

Vocational education
It is no secret that there are many highly skilled (indeed gifted) metal and woodworkers who couldn't solve an 'O' level vector question if they tried. But that equation is not relevant to what they do. So it doesn't make sense for them to stop learning their trades because they couldn't solve Math problems that are useless to them. There are many business-savvy informal vendors, who could do with a little knowledge of how to acquire business loans, and how to market their businesses. For that, they also do not need to know how to solve Math vector problems. They need an academic education that better suits their needs.

I should point out that their trades are highly desirable in our economy. Skills-oriented people and small entrepreneurs are both needed. Why can we not formalize their education and their place in the economy? Why are we rejecting such resourceful and creative people from mainstream education, condemning them to a life of regret and could-have-beens? Can we not, like Finland, identify the value of people who are not the strongest academically? Can we not nurture these people's talents, whilst still teaching them enough academics to complement and enhance them? Can we not serve the 80% this way? Can we not change this archaic vetting system and replace it with a more relevant system that helps and encourages everyone?

Enterprise
Let us consider a metal-worker. His is a highly needed skill (for home tools, burglar bars, iron gates, specialty equipment, etc). I personally know a man who works on such projects outside of his regular job. This person could form a business partnership with other metals workers. Or, he could just start his own business.

Unfortunately, he actually failed his 'O' levels. However, he is very talented. His little workshop is even slowly turning into a business.

Looking at the whole situation, I know the man could use some entrepreneurial training - something that he cannot find in our formal education system. He probably did study 'O' level Commerce (and probably failed it), but that's simply an academic subject on commerce. Perhaps he learned in Commerce that people do bank money, but he probably didn't learn how to apply for bank loans to start a business. What he needs is a relevant Commerce - one that teaches him relevant and applicable things, not one that tries to establish if he is good enough to proceed to Advanced ('A') Level.

The government's role
Still, what is the use of a large population of skilled and occupation-oriented young people if there aren't any jobs for them? It is the government's role to answer this question. The government ought to understand the value of a self-employed, independent motor mechanic. It should also understand that there is stiff competition for small business, and should step in to subsidize these businesses.

Our own government has attempted to do this through the Ministry of Small and Medium Enterprises. I laud that program and I hope that it does more work. It would probably be more successful working the Ministry of Education by streamlining the process of learning business and actually starting a business.

Vigorous subsidization and support of small businesses usually requires tighter economic regulation. That is at odds with a truly free-market economy. But that was my initial assertion - that education systems are made for economic systems.

The Economy and Education
I have suggested that the education system be changed to have well integrated and large scale vocational education. I also emphasized the fact that vocational students ought to be taught some entrepreneurship. This means that my education system is meant to spur entrepreneurship, which would result in numerous 'small to medium' enterprises. With a little research, it is evident that small businesses need protection from very stiff competition in pure free-market economies. In other words, they need government to survive. This may be in the form of tax breaks, low cost financing and even tighter regulation on larger businesses. These policies are undesirable for large business, and therefore undesirable in pure free-market economies. Therefore, my suggested education system warrants a shift in our economic system, from less regulation to more regulation of the market. This may be a problem for many foreign investors and local free-market advocates.

However, if the government does not complement the changes in the education system, we might end up with a skilled but vastly unemployed population. Of course, the government may step in again and force private companies to raise wages, or it may directly employ skilled labor (like Franklin Roosevelt did in the wake of the Great Depression). The point is: this new education that I envision will require significant changes in the economic system.

I could have written all this in three sentences: Our 'O' level pass rate is pathetic. Something is wrong with our education system. We should start thinking about vocational education and entrepreneurial training.