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One of the central themes of the New Brunswick government's self-sufficiency agenda is the need for income levels to rise in the province. There are many reasons why rising income levels are important to New Brunswick's future prosperity. Higher incomes lead to higher taxes paid, which will help the government's objective of reducing its dependency on federal equalization payments.

Some would argue even more importantly, higher income levels coupled with a lower overall cost of living will make New Brunswick an attractive place for people to move to - which is critical given the long trend of out-migration.

The evidence would indicate New Brunswick is not making up much ground in the area of increasing income levels. The previous government's prosperity plan also called for reducing the wage gap between New Brunswick and the national average. The 2006 Census confirmed the prosperity plan did not bring as much prosperity as we might have hoped.

In 2005, the average employment income for a full time worker in New Brunswick was $41,412 per year. That was 19 per cent lower than the national average. From 2001 to 2006, average employment income (in constant dollars) increased by 5.5 per cent nationally but by only 2.3 per cent in New Brunswick (less than half the national rate of income growth). In other words, the gap between average income in New Brunswick and elsewhere in Canada is increasing.

A key reason why we are not making up the gap with the rest of Canada in the area of income is that we are not making up the gap in the area of post-secondary education. There is ample evidence to show that rising education levels go hand in hand with fostering higher incomes.

However, New Brunswick continues to be well below the national level for university graduates in its population. As of the 2006 Census, only 13 per cent of the population held a university degree or certificate, among the bottom three provinces in Canada.

But when it comes to advanced degrees, New Brunswick is even further behind. In 2006, there were 25.1 persons with a master's degree or earned doctorate in New Brunswick per 1,000 adults, the second lowest level of advanced degrees among a provincial population in Canada. New Brunswick has 38 per cent less people with graduate degrees than the Canadian average. The contrast grows even more stark when comparing advanced degrees in mathematics, science and engineering (the backbone of the 21st century economy). There are only 5.1 persons per 1,000 adults in New Brunswick that hold a master's degree or higher in these technical disciplines. This is well under half the national level and almost one third compared to the Ontario population.

The question naturally becomes how do we raise the education level of the workforce? The evidence is equally clear that in the labour market the supply and demand relationship, the focus must be on demand. If our companies don't require the technical skills that come with post-graduate degrees, then it doesn't matter how many people the province's universities turn out with master's degrees.

I am certainly not an education elitist. I believe there are many highly respectable career options that do not require a university degree. But the overall economic development focus needs to be on fostering an environment where higher wage jobs are the norm and not the exception in New Brunswick.

There are many public policy efforts that directly impact the capacity of the province to generate high wage industries in the province. Tax policy can be used to foster higher wage industries. Having a culture of research and development also leads to the need for more technical skills in our companies -both small and large. Focusing industry cluster development and business attraction efforts on higher wage industries such as life sciences, information technology and financial services should also lead to more jobs requiring higher education.

The bottom line is simple. It is easy to call for higher wages and salaries in a document like the prosperity plan or the self-sufficiency agenda but action must follow words.

David Campbell is an economic development consultant based in Moncton. He writes a daily blog, It's the Economy Stupid, at www.davidwcampbell.com. His column appears Wednesdays.