Canada's Aging Workforce
Friday, August 24, 2012
Politicians, economists, academics and journalists have for years been raising alarm over the aging Canadian workforce. The problem, in brief, concerns the fact that the generation of those over 60 years old now outnumbers those less than fifteen years old. This means that, in a year or two, those leaving the workforce will outnumber those who enter it.
Some experts think that this is a cataclysm that will ruin the country’s economy, while others think that it can be managed successfully.
The Downside of the Aging Workforce:
- An aging population will require higher federal government spending on health care. But since fewer young people are entering the workforce, fewer tax payers will be available to provide the funding for that care.
- In order to compensate for the lower number of tax payers, there will have to be substantial tax-increases as well as potential cuts in government programs like health, education, and pensions. It is unfortunate, as cutting education and health care will not benefit the country, since a sickly illiterate workforce is no better than an aging one.
- A big concern for businesses is that the size of the skills pool from which they can hire is shrinking. Many Canadian businesses report that this is already the case. Not only are there fewer young people from which they can choose, but the older people who remain in the workforce do not have the skills that they need.
How to Cope with the Aging Workforce:
- The trend for senior workers to retire early has reversed since the 1990s. This is partly due to weakening pension plans, but also results from the fact that older people are healthier now than they have ever been. Consequently, many of them simply do not want to retire and be nonproductive for 20 to 30 years.
- One solution to the skills shortage problem is to improve the immigration system so that people with the necessary skills are encouraged to come to the country and lend their skills to the economy.
- Companies can train their senior workers to help them acquire the skills that they need them to have.
- The post-secondary school system can be altered to produce the qualifications and skills that the business community needs from its young workforce.
- Companies will also have to learn to use their senior workers to their full potential. This may involve allowing them to work part-time or to work on those aspects that do not require physical effort. Then they will continue to pay taxes and remain involved in the workforce.
- The Canadian government can provide incentives to help families. This may include increased funding for day care, social grants and incentive programs for parents with children.
- Having older people work can even be advantageous, since they can pass their experience and some of their skills to their young colleagues.
Canada’s aging workforce is clearly a matter of concern, even though there are some measures in place, what do you think should be done?