In this commentary, AIMS Senior Fellow Brian Lee Crowley discusses the challenges in ageing population and labour shortages that face Canada today. Starting in 2011, population will grow faster in Canada than the labour force, and that trend will continue for forty years. By 2016, a few short years away, the number of net new workers entering the workforce will be zero and will be slightly negative for a decade after that.
Labour shortages on a massive scale are so foreign to the recent Canadian experience that it may be hard for people to grasp what it may mean. Crowley notes: “As Andrew Coyne points out in the introduction to my book, Fearful Symmetry, if you want to know which is worse, unemployment or labour shortages, just ask yourself which problem you would rather face: too many doctors or too few?”
Pressure is rising for governments to make it easier to get welfare and EI again. Yet a period of sustained and indeed growing labour shortages is not a possibility, nor a probability, but a certainty. Nothing about this is set in stone, however; we have the choice to do things differently.
In Seniors, Population Ageing, and the Future of Canada, Crowley suggests alternatives for how Canada could tackle the labour shortage by doing things differently. These alternatives include reforms to welfare and Employment Insurance, and changing the way Canadians retire. Canada’s future well-being depends on Canadians succeeding in undoing the shift in retirement expectations that occurred over the past 35 years or so. If we do so, we will make the largest single contribution possible to reducing the economic impact of population ageing.
Click here to read the full commentary.
