According to a latest study on the employment of Canada’s labour force by Royal Bank economist Nathan Janzen, the steady decline in the so-called participation rate continues even as the unemployment rate drops. The participation rate is a number that tracks employed Canadians and those seeking employments, as a percentage of the working-age population.
The explanation for the steady decline is that many Canadians are dropping out of the workforce because they are retiring. According to Janzen’s report, “all of the decline in the Canadian participation rate since the 2008-09 recession can be explained by the aging of the population and a resulting increase in retirements.”
The report has potentially negative implications for governments. Studies indicate that immigration won’t be sufficient to fully compensate for the aging workforce while provincial governments that are responsible for health-care spending will also be affected. A slower labour force will limit economic growth to about 1.8 per cent in the next several decades, compared with 2.6 per cent for the 1977 to 2011 period.
The aging issue has been a prime justification used by the Harper government for changing job training programs, and for continuing the controversial temporary foreign workers program.
The report cautions that Canada’s labour market is not fully recovered from the recession and unemployment is still higher today than in 2008. However, the report does not mention that 95 per cent of the increase in unemployed Canadians is in fact due to retired citizens.
Source: CTV News