By Canadian HR Reporter | Link to Article
No need to wait any longer for the baby boom retirement shock to hit the economy — it’s already here, according to a new report on trends in Canada’s labour force.
By Canadian HR Reporter | Link to Article
No need to wait any longer for the baby boom retirement shock to hit the economy — it’s already here, according to a new report on trends in Canada’s labour force.
In a fresh analysis on employment, Royal Bank economist Nathan Janzen notes that the steady decline in the so-called participation rate continues even as the unemployment rate drops.
The participation rate, a little reported number that tracks Canadians with jobs and those looking for jobs as a percentage of the working-age population, dipped to 66.1 per cent in the latest employment data for April, down from 66.5 per cent from a year ago and from 67.8 in February 2008. The working age population is considered anyone over age 15 years, with no upper limit.
It would be easy to jump to the conclusion that the steady decline means tens of thousands of Canadians are becoming too discouraged to look for work and are just dropping out of the workforce altogether, says Janzen.
But that would be wrong.
The most likely explanation is that many Canadians are dropping out of the workforce because they are retiring. And the trend is likely to become more noticeable going forward, Janzen said.
“This has long been expected,” he said, noting that in 2007 Statistics Canada predicted the participation rate could drop to the 58 per cent range by 2013.
“If you are waiting for the participation rate to turn as a sign of labour market strength you are going to be waiting for a long time.”
The best evidence that aging is the critical factor at play is the data on those Canadians who tell Statistics Canada each month that they are “not in the workforce” voluntarily.