The consequences of population aging are finally beginning to drive mainstream economic policy.
New Brunswick, according to official government projections, is about to see its workforce shrink. The province’s population is aging more rapidly than the national average – the proportion of school-age youth is falling, and the above-65 crowd is on the rise. The working-age population is set to contract by close to 30,000 over the next quarter-century. Since there are currently just under 40,000 unemployed New Brunswickers, that may sound like a happy outcome. Virtually everyone will have a job – and since the trend will continue for at least another couple of decades, surely the demand for workers will push up wages and everyone in the province who wants to work will be assured of a well-paid job. Wrong!
For every New Brunswicker there may be a job needing to be filled, but there is not a job for every New Brunswicker. Labour supply-demand mismatches are rampant. For example, skilled trades in the construction industry are in persistent short supply – sufficient to impede building plans and delay completions. There is no reserve of expert tradespersons.
The issue isn’t on the demand side, it is on the supply side. Those 40,000 unemployed represent only a portion of the underutilized human resources in the province. There are many more who do not even consider themselves in the labour force,and hence are not recorded as being jobless. Among their number are discouraged older workers and members of the poorly-equipped aboriginal community. There are also a great many other workers whose qualifications only suit them for low-paying jobs. Regrettably, the challenge isn’t about identifying high-value-added opportunities, but of pairing existing skill sets with available jobs.
It is all very well for the provincial government to increase its focus on attracting new immigrants to the province, but the reality is that New Brunswick has not done a good job of economically integrating its indigenous population. The issue is complex, and responsibility rests not with policy-makers alone, but with the broader community. If for no other reason than simple pecuniary self-interest, solutions must be found.
It is widely recognized that aboriginals are underrepresented in higher education achievement and labour force attachment and overrepresented in the criminal justice system. Aboriginals are, however, increasing in number, in contrast to expected overall population stagnation. They are, on average, younger and will form a higher proportion of the working-age population. That represents a challenge to policy makers favouring social inclusion, as well as an economic resource that can benefit everyone in the province.
The forest products industry – still an important economic driver in the province – serves as a case study of both how skills shortages, rather than general labour availability, can hamper productivity and how aboriginal resources can be underutilized. Forestry graduates have been declining and certain proficiencies are undersupplied. Aboriginals are over-represented in the industry, but predominantly in low-level positions. Generating quality economic performance depends on employing all available human resources to maximum effect.
Governments are finally facing up to population change, but their primary motivation appears to be the need to preserve the revenue stream on which they depend. That reflects the reality that, even in a world of full employment, the major pressure on government spending will come from those who are outside the labour force, and simultaneously less liable to taxes. But, the real challenge posed by population aging is actually how to maximize the earning potential of the broadest span of the working-age persons.
The total aboriginal community numbers less than 18,000. Even if all were fully employed, there would still be an urgent reason for repatriating migrants or attracting increased immigration, especially for those skills that demand many years of training. However, immigration has been shown to have its own challenges, most especially the retention of newcomers. The same strategies the government believes it can develop to overcome established cultural resistance to newcomers and create an inviting setting to attract and keep immigrants should prove effective in fostering economic inclusion of all native-born New Brunswickers. It is all about education, skills training and workforce engagement.
Perhaps the least welcome outcome of the emerging aging predicament would be to introduce an aggressive immigration policy while simultaneously failing to ensure the active workforce inclusion of New Brunswickers with long and deep attachments to the province.
Don McIver is the director of research at the Atlantic Institute for Market Studies, an independent economic and social policy think tank based in Halifax.