Demographers have been discussing the implications for years, but finally the consequences of population aging are beginning to drive mainstream economic policy.
Nova Scotia, according to official government projections, is about to see its workforce shrink. As the overall population levels off and begins to decline, the working-age population is set to contract by almost 40,000 over the next eight years.
Since there are currently about 50,000 unemployed Nova Scotians, 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 Nova Scotian, there may be a job needing to be filled — but there is not a job for every Nova Scotian. 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. Engineering companies report technical personnel shortages that they must fill from abroad.
The issue isn’t on the demand side — it is on the supply side. Those 50,000 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 and African Nova Scotian 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 Nova Scotia 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 both black and aboriginal societies are underrepresented in higher education achievement and labour force attachment — and overrepresented in the criminal justice system. Both groups, however, are increasing in number — in contrast to expected overall population declines.
Both groups 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 reason governments are finally facing up to population change is simply the need to preserve the revenue stream on which they depend. 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. Of those, retired Nova Scotians of traditional European stock will remain far and away the largest component.
Combined, the aboriginal and African Nova Scotian communities only number in the region of 60,000. Even if all were fully employed, there would still be an urgent reason for 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 Nova Scotians. 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 Nova Scotians with long and deep attachments to the province.