En­cour­age se­niors to keep work­ing

Cape Breton Post - - Editorial -

Out with the old, in with the young? That’s cer­tainly been the think­ing for gen­er­a­tions of work­ers who wanted to re­tire early and were happy to give way to younger, more en­er­getic em­ploy­ees.

But things have changed. Cana­di­ans are liv­ing longer, health­ier lives. Many want to re­main ac­tively en­gaged. At the same time, many are con­cerned they won’t be able to af­ford re­tire­ment be­cause of in­ad­e­quate pen­sions or sav­ings. No won­der a grow­ing num­ber of se­niors would like to con­tinue on in the work­force, as many sur­veys have found.

Yet a per­verse sys­tem of in­cen­tives dis­cour­ages se­niors from work­ing. This is a prob­lem not sim­ply for older peo­ple who want to stay in the work­force, but for the econ­omy as a whole. De­spite valid con­cerns about cur­rent youth un­em­ploy­ment, as the pop­u­la­tion con­tin­ues to age economists say there won’t be enough young peo­ple to fill jobs in the work­force in com­ing years.

There is some ur­gency on this front. Last week Sta­tis­tics Canada con­firmed that the per­cent­age of Cana­di­ans over 65 (16.9 per cent) is now greater than those aged 15 and un­der (16.6 per cent).

Fifty years ago, at the height of the baby boom, se­niors com­prised less than eight per cent of the pop­u­la­tion and the youngest group was fully 34 per cent. By 2031 those over 65 are ex­pected to make up about 23 per cent of the pop­u­la­tion, sim­i­lar to to­day’s Ja­pan, the world’s “old­est coun­try.”

With all of this in mind, the Trudeau govern­ment’s eco­nomic ad­vi­sory coun­cil rec­om­mended ear­lier this year that Ot­tawa raise the age of re­tire­ment el­i­gi­bil­ity to keep se­niors in the work­force longer.

The Harper govern­ment tried to do just that, rais­ing the age when old-age ben­e­fits kick in from 65 to 67, but the Trudeau Lib­er­als rightly over­turned that pol­icy. They should stay the course.

Govern­ment pol­icy should not pe­nal­ize se­niors who don’t want to work by mak­ing them wait longer for their pen­sions. Nor does pro­vid­ing se­niors with pen­sions dis­cour­age them from work­ing as much as one would think, says An­drew Jack­son, a se­nior pol­icy ad­viser with the Broadbent In­sti­tute, which has stud­ied the is­sue.

In­stead, the govern­ment should en­cour­age Cana­di­ans to stay in the work­place with car­rots, not sticks.

One in­duce­ment, sen­si­bly rec­om­mended by the eco­nomic ad­vi­sory coun­cil, would be to al­low Old Age Se­cu­rity and Canada Pen­sion Plan de­fer­rals be­yond age 70 and en­sure that de­fer­rals past 65 are more at­trac­tive than they are now. As it stands, de­fer­rals barely in­crease the amount of guar­an­teed in­come pen­sion­ers will have over their life­time.

A sec­ond sug­ges­tion is to make it eas­ier for older work­ers to go back to school to up­grade their skills or learn new ones to adapt to a chang­ing work­place.

For too long there has been a cul­ture of push­ing se­niors out the door or en­cour­ag­ing them to leave through buy­outs to make room for the young. That may have seemed nec­es­sary in the past, but it doesn’t re­flect our cur­rent chal­lenges.

Now the govern­ment must act to en­sure that the many se­niors who want to stay in the labour mar­ket are also able to do so.

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