Aging workforce likely to have economic impact

A study released by two Lakehead University professors last week shows the workforce in Northwestern Ontario is aging faster than that of the rest of Ontario—and the consequences could be damaging to the region’s economy.
“The economic impact of an aging workforce will be to reduce the size of the regional economy,” wrote Dr. Livio Di Matteo, a professor of economics, in his report “An Assessment of the Economic Impact of an Aging Workforce in Northwestern Ontario using Survey-Based Data.”
“The size of that impact depends critically on the proportion of workforce retirements that will be replaced,” he added.
The average age of workers in Ontario in 2001 was 38.9, compared to 38.6 in Northwestern Ontario. While the average age is slightly lower in this region, the workforce here is aging faster than in the rest of the province.
The study—prepared for FedNor and the two local Training and Adjustment Boards—used data from the 2001 census prepared by Statistics Canada.
“The purpose of this research project is to determine the extent to which the region’s aging workforce will produce labour and skill shortages by 2011 and by 2016,” wrote Dr. Chris Southcott in his report, “The Effect of an Aging Workforce on Future Skill Shortages in Northwestern Ontario.”
“The lack of economic growth in the past 20 years has meant that there have been very few new employees hired in the major industries of the region. . . Over the next eight to 13 years, many sectors of the regional workforce will be severely affected by large numbers of retirements,” added Southcott.
“The fact that, over the past 20 years, the region has been experiencing high rates of youth out-migration and has been unable to attract large numbers of immigrants, suggests that the region could be facing fairly high labour and skill shortages in some sectors.”
The study focuses on the number of retirements expected in each work sector by 2011 and by 2016.
“It could be normally expected that roughly 27 percent of workers would retire over a 10-year period. . . . The comparable percentage for a 15-year period would be 40 percent,” he stated.
“The concern comes when you have an abnormally large percentage of retirees.”
The sectors most likely to be affected by an aging workforce are health, education, and the pulp and paper industry. Registered nurses, teachers, university professors, electricians, and millrights were identified as the trades most likely to be affected by skill shortages.
There currently are 2,475 registered nurses in Northwestern Ontario who have been working for 15 years or more. Of those, 525 are expected to retire before 2011, and 1015 by 2016.
In percentages, that means 21.21 percent of registered nurses likely will retire before 2011, and 41.01 percent likely will retire before 2016.
While the percentages are not exceptionally high, the number of nurses expected to retire is, by far, the largest number of workers in the region facing retirement by 2016.
“If it’s over 40 percent, there will probably be a shortage,” said Dr. Southcott.
By comparison, 235 (or 43.52 percent) of registered nursing assistants in the region are expected to retire before 2016.
However, these numbers don’t necessarily reflect the situation in individual communities. In Fort Frances, for example, no registered nurses are expected to retire before 2011, and only 10 nurses (or 11.11 percent) are expected to retire before 2016, according to the study.
In Rainy River District, 20 registered nurses (or 10.81 percent) are expected to retire by 2011 and 50 (27.03 percent) are expected to retire by 2016.
These numbers are well below what the study states is a normal rate of retirement, and likely will not create a skill shortage in that category.
However, there are other concerns in Fort Frances and the district.
“At 39.11 years, the average age of workers in Fort Frances is higher than the average for Northwestern Ontario,” the study noted. “Looking at retirement related skill shortages, Fort Frances has a larger than average number of occupational categories facing problems by 2011.
“Those occupations that have the largest numbers of potential retirees are stationary engineers, power station operators, electrical trades and telecommunications occupations, retail trade managers, transportation equipment operators and related workers, excluding labourers, and secondary and elementary school teachers and counsellors.”
In Fort Frances, 66.67 percent of stationary engineers, power station operators, and workers in electrical trades and telecommunications occupations are expected to retire before 2011.
That number jumps to 80 percent in 2016.
These occupations also are at risk across the district, with 70 percent of stationary engineers and power station and system operators likely retiring before 2011, and 90 percent before 2016.
In very few cases, the numbers came out negative. For example, in Northwestern Ontario, the percentage of journalists retiring before 2016 is minus-26.67.
“This probably means there are more people working past 60 than there are between the ages of 50 and 60,” Dr. Southcott explained.
This also means there likely won’t be a shortage of journalists in the region within the next 12 years.