Aging workforce threat to age-old economy.During the period 1996 to 2001 Northern Ontario Northern Ontario is the part of the province of Ontario which lies north of Lake Huron (including Georgian Bay), the French River and Lake Nipissing. Northern Ontario has a land area of 802,000 km² (310,000 mi²) and constitutes 87% of the land area of Ontario, although it witnessed an accelerated transition from a resource-based economy to a more diversified knowledge-based economy. However, given the substantial efforts to spur economic growth, the region as a whole has not performed as well as indicated by a substantial youth out-migration and shrinking tax base. With an aging workforce also prepared to retire in the next five to 10 years, there are those who predict that we will soon be facing the paradox of shortages of skilled labour in certain sectors, while facing high levels of unemployment in others. A report commissioned by the North Superior Training Board and the Northwest Training and Adjustment Board (through FedNor funding) identifies labour trends and, in a proactive way, the impact of the aging workforce on the northwestern Ontario Northwestern Ontario is the region within the Canadian province of Ontario which lies north and west of Lake Superior, and west of Hudson Bay and James Bay. It includes most of subarctic Ontario. economy and labour needs. The report is titled The Effect of an Aging Workforce on Future Skill Shortages in Northwestern Ontario. Before looking at the results of the study, it should be noted that a variety of factors such as capital and labour, labour force productivity, and demand for a region's goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. could affect the local economy. However, all other things given, the economic impact of an aging workforce will be to reduce the size of the regional economy. The size of that impact also depends critically on the proportion of workforce retirements that will be replaced. The data for this analysis comes from a survey of firms in northwestern Ontario conducted by Dr. Chris Southcott, Lakehead University Lakehead University, at Thunder Bay, Ont., Canada; founded 1946 as Lakehead Technical Institute. It achieved university status in 1965. Lakehead has faculties of arts and science, business, education, engineering, forestry, library and information studies, nursing, over the summer of 2003, with the assessment of the economic data provided by Dr. Livio Di Matteo, professor of economics at Lakehead University. Firms were asked a set of questions dealing with their level of concern over an aging workforce, the number of employees, their anticipated retirement number over the next five to 15 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time value of wages and salaries, as well as other assorted information. In total, there were 107 respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. representing both large and small employers, most sectors of the regional economy, as well as most geographic locations in northwestern Ontario. The report shows that on average, large employers expect 9.2 percent of the current average number of employees to retire within the next five years as compared to 5.1 percent for small employers. However, in 15 years, large employers expect an average of 30.6 percent of current employees to be retired, while small employers expect only 13.9 percent. The economic impact of an aging workforce will be larger in those communities dependent on large employers given the size of anticipated retirements. While larger employers are expected to replace a larger proportion of their retirements relative to small employers, they still, on average, only expect to replace 83.9 percent of retirements. The results show that, all other things being equal, retirements over the next five years represent a substantial economic loss. Assuming an average level of replacements as reported in the survey, retirements will lead to a net job loss of 1,495 employees and a loss in regional output of 1.4 percent. This represents a loss to the northwestern Ontario's economy of approximately 93.3 million dollars based on the gross domestic product estimate for 2003. The size of the GDP GDP (guanosine diphosphate): see guanine. loss is correlated cor·re·late v. cor·re·lat·ed, cor·re·lat·ing, cor·re·lates v.tr. 1. To put or bring into causal, complementary, parallel, or reciprocal relation. 2. with the replacement rate. The larger the share of retirees that will be replaced, the lower the GDP loss. While boosting the replacement rate for retirees is one tangible way to reduce the economic contraction An economic contraction is a reduction in goods and services for sale in the market place. Typically it relates to a downturn in production caused by external factors such as weather or a decline in exports, or by such internal factors as taxes, regulatory constraints or other outlined in this report, the best way to offset the potential economic decline depicted de·pict tr.v. de·pict·ed, de·pict·ing, de·picts 1. To represent in a picture or sculpture. 2. To represent in words; describe. See Synonyms at represent. here is through overall employment growth and job creation. The question remains, will this region have the right mix of skillsets required by a changing economy? Subsequent articles will cover the looming looming: see mirage. skill shortages. [ILLUSTRATION OMITTED] The report can be viewed online at www.nstb.on.ca and www.ntab.on.ca Frank Pullia is the Principal of Pullia Accounting & Consulting and the Co-Chair of Business on the North Superior Training Board.He can be reached at frank@frankpullia.com |
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