Pension crunch coming as population ages and labour shortages appear.TORONTO -- A worldwide labour force shortage combined with an aging population will likely cause a pension systems crunch while undermining economic growth in many countries by 2030, including Canada, whose old age dependency, due to aging baby boomers See generation X. , will jump by 93 per cent over the 2000 rates. This alert was issued by the Watson Wyatt Worldwide report to the World Economic Forum in Davos, Switzerland In its report, Watson Wyatt predicts Canada's labour supply will grow more slowly than the population .starting in the next decade, and then eventually stagnant until the labour force begins to shrink in the 2020's causing a significant labour shortage. By 2030 Canada's total dependency rate is expected to increase by 26 per cent. "This increased dependency burden will lead to an enormous strain on the Canadian pension system," said Ian Markham, Director, Pension Innovation for Watson Wyatt Canada. Markham notes one possible remedy to the situation is to adopt a program that promotes greater workforce participation at all ages The report indicates that Canada's activity rates fall short of rates of the top five OECD OECD: see Organization for Economic Cooperation and Development. countries for every age and gender group, but most noticeably among older workers age groups of 55 years or more. However, if Canada, like the top five OECO OECO Organizacion de los Estados del Caribe Oriental (Spanish: Organization of States of the Eastern Caribbean) OECO Outboard Engine Cutoff (NASA) countries, adopted programs to increase labour force participation of older workers, it could significantly reduce its old age dependency rates. Other countries facing similar pension threats and reduction in the labour force include the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community , Japan and many less-developed countries Less-developed countries (LDCs) Also known as emerging markets. Countries who's per capita GDP is below a World Bank-determined level. . Watson Wyatt's reports note that over the long term, Japan would have to increase its immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. by 11 times over its existing rates just to make up for its low fertility rates Noun 1. fertility rate - the ratio of live births in an area to the population of that area; expressed per 1000 population per year birth rate, birthrate, fertility, natality . By 2030 Mexico will have twice as many working-age people than Germany, which, like Mexico, currently have working populations of about 50 million. Italy on the other hand will have more retired workers than active workers by 2030. |
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