Aging workforce threat to age-old economy.

• Author: Pullia, Frank
• Position: A Window on the Northwest

During the period 1996 to 2001 Northern Ontario 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 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 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 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 value of wages and salaries, as well as other assorted information. In total, there were 107 respondents 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...