Politicians all over the continent like to point to our low levels of unemployment as a sign that our economy is booming and recovering. And perhaps it is. A recent Bloomberg article notes that the Canadian labour market has seen “a decade-low unemployment rate” and “some of the fastest job gains on record.”
That high level of employment, the article adds, boosted “the average weekly earnings for Canadian workers… 3.4 per cent in May from a year earlier, to $1,031.” There were a whopping 32,600 jobs added that month, Bloomberg reports, citing Statistic Canada figures.
Reading these positive numbers, one might include that things look great for our younger workers – low unemployment and a high level of job creation.
Not so fast, reports Livio Di Matteo of the Fraser Institute, writing in the National Post. Sure, the story notes, we can expect that “in coming years employment and the labour force in Canada will continue growing,” but it will be “at a diminished rate, with employment growing slightly faster than the labour force.”
And the reason why, Di Matteo explains, is that low unemployment rates are “due largely to our aging population and the expected decline in labour force participation rates. Overall labour force participation in Canada has declined over the past decade in Canada, but interestingly has grown among people aged 55 and older.” In plainer terms, there are more older people in the workforce than before, meaning those at or nearing retirement age are continuing to work.
Di Matteo suggests that there will be more opportunities for younger workers when boomers begin to fully retire. In 2016, “people aged 55 and over accounted for 36 per cent of Canada’s working age population,” Di Matteo notes, adding that this figure should rise to 40 per cent by 2026. When the boomer cohort finally begins to retire, Di Matteo predicts higher demand for younger workers in “healthcare, computer system design… support services for mining, oil and gas extraction, social assistance, legal, accounting… and entertainment,” among others.
It’s a similar story south of the border, reports Market Watch. There, unemployment is “at a half-century low,” but a reason why is that there aren’t as many new entrants in the job market, the report notes.
“The U.S. doesn’t need to create as many new jobs to absorb a slower growing population of working-age Americans. Economists figure the U.S. needs to add less than 80,000 new jobs a month to hold the unemployment rate near its remarkably low rate,” the article states.
Experts are split on whether boomers are working late into life because they want to or because they have to. Sure, many love the social contacts and engagement of working – or want to travel more now that they are semi-retired. But those still saving for retirement may not be hitting their savings targets.
A report from RBC, covered in Yahoo! Finance Canada, says those boomers with “investable assets” of $100,000 or more planned on saving $949,000 for retirement, and “are falling $275,000 short.” Those with less than $100,000 saved have lesser goals, but are much farther away from them, the report states.
It will be interesting to see how the trend towards boomers hanging on to their jobs plays out, as it ultimately must.
For those of us who are still slogging away in the workforce, all these stats underline the importance of directing some of your income towards long-term savings for retirement. An excellent tool for this purpose is the Saskatchewan Pension Plan, which offers a flexible way for your savings to be invested, grown, and ultimately paid out to you as a lifetime pension in the future. It may be better to pay into your own retirement now, rather than having to work later in life to fund it.
|Written by Martin Biefer
|Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22|