Social Policy in Ontario

Are boomers really blocking the careers of the generation behind them?

Posted on November 12, 2015 in Equality Debates

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TheGlobeandMail.com – ROB/Economy/Economic Insight
Nov. 11, 2015.   David Parkinson

This is part of The Globe and Mail’s week-long series on baby boomers and how their spending, investing, health and lifestyle decisions could affect Canada’s economy in the next 15 years. Is Canada ready for the boom?  For more, visit tgam.ca/boomershift and on Twitter at #GlobeBoomers

While we’ve written a fair bit in the past week about the economic threats from the baby-boomer generation’s drift into senior citizenship, there is a group that is quietly rubbing its palms together in anticipation: The workers coming up right behind them.

Finally, all those good, secure, high-paying, benefit-laden, well-pensioned positions will be vacated, making way for the next generation that has been blocked by a ceiling of boomers all their lives. Finally, this entire cohort of the chronically underemployed will have space to step up. And the more complete use of their capacity will help the economy, too, filling at least part of that worrisome labour void left by the boomer retirees.

It’s a nice story, and one that more than a few career-frustrated Generation X and millennial workers will latch onto. But when we take a closer look at Canada’s labour-force data, it’s hard to see exactly how these workers are being crowded out of the market by the baby boomers.

Historical data from Statistics Canada show that labour force participation and employment rates for workers age 35 to 50 – roughly what we would call Gen X, the generation supposedly left to pick up whatever economic and career crumbs the boomers happened to drop – have held relatively steady for more than a decade. And far from having been pushed aside by the boomers, this group actually has much higher participation and employment levels than the boomers did at the same age (a consequence of increased participation of women in the work force compared with the previous generation).

Nor is it clear in the data that the Gen X and millennial workers are any more underemployed than the boomers, who ascended the career ladder ahead of them. For 25-to-44-year-old workers – a group overlapping Gen X and career-age millennials – the ratio of part-time to full-time employment hasn’t changed appreciably in two decades. And while rates of temporary jobs, as a proportion of all employment, have crept up for this age group in the past 15 years, they have also risen for boomer-age workers.

Certainly, one symptom of a boomer-overcrowded career path would be rising numbers of people getting off the corporate ladder and deciding to be self-employed. But if we set aside the recession years, when people were becoming “consultants” for different and in many cases wholly involuntary reasons, the proportion of workers who are self-employed has actually edged lower for those age 35-44 over the past decade, and has held steady for 25-to-34-year-olds. (One might theorize from these numbers that the first wave of boomers who have retired over the past few years have already opened up positions that the otherwise self-employed Gen Xers have filled.)

The story is somewhat different for the youngest cohort in the labour market, those age 15 to 24. Their employment rate (those with jobs as a proportion of the age group’s total population) is just 55 per cent, far below the 82 per cent of the so-called “prime-age” labour force between 25 and 54. Both the employment and participation rates of 15-to-24s are down nearly eight percentage points from their late-1980s peak. Still, those rates have changed little over the past two decades. If youth employment is a problem – and most policy experts would agree that it is – then it’s certainly not a new one.

That’s not to say there isn’t merit in making efforts to lift these youth employment and participation levels. Regardless of reason, young Canadians are underrepresented in the national work force. Just as many experts argue that higher participation by seniors would go a long way to push back against demographic forces that will slow labour growth in the next two decades, higher participation and fuller employment for those at the other end of the age spectrum would provide similar benefits.

Economist David Dodge, the former governor of the Bank of Canada, argues that if we want to tap into this underused pool of workers, we need to get them more engaged in the labour force at an earlier age.

“Our policies have been oriented to incarcerating young people for ever longer periods in educational institutions,” Mr. Dodge said in a recent interview. It made some sense to delay entry into the labour market when the glut of boomers were clogging the labour pipe, but the situation has now reversed.

“That ended basically at the beginning of the century and we really haven’t accommodated that yet,” he said.

“There are a lot of things to think about now in how we do our education and training, given that the priority is not to keep kids in school forever and ever, but to get them out and into the labour force rather more quickly, to deal with this demographic challenge,” he said.

“We need these folks.”

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Tags: economy, featured, participation, youth

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