Breaking the generational logjam
Posted on October 16, 2011 in Policy Context
Source: Toronto Star — Authors: Carol Goar
TheStar.com – opinion/editorials
Published On Thu Oct 13 2011. By Carol Goar, Editorial Board
A decade ago, it was hard to find anyone who believed mandatory retirement made sense in the 21st century.
Politicians, economists, academics, pundits, human rights activists, baby boomers and seniors all agreed that putting workers out to pasture at 65 was outdated and indefensible. The Star thought so, too. It called repeatedly for abolishing the practice.
The only holdout was the Supreme Court of Canada. Three times in the 1990s, it was asked to ban mandatory retirement. Three times it refused. In cases involving university professors, police officers and hospital workers, it acknowledged that age discrimination contravenes Canada’s Charter of Rights, but maintained making room for young workers is “demonstrably justified in a free and democratic society.”
The court was roundly denounced as antediluvian, out of touch and insensitive. Most provinces acted on their own, making forced retirement a violation of their human rights code.
Today, as the Supreme Court foresaw, there is a generational logjam in the workforce.
Young job-seekers can’t get in because older workers aren’t leaving. Middle managers can’t move up because the senior positions are occupied. Aging baby boomers can’t stop working because they are supporting their underemployed children and their unemployed grandchildren. Employers can’t make succession plans.
The abolition of mandatory retirement isn’t the only reason 20- and 30-year-olds face a bleak employment outlook. There’s globalization, outsourcing, downsizing, the withering of the manufacturing sector, the loss of economic momentum and the government’s determination to bring in the best and brightest immigrants, regardless of their job prospects or the skills and needs of Canadians.
But by eliminating the only legal way to keep workers moving through the system, governments have created problems that neither they nor their citizens foresaw.
What went wrong?
• Looking back, the loudest advocates of getting rid of mandatory retirement were middle-aged or older. They saw the issue from their generation’s perspective, marshalling medical and demographic evidence to show that a large proportion of seniors was healthy, physically fit and mentally acute. The point of view of younger Canadians was either overlooked or never sought.
• Economists were convinced the world had entered a “Great Moderation.” There would be no more severe recessions, sudden lurches in the business cycle or unforeseen seize-ups in the financial markets. Steady growth was the new normal.
• And governments made some short-sighted assumptions. One was that repudiating mandatory retirement would make little difference because Canadians would keep leaving the workforce before 65 of their own volition. A second was that Canada’s declining birth rate made it imperative for them to keep workers economically productive for as long as long as possible. A third was that looming labour shortages would ensure plenty of opportunities for young job-seekers.
It all seemed plausible until 2008.
Now, with a sputtering economy, a youth unemployment rate of 17 per cent and no exit date for older workers, what choices does Canada have?
Reinstating mandatory retirement, while theoretically possible, would be extremely difficult. Few politicians would dare to take back rights from the most powerful voting bloc in the land.
Bolstering public pensions to help older workers retire would make room for new entrants. But Ottawa and the provinces pulled the plug on pension reform after 16 months of fruitless meetings.
Creating new industries to absorb talented young workers, as Premier Dalton McGuinty is attempting to do with his green energy plan, is an option. But it is expensive and the benefits are unproven.
Offering tax incentives to companies that hire young workers would make sense if they were filling vacancies. But many are downsizing or waiting for the economy to stabilize.
This probably means that it will be up to employers, employees and unions to work out piecemeal solutions: voluntary buyouts targeted at senior workers, less rigid organizational hierarchies, more flexible hours, job-sharing and progressive retirement.
These measures won’t be enough to restore the hope of frustrated young job seekers or stalled middle managers. But they might be enough to loosen the bottleneck at the top of the employment pyramid.
The Supreme Court was wiser than Canadians recognized at the time. Now it will take extraordinary political will, ingenuity and luck to get the rights of a multi-generational workforce back in balance.
< http://www.thestar.com/opinion/editorials/article/1069574–goar-breaking-the-generational-logjam >
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