Implications of the aging workforce

In my column today I take a look at the fiscal consequences of the significant demographic shift in New Brunswick that is currently underway.    We have had a steep increase in the population aged 55-64 (over 50%) and they will be sequentially retiring in the next 10 years (most of them, NB has the second lowest percentage of working for pay seniors in Canada). 

By contrast the population aged 65 and over has only increased 20% in the past ten years.  There will be a dramatic rise in retirees – and as I show – they are moving out of their prime tax paying years into prime health care services utilization years.  A dangerous fiscal mix for government.

For people who think the current fiscal situation is no different than what McKenna’ faced in the early 1990s or Hatfield in the 1980s, think again.  Add on top of that 3 times as many people moving into retirement and a negative growth rate of young people.

Throw on top of that a Canadian dollar at par with the U.S. (it was 65 cents during much of McKenna’s recession), rising wage costs and a tight labour market.

Fun times to be sure.

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3 Responses to Implications of the aging workforce

  1. Frederic Gionet says:

    ‘Right-sizing’ for this upcoming reality is something that once again should have been done decades ago. Will we ever learn ?

  2. John Doe says:

    I’m no economic developer, but is there possibly a bright spot in this predicament? With such a massive boom in retirement, is it possible that we will require an influx of people to fill the vacancies, meaning that New Brunswick could become a prime location for young people or expats looking to return? I realize that the massive health care bill is a huge negative, but is it possible that we will see a much larger influx of young skilled people while the baby boomers transition out of the workforce?

  3. richard says:

    Perhaps if things continue to worsen in the US, and the tea party haters with their rethuglican allies take over the US govt, we will see a flood of bright, well-educated Americans into NB over the next 20 yrs. …..well, at least the ones that can’t fit into PEI or NS.

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