Yes, thank you.
If we look back five or 10 years, when people like David Foot started to flag the enormity of the demographic challenge and what that meant for the labour force, I think one of the main motivating factors in worrying about aging from an economics viewpoint was the slowing growth in the labour force, which would slow economic growth as well.
That's a distinct effect from what was raised earlier, the question of pockets of high unemployment, an overall unemployment rate of 7% plus, which is layered on top of the demographic. At the personal level, there's just the issue of choice as an older worker, that someone is 69 years old, is still feeling pretty healthy and wants to top up their pension, or just doesn't want to sit at home. That's the individual choice part.
These are all distinct pieces, I think. They all work together—not always in the same direction, but they're all happening at the same time.
I've never put as much stock in the overall slowing in the growth of the labour force as others, for two reasons. One, I have a much stronger belief in the capacity of employers to substitute capital for labour, in other words technological change. We've all seen many examples of significantly reduced workforces. Employers will make the changes and adapt to the changes required in workforce levels. That being said, it doesn't mean that a macroeconomic problem wouldn't be involved with the slowing of the workforce. But individual employers have a pretty strong capacity to adapt, so I'm less worried about that.
Two, what we're experiencing today at the micro level, and what sometimes clouds the issue, is the idea that we have skills bottlenecks. We have pockets in Hamilton and other areas in eastern Canada or even western Canada. In certain occupations and trades in Alberta, we have high demand or high unemployment rates, depending on the circumstance. These bottlenecks are ongoing problems. We have a relatively high unemployment rate. That doesn't take away from the issue of having to address the needs of older workers in the labour force.
There is one further complication, which is the odds-on bet that we're in for a prolonged period of slow economic growth. This may translate into a prolonged period of relatively high unemployment compared to, say, the late nineties and 2000s. That being said that still doesn't take away from the need to address older workers in the labour force.
These layers from the macro down to the micro are all in play, and I think it can be a little confusing because sometimes they don't seem to be working in the same direction. I'll be very specific to finish. Simply saying we have a high unemployment rate doesn't necessarily mean that we shouldn't try to attract older workers into the labour force for longer, increase their participation rate, or encourage them to work longer in their careers. They're not mutually inconsistent.
One last point is that I would not advocate widespread or wholesale policy interventions. I think it's extremely important to identify the dysfunction in the labour market and then address the policy at those dysfunctions as opposed to broad-based policies.