Journal of Commerce | John Clinkard | August 29, 2019
It is an almost universally accepted fact that Canada’s labour force and indeed the labour forces of most industrialized economies are getting greyer.
In Canada, the proportion of workers aged 55 and over has risen from 9.6% in 1996 to 21.5% in 2018. South of the border, the percent of workers over 55 has risen by approximately the same extent from 12.2% to 23.3% over the same period.
The ratio of younger workers aged 25-34 to older workers aged 55 and over is the “renewal” ratio. If it is greater than one it indicates that the number of recently hired workers is larger than the number of workers who are likely to leave the workforce in the not too distant future.
Conversely, a ratio of less than one indicates that there is a risk of labour shortages due to an insufficient number of workers replacing those who will be retiring.
According to a recent analysis of Census data by Statistics Canada, a steady slowing in the rate of entry of younger workers relative to older ones (55+) has caused the renewal ratio in Canada to decline from 2.7 in 1996 to 1.0 in 2018.
Going forward, Canada’s population growth is expected to continue to slow. Consequently, there is little doubt that the renewal ratio will continue to trend steadily lower.
In line with the steady increase in the median age of the population from 35.2 to 40.8, the proportion of workers aged 55 years and older has increased in virtually every occupational category over the past 20 years.
This being said, faster-growing occupations which tend to attract a larger number of younger workers, such as computer and information system managers, have aged less. Other higher growth occupations that have “aged” less include executive assistants (+286%): professional occupations in advertising, marketing and public relations (+283%); social and community service workers (+190%); and chefs (+188%).
At the same time, slower-growing or shrinking occupations have tended to attract fewer younger workers and consequently have “aged” more.
For example, the impact of outsourcing is largely responsible for causing the number of industrial sewing machine operators to drop by 73% since 1996 and, not surprisingly, their share of workers 55 and over has trended steadily higher from 11.7% in 1996 to 41.6% in 2016. Other occupations that also experienced significant aging due to automation or globalization include tailors and dressmakers, tool and dye makers and mail and postal workers.
So what about the construction industry? Currently, employment in the construction industry is 7.7% of Canada’s workforce which is just a shade under the high of 7.8% it reached in early 2013. In 2016, approximately 20% of the workers in the 20 major construction occupations were 55 years or older compared to 11.7% in 1996.
As noted above, faster-growing occupations tend to be “younger” than those which are growing more slowly. For example, over the past 20 years, the number of workers employed as construction trades helpers and labourers increased by 104%. Although the percentage of workers over 55 in this occupation has doubled from 7.5% to 14.9% since 1996, it is well below the industry average.
Among the major construction trades, the fastest growing is electrician, the number of which has more than doubled from 40,000 to 83,700 since 1996. At 16%, the share of electricians over 55 is below the average of the industry.
The second-fastest-growing major construction occupation is plumbing. It has grown by 99% over the past twenty years and given that just 14.6% of plumbers were over the age of 55, it is the “youngest” trade.
In terms of size, carpentry with 147,000 workers is by far the largest occupation. Although it has grown more slowly (57%) than the above-noted occupations, with a proportion of workers over 55 at 20.1%, it is close to the average of the construction industry as a whole.
One final observation regarding the age of occupations in the construction industry concerns the higher proportion of workers aged 55 and over in supervisory roles. For example, 27% of home building and renovation managers and 24% of construction managers are over 55. That these occupations are more mature is in keeping with the fact that they generally require individuals to have more experience. However, they also highlight the occupations where younger workers will find more opportunities in the future.
John Clinkard has over 35 years’ experience as an economist in international, national and regional research and analysis with leading financial institutions and media outlets in Canada.