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The War Against Aging

October 20, 2011

2-minute read

There are, the old expression goes, lies, damn lies — and statistics. Throw enough frightening numbers around, and you can sell any sort of unfairness.

The big target these days (besides airline attendants and postal workers) is the elderly. “Canada’s rapidly aging workforce” is a major issue, says Finance Minister Flaherty. From 4.7 working age Canadians per senior over 65 in 2009, the ratio will fall to 2.5 in 2050. That means too few taxpayers to pay for the health care and income supports heavily used by the elderly — so Canada should cut back benefits.

But are these the numbers that should be used? Short answer — no. And the right numbers to look at give a very different answer. We need to count all dependents — those under the usual working age as well as seniors — and then compare this to the total of Canadians in the labour force.

Canada’s labour force has been growing significantly for many years — mainly because of the huge increase in female participation rates, a trend that continues amongst middle-aged women. So the labour force keeps growing though retiree numbers rise. Immigration and higher aboriginal labour force rates contribute to this.

As for the overall dependency levels of the whole Canadian economy, the number of dependents increased dramatically with the baby boom after World War Two, reaching its highest levels by the 1960-65 period, and then gradually falling. In recent years, though the proportion of seniors in the population has been increasing, this has continued to be outweighed slightly by the decrease in youth dependency.

Put these two trends together, and the reality is that the overall dependency ratio for the labour force has been declining and continues to decline (from 1.2 in 1961 to close to 0.7 in 2011.) That ratio will begin increasing again to 1.0 in the years ahead. But the dependency ratio will at no time come close to the high level which Canada experienced in the 1960-65 period — when many social programs such as Medicare were initiated.

The data from Canada show, compared to other countries, a particularly sharp drop in the dependency ratio over the 1961-81 period, plus continuing decline in the ratio to the present (even though levels in comparative countries France, Sweden, the UK and US are rising.) This big past fall makes rising future dependency ratios seem more pronounced here, as the huge boomer bulge that cut past rates moves into retirement. In 1961, Canada’s overall dependency ratio was much higher than comparative countries. Now it is lower.

In this context, social programs may well need some restructuring (can closed schools become hospice facilities?). But, compared to counterpart countries, there is no basis for claiming crisis here. Canada’s dependency ratio has fallen very sharply and is now low compared to other nations. The war against the elderly looks like just another battle in the same-old, same-old fight by the wealthy against social fairness.

Steven Langdon, is an academic, economist, former federal NDP politician and one of the founding members of the CCPA.

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