HRPD Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 28, 1999

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[English]

The Chairman (Ms. Albina Guarnieri (Mississauga East, Lib.)): I call the meeting to order. As you've heard, we're being summoned to the House of Commons, so perhaps you'd be good enough to make a brief presentation and then we'll hurry back for the question and answer segment.

Does that meet with everyone's approval?

We've heard that numbers never lie, so we're waiting for the honest goods today. Thank you. Please begin.

Mr. Mike Sheridan (Director General, Labour and Household Surveys, Statistics Canada): Thank you very much, Madame Chairman. We can keep this quite contained. Can you give us an indication of what your schedule looks like? How long would you like us to spend on this?

The Chairman: Fifteen minutes.

Mr. Mike Sheridan: I think we can summarize it in that time.

My colleague, Deborah Sunter, who co-authored this report, Labour Force Update: Older Workers, is going to do the presentation. So we'll cut straight to the chase. We're going to talk about workers who are 50 to 64 years of age, and we'd like to give you an overview of the major trends with respect to those workers, the sorts of things they're running into with respect to job loss, their risk of job loss, what they look like, who they are, and, ostensibly, what their transitions look like vis-à-vis retirement.

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I'll ask my colleague, Deborah Sunter, who is the manager of the monthly Canadian labour force survey to lead us straight into the presentation, which I think we have brought copies of and hopefully the members have.

The Chairman: Thank you.

Ms. Deborah Sunter (Manager, Labour Force Survey, Statistics Canada): Thank you, Madam Chair. Thank you, Mike.

I hope every member has been distributed a copy. We don't have actual slides; we have a presentation, a handout, and I'm going to be going through that slide by slide, with comments. Necessarily, of course, this is a very broad-brush presentation. Behind these broad aggregate general numbers are many, many variations in the details, and we are looking at major trends here.

On the second page of your handout is a very familiar type of slide, one that shows the impact of the aging of the baby boom in terms of the share of the working-age population. Right now 55- to 64-year-olds comprise 13% of the working-age population. In the next 15 years that's going to go up to about 20%, a very sizeable number.

At the moment, there are about 2.5 million 55- to 64-year-olds and 1.4 million of those are in the workforce. Given the trend in terms of population, one could consider that this will be a very large workforce indeed.

If we turn to the next slide, however, another trend we're all very familiar with, which may mitigate against huge numbers in the labour market, is the declining age of retirement. This is a very long-term decline. We know it's been very much influenced by the availability of both public and private pensions. As you can see, the slope of the decline was actually even steeper in the eighties than the nineties, which may surprise some people who might have thought that labour market conditions in the nineties would have pushed more and more people rather more rapidly into early retirement.

There is some evidence that more people did, but this has not lowered the age to any considerable extent, although it's still trending down. The age—on average, roughly 62 for men and 61 for women—hides a great variation around that age.

In the next slide we turn to the employment rate. The employment rate on the chart shows men on the left and women on the right. As for so many other labour market trends for older workers, there's a great divide in terms of gender. Compared to younger age groups for men, we can see the very precipitous downward slope in employment rate for older workers, which is largely reflecting earlier retirement and was probably a fairly benign trend until the early nineties. You can see an acceleration due to the labour market conditions during the recession. Conditions improved in 1996-97. However, the employment rate has stopped growing in 1998, which may suggest that early retirement is not a thing of the past and is still continuing despite rather good labour market conditions recently.

On page 5 we go to a very brief profile of the characteristics of older workers. The most outstanding one of today's older workers is that their formal educational attainment tends to be rather lower than those of younger adults. It's important to note that the next cohorts coming along are much more homogeneous in terms of education—at least formal education, perhaps not the content of that education.

Page 6 shows the self-employment rate, which is the proportion of workers within a particular age group who are self-employed. It's well known that self-employment has been an engine of growth in the nineties, accounting for about 60% of the net increase in jobs since 1989, and older workers have been a major factor in that growth. The self-employment rate rises with age. Four in ten older male workers are self-employed and one in four older female workers are. One thing to note is that although the rates look very, very high, one of the reasons they appear high is that employees tend to leave the labour market at an earlier age. They have retirement pension plans, etc., and perhaps also by choice tend to go, whereas self-employed stay in the labour market longer.

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On page 7 we look at the same sort of thing for part-time work, the proportion of workers who hold part-time jobs. I think this is an aspect of great interest to a number of people who consider the potential of part-time workers as a transition phase, a gentle transition phase from full work to retirement, and see it as a benefit not only to the worker but to the employer and society at large.

Certainly the proportion of people with part-time jobs increases very remarkably with age. It suggests that there may be some phenomenon going on where there is some transition from full-time to part-time and out into retirement. However, if we plot these as a proportion of the population, the reality is that the numbers are quite small. It's just that the full-timers have left the labour market, and part-timers tend to stay in a bit longer.

I know you saw this chart on page 8 in an HRDC presentation recently. It's a chart on earnings. I'll go very quickly through it. The main message is that adult men, in terms of earnings in the labour market, had a long way to catch up but have done so compared to their younger cohorts. Older women, 55 to 64, have only very recently improved their earning situation in the labour market, not surprisingly a reflection probably of much higher and improved education and longer stays in the labour market.

On page 9 we're turning now to more of the aspect of risk of job loss. A great concern I think by a lot of observers of the labour market is that the nineties has been very unkind to older workers. We're looking in the data now for evidence of that perception. Here we have a chart that shows just net job change growth or decline in two different periods. The blue bars are the recession years of 1989-1993 and the yellow bars are since then. Certainly the situation for youth speaks out quite loudly. They lost more jobs than anyone else in both periods. But men age 55-plus lost a considerable number of jobs during the recession. However, they have made up that ground since then, which may not be all that well known. Older women, age 55-plus, actually never did lose jobs in net terms.

Actually behind these numbers, in terms of industry, it's also interesting to note that in net terms—not in individual job loss but in net terms—the bulk of the job losses over the nineties is actually for older workers in the public service. There were losses in manufacturing, but those have been made up—maybe not necessarily by the same older workers, but they have been made up. In construction there were major losses, and most of those have been made up, and they were a smaller percentage. So in absolute terms the public service has accounted for a fair bit of the reduction in employment amongst older workers.

We would expect that if things are dismal in the nineties, we would see the unemployment rate of older workers on a steeper trend upwards than younger age groups. If we look at chart 10, we don't actually see this happening. For men on the left, although the lines are rather closer than they were at some points in the eighties, there really isn't an escalation in the unemployment rate relative to younger adults. For older women, 55 to 64, there has been a convergence with younger women, maybe not with the representation we saw. They didn't have the net job loss. It probably more represents the fact that they don't tend to leave the labour market; they're much more attached to the labour market. Their behaviour in fact is becoming more like the male older workers.

On page 11, again, looking for evidence of the perception that this is a much more precarious labour market for older workers, we do tend to see a little bit of evidence. It's not dramatic. On the whole, when we look at the risk of job loss generally, contrary to popular perception, we really haven't had, other than cyclical change, a long-term upward change in risk of job loss for any group, except for the older group. Although it's not dramatic, rising to about 7%, this was a group that didn't experience job loss formerly. So I think that change has reinforced some of the perceptions of insecurity.

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So it's not all that likely to lose a job, but having lost a job, it's rather hard for an older worker, as we well know, to get back into the labour market, and the numbers speak for themselves.

On page 12, the percent not employed 12 months after job loss is very high, over 60%, for the older worker, and much lower for younger age groups. They tend to leave the labour market after that point. They tend to have long periods of unemployment, but eventually leave the labour market and get labelled “retired”. People who are in this group, particularly those who are of lower education, are in the Atlantic provinces and in Quebec.

Again, looking for some evidence that there might be a great push into retirement and that retirement might indeed be a disguised unemployment, we look to some of the reasons for retirement and compare the eighties to the nineties. You would expect, if it were disguised unemployment, to see many more people saying they're retired because of unemployment in the nineties. We see some evidence of this on page 13, “Reasons for retirement”. There has been a marginal increase in the number who said they retired because of unemployment. There's certainly been an increase in the number getting early retirement packages. It has become a more popular form in the nineties, but personal choice and health are still the leading reasons. The early retirement packages may or may not be perceived as a positive or negative outcome for a worker.

On page 14 we're looking at, in very general terms, of course... Once retired, a pension makes all the difference to your financial situation and your perception of whether or not retirement is welcome. In this graph this is not restricted to any particular age group; it's just showing general trends in terms of the incidence of pension plans for all age groups who are working at the moment. We see a general trend down for men and a slight increase for women, until the last year or two in which there's been a tapering off. This means that just under 50% of current workers are covered by pensions, which is not perhaps as good as we might like.

On page 15 we see whether or not there is a trend through the age cohorts. Are things going to get better or worse in terms of pension coverage of today's older workers and tomorrow's older workers? Clearly, of today's older workers, men are much more likely to have a pension than women—well over 60%—while a minority of women have a pension. The situation will improve as the next cohort ages into this older worker group for women and for men. Then for men it will actually deteriorate, unless the labour market has changed in the next 15 or 20 years for the youngest male.

Chart 16 reinforces a notion that nobody would be surprised about—those who make more. What we have here is the number of workers with pensions by their earnings. Of course, as earnings rise, the likelihood that you have a pension also rises.

This comes to the last of my slides. I wanted to just say a couple of words in terms of return to the workforce. There's a lot of flux. Retirement is very much a soft kind of concept. What does it mean? The only data we have suggests that about 13% of workers return to the labour market after retirement. That's the same in the nineties as the eighties. You might have expected an increase, but that has not been the case.

The Chairman: Forgive me, Madam Sunter. Unfortunately, we're being summoned right now for a vote. So keep your thoughts and we'll resume upon our return.

Please forgive our bad manners. Thank you.

Ms. Deborah Sunter: Not at all.

The Chairman: We'll adjourn.

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[Editor's Note: Technical Difficulty]

...details, but with the concerns we have in the nineties for older workers and some of the preconceptions we might have, when you look at risk of job loss, you see some evidence of a rise for a group that simply wasn't at much risk before, although I think to keep it in perspective, a 7% risk of job loss is not nearly as high as some people might think it is in terms of older workers. However, it's much higher when you get into particular groups, such as those with lower levels of education and those in particular parts of the country, especially the Atlantic and some parts of Quebec.

If we look at preparedness for retirement, we also have a mixed story, with groups of people who have a pension plan and perhaps a bit of a trend of future cohorts of male workers who won't have a pension plan unless their employment situation changes. It is a rather improving situation for today's and tomorrow's older female workers, not surprisingly, because they're bringing to the labour market higher educational credentials, moving into career-type jobs, staying in longer, and gaining a situation where they get higher wages and a greater opportunity to have benefits such as pension plans.

When we look into the future, we will have a very sizeable age group of 55- to 64-year-olds coming up in the next 10 to 15 years. Their educational profile on the face of it in terms of formal education will not be much different from younger workers. This may be to their advantage in terms of competition in the labour market, but there will be a considerable number. We will have I think a better idea as to the position of these workers in the next year or two when we have some results back from a new survey on assets and debts, which is really the only way we're going to know just how prepared today's adults are for retirement in the upcoming years.

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Thank you very much.

The Vice-Chair (Mr. Bryon Wilfert (Oak Ridges, Lib.)): Thank you, Ms. Sunter, for your presentation. We'll go to Mike Sheridan, director general of labour and household surveys, for your comments, and then we'll to go to questions.

Mr. Mike Sheridan: I don't have anything to add, Mr. Chair. I think the presentation is completed and the summary is done. We'll do our best to take questions from the committee members.

The Vice-Chair (Mr. Bryon Wilfert): Thank you. That's the best presentation I've heard since I've been here. Excellent. Very good. I wish they were all that short.

Madame Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): I looked with interest at the statistics you presented. I always remind myself that statistics are only statistics, and that they do not necessarily represent what people's lives are really like in Quebec, the Maritimes or the West.

How does Statistics Canada define an older person for statistical purposes?

You said that between the end of the 1970s and the beginning of the 1990s, the percentage of older people who had lost their jobs had changed slightly. Your statistics do not seem to take into account people who lost their job more than one year ago. Would you be able to identify them? Most of the time, these people end up on social assistance or have to sell their house or their car and draw on their bank account if the value of their possessions is estimated to be more than a particular amount. Do your figures which show that the likelihood of a permanent layoff increased from 5 to 7% take these people into account?

Mr. Mike Sheridan: I will try to answer your questions, if I may. We based our statistics on people in the labour force between the ages of 55 and 64. We could take the data we presented to committee members today and do new calculations that would take into account people age 50 and over, or 60 and over. The definition of older workers can vary considerably. For comparison purposes, we decided to use the definition used in other countries—which is workers aged 55 to 64. If you wish, we could compile figures for different ages and combine various pieces of information.

Your second question was about the transition from the labour market and the displacement of older workers. We did not have enough time to break the data down by province or by region, but that could be done. An analysis of this type would most likely give us some very different results by province and by region. We would be prepared to provide you with that information.

Ms. Jocelyne Girard-Bujold: I have looked through your statistics quickly, and I noticed that many people in the 55 to 65 age group had finished their post-secondary education, but that few of them had a university degree.

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In my region, as in most parts of Quebec and Nova Scotia, we find that factory workers experience different problems from people who work in a specialized plant. This group does not have a post-secondary education, and in many cases, these people do not even finish high school. They are between age 55 and 65 and find out that their plants have to lay them off because of technological change. They can't take the courses, because they have no background in the new technology, because it was not part of their everyday working lives.

Do you think there's another way of helping them? Did your statistics indicate some way in which governments could help them out? Rather than offering these workers training, did you identify any employability or financial compensation measures that would help them adapt, rather than forcing them into early retirement or retirement? What about work sharing? Did your statistics look into matters of this type?

Mr. Mike Sheridan: No, at the moment, it is not possible to do analyses of this type, but we could try to break our data down by region, by province or by employment category—for example blue collar workers and factory workers, who are the most affected by the transitions in the labour market and by layoffs.

You are right in saying, as the data we presented today seem to show, but the situation is more difficult for workers in this group who have to find a new job. Unfortunately, our statistics are not specific enough to allow us to state that conclusively.

Ms. Jocelyne Girard-Bujold: Your statistics are all very well, but they're not the ones I was expecting. We targeted older people in a very specific context. Just yesterday we met with workers from a mine in Cape Breton that will soon be closing down. Seven hundred and fifty workers will be laid off, most of whom are not of retirement age. They were not supposed to retire for two years. We are going to be hearing more and more about such cases. There's no point in hiding from the truth. We're up against the wall.

I quite like the data you presented, but they are not really in keeping with what these people are experiencing at the moment. Can Statistics Canada give us an accurate picture of the situation? Has it already collected some data it could use for this purpose, and could it update them? That is what I'm interested in.

Mr. Mike Sheridan: Most of the information available to date is for the provinces. We have a great deal of difficulty in drawing specific conclusions when we use intraprovincial samples.

Ms. Jocelyne Girard-Bujold: I don't think your statistics take these workers into account. We cannot send them home to do nothing; we cannot get rid of them. Some of them have health problems. They have always worked very hard in a factory, and they cannot get back into the labour market. Most of the time, these people did manual jobs. You could always train them and try to make them into responsible, model workers, but your figure should reflect things like the health, social and cultural characteristics of these workers.

Those issues do not seem to appear in your statistics. Your statistics don't help me force any government pay more attention to these workers. I can't use them to make specific demands of government. Are you planning to compile statistics of this type? Have you ever considered such an approach?

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Mr. Mike Sheridan: The data we collected in our labour market survey do not give us such specific details. I don't know how we could do an evaluation of this type, and collect data on health, culture and the labour market at the intraprovincial level, so as to have a clear idea of what is happening. I must say that at this point, the answer to your question is no.

[English]

The Vice-Chair (Mr. Bryon Wilfert): Thank you very much.

Mr. McCormick.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you very much, Mr. Chair.

When I hear the chair's remarks to our witnesses about how it's such an excellent presentation, I certainly respect what the chair is saying. I must admit I'm one of these older workers, and I find it very challenging to be in two places at once. Therefore, I came in a little late.

I had the privilege of hearing the minister say one evening—some of us did and some of us didn't—how one of his personal priorities in what he wanted to look at with HRD was to study the situation—the opposition might say the plight, and I might—of older workers. I really want to thank all those involved in starting in this direction—the parliamentary secretary and the committee, which I haven't been a part of enough lately—because it's so very important.

My small role here, coming from a rural riding... I'm now the chair of the government rural caucus. I'm thinking about natural resources and older workers, and I haven't had the time to study this material, and I certainly will look at it. A lot of older workers did not have a lot of education, and it's not for reasons of their own cause that they are now unemployed.

Back to my natural resources—and I'm wandering here. They followed the jobs, whether it be mining or forestry. Of course, forestry and lumber... I see more jobs come from the forestry industry than any other single industry in Canada today. That's a bit of trivia. But these industries collapse for different reasons in different town sites across this country, and then we have these often older workers there, and I feel sorry for them.

I remember campaigning on a particular street at a particular door on a tiresome night in 1997, and a gentleman about my age—maybe to make me feel good, he was three or four years older—came to the door and said “Larry, what can you tell me? What are you going to do for me? Where am I going to find a job?”

So my question for the witnesses, and to put on the record... I see these people losing respect for themselves sometimes. Their self-esteem is going down. The government has done a good job, most of us think, for young people and programs. As you're looking between the lines of all these statistics that you've helped compile and pull together, I'm wondering what you see as to how badly these people are falling between the lines and whether the government has been lax in having programs for these people.

Some of your charts show this, I'm sure, with the unemployment and the older workers and whether they go onto social assistance. What happens to these people? Are they just dropped between the cracks in the system? What are you reading here? What do we have available for these people? I'm afraid sometimes we don't have enough. If you have any comments that you could share with me...

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Ms. Deborah Sunter: As I remarked earlier, we see a very varied picture. There are some situations, and especially some locales, where one can hardly imagine even any opportunities opening up if there were certain kinds of programs, and in others those may be the most valuable things.

We know that those older workers who lose their jobs, who have the lower levels of education, who have very particular skills for certain industries have a very difficult time finding a new job. We also know that older workers or older people do not relocate as easily as young people, and that's important to consider.

I think the perspective on the data is—these are very broad strokes and we can't get into specific policies. That is not our role at StatsCan. Our role is to provide you with some of the basic facts, and those can be taken to make policy. So I can't be more specific than that.

Mr. Larry McCormick: Fine, and thank you.

Mr. Chair, I just want to think out loud. Our witnesses mentioned that we have to recognize—I'm not putting words in their mouths—what we do and what we offer for the relocation of displaced older workers and the fact that they may be more or less mobile. I'm thinking about Atlantic Canada and comments I've heard across this country about the people who have been on the TAGS program, pre-TAGS and post-TAGS, and I hear people saying they're milking the system. That does happen, but I know personally so many people in Atlantic Canada, and these people have spent their lives contributing to and building this country, and they would like to continue to feel worthwhile and continue contributing.

So whatever we can do as we study this... because these people were the salt of the earth. These were our forefathers and our relatives, and these people are the ones who need the results of any study that this committee is going to take on.

Mr. Chair, I'll pass on my time for now. Back to you.

The Vice-Chair (Mr. Bryon Wilfert): Thank you, Mr. McCormick. With the indulgence of the committee, we're supposed to end at 5 p.m., and since we lost about half an hour, I presume we can go on until at least 5.30 p.m., if everyone is willing.

All right. Ms. Brown.

Ms. Bonnie Brown (Oakville, Lib.): Thank you, Mr. Chair.

Thank you for this package. As my colleague across the way has pointed out, when I look at these charts, it suggests to me that there's really not too much to worry about, that mainly it's a continuation of a trend that has been going on in some cases since 1976. Yet all the anecdotal evidence, and maybe the effect of the media on us, suggests that older workers are having a terrible time. We were just talking about the fact that perhaps it's statistically pretty small, those people who are really having a hard time, but maybe geographically concentrated. So the news from those areas—and I'll just take, say, Thetford Mines in Quebec or some place in New Brunswick. It is a very serious problem there because of the concentration of people with maybe the same skill sets, low general education, and a lack of other jobs to move to. Would you say that's a fairly good snapshot of what you're saying here about older workers who can't get a job after a year?

Ms. Deborah Sunter: I think that's an excellent observation. Clearly, if a single-industry town is shut down and you tend to have older workers in that town, you're going to have a concentration of great difficulty and long-term unemployment, which may indeed eventually lead out of the labour market.

It is important to look at the aggregate numbers. They can be frustrating because they don't reflect the anecdotal situations and the personal situations. So I think the conclusion you draw is an important one, that in the aggregate it's not as alarming as all of the individual stories may suggest. However, in certain places the situation is considerably more grave than others. I think that would be reasonable.

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Ms. Bonnie Brown: If that's true, if you suggest that these people who are still unemployed after 12 months generally have a lower level of education, they have residence in an area of high unemployment, and therefore there are few jobs available to them—and I would suggest if they're older, they'd have less propensity to uproot and move to a totally different community—it makes me wonder whether we should try to retrain them, retrain for what and where in the way of a new career, or should we pursue a different policy response? I suppose that's a question for us, but I don't know if you have any other data that might give us a clue as to where to go with that.

Ms. Deborah Sunter: Not at hand. I think there may be some data sources that could be mined to give some hint as to whether or not retraining is a useful thing in some areas. I'm not aware of any conclusions that I could bring to the discussion.

Ms. Bonnie Brown: Okay. On to another topic for a minute. Under “Reasons for retirement”, these reasons are self-reported, are they?

Ms. Deborah Sunter: These are self-reported.

Ms. Bonnie Brown: I'm not sure I trust them, because if you ask a person whether they're retired because they were fired or laid off or if it was a personal choice, it's kind of embarrassing to admit that you are no longer wanted or needed. For your own piece of mind, it's a lot easier to say, oh, it's a personal choice, even if you hate it, but it's better than saying, I'm unemployed, or I was laid off; they don't need me. It's the same thing with the early retirement package. In other words, my guess is that the combination of health, unemployment, and early retirement are probably much stronger and more compelling reasons than personal choice. They're just harder to admit.

So whenever you have self-reporting, I think you run that risk of people telling you the most positive story about themselves as opposed to the most realistic one.

In spite of that, I wondered if you had thought of whether you might ask those kinds of questions the next time under self-employment rate: Are you self-employed because it was a personal choice, or because you were unemployed and you tried to create something to do, or, worse, because your job is the same? This is what I want you to find out the next time. You're doing essentially the same job. You used to be an employee, but your employer has offered you the chance to be self-employed, mainly to save himself paying EI premiums and CPP premiums and giving you a $2-a-week raise to offset that in his mind. But I think there are a lot of people who are self-employed because they have been removed from the status of employee by an employer who wants to save money. There are stories of nurses laid off from hospitals and rehired as self-employed contractors to come in and do exactly what they were doing before, maybe with fewer hours. There are teachers. There are small shop factory workers, 25 employees in a warehouse-type factory, maybe just packing things. One week they're employees with all the benefits and the next week they are self-employed contractors with no benefits.

It's very worrisome when in fact you go to the thing about who has a pension and who doesn't, in the sense that there are more employers who see an advantage to their own profit line by doing that to their employees. If it's not policed, that trend will increase and fewer and fewer people will have both EI coverage or CPP coverage, and that will account for the rise in a feeling of economic insecurity, like the one that was reported this week in the paper. I don't know whether it was a study by you or somebody else, but there is a self-reporting thing about feeling less economically secure, and it could be because people used to have three things: they used to have CPP being paid partly for them and partly by themselves; they used to have the chance of getting EI benefits; and they used to have a union. As soon as they become self-employed contractors and not employees, they sometimes lose all three protections.

So somehow or other I think we have to try to track why people are self-employed, despite the problems with self-reporting.

Thank you, Mr. Chair.

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The Vice-Chair (Mr. Bryon Wilfert): Thank you, Ms. Brown.

Mr. Vellacott.

Mr. Maurice Vellacott (Wanuskewin, Ref.): It is the whole matter of what it will look like as we go down the road ahead, I guess. How will retired workers in the future differ from today? What will that look like if you go down half a dozen or so years, a decade from now? How will that be different from...

Ms. Deborah Sunter: Again, a very large generalization is that their educational profile will look much more similar to younger adults. There will be a homogeneity in terms of the proportion with post-secondary education, for example. This is the last cohort, the current cohort of older workers, who are markedly different in terms of formal education. That doesn't mean to say that the skills and experience will be homogeneous, and I think that's important to point out.

We have to think about men and women in quite different ways. Their experiences are clearly very different, and especially older workers heighten these differences. The participation rate of older women now is around 30%, but it's bound to rise strikingly as we move through time. Even though their retirement age is also falling, just as it is for men, that mere influx of women who are staying in the labour market... and generally have done rather much better in the nineties. I think older women will be a much larger portion of the older labour market of tomorrow. They used to be, 20 years ago, 25%; now they're 37%. That is bound to grow considerably.

We've seen some evidence, but not conclusive evidence, that we may have a polarization in terms of those who have the benefits of pension plans and those who don't.

Self-employment is a good point. I was talking about trends for employees only, and we know that the proportion of self-employed workers is increasing. So amongst the self-employed, what is the situation in terms of putting money away in an RRSP? I don't have any evidence of that today, and I think we'll know that much better in a year or two when we have information back from the asset and debt survey.

Mr. Maurice Vellacott: So whatever adjustment measures we do now, this is, as you say, the last cohort in which those rules may apply or might possibly apply. We do this now, and there are going to be some different kinds of measures required coming up the road. For this last cohort, what are we looking at? The next 10 years and then the rules of the game will change?

Ms. Deborah Sunter: Yes. In about five years, the baby boom will be entering this age group that we've defined, and it's quite true, we can define “older” and could have cut it in many different ways. This seemed to capture a particular period in which transitions out of the labour market are very stark and there is more difficulty in getting replacement jobs. So the baby boom will be entering the 55-plus age group in about five years—a couple of years for the very front edge—and then it will swell, because the birth rate increased into the sixties.

Mr. Maurice Vellacott: What will be the adjustment measures that will be different at that point from what it might be for this last cohort? Because they have more education and those kinds of things, it's going to have an affect in terms of what adjustment measures you take.

Ms. Deborah Sunter: I wouldn't presume to suggest adjustment measures, but one thing we might consider is that these people will be a much larger share of the labour force, a much larger share of any skills and experience that are brought to bear in the labour market. One would perhaps want to take advantage of those experiences and skills.

I talked briefly about whether or not there was evidence of movement to part-time and slowly out of the labour market, and that may be one of the phenomena we'll see grow. I don't know whether it will without encouragement or whether anybody would want to encourage it. But it may be the kind of transition that you're talking about as a possible measure.

Mr. Maurice Vellacott: Greater computer literacy possibly and other kinds of literacy such that they may be easier to train, in a better position to relearn, take seminars, upgrade, this type of stuff?

• 1710

Ms. Deborah Sunter: The literacy levels and the ability to do mathematical and textual kinds of functions increase dramatically as we get away from the current cohort, I believe.

Mr. Maurice Vellacott: Once the sunset clauses and whatever kinds of measures are taken out... those don't remain forever. Needs change by that time.

Thank you.

The Vice-Chair (Mr. Bryon Wilfert): Following Ms. Brown's comment, the drop in participation by older workers up to about 1995, you have indicated, is now going up. Are we able to track what types of jobs? Are they part-time, full-time? What kinds of paying jobs are they?

Ms. Brown makes a very good comment that they become consultants and all these other things, but they don't have any benefits. Are we really creating a new class of poor older people? We talked about skill issues, as to whether or not we're able to break them down in that way in order to be able to see what the needs are and the fact that the baby boom was from 1946 till January 1, 1966. So the tail end are 32 years of age, which of course includes most of us in the room. Still, I think that's important in looking at that trend in the long term.

Ms. Deborah Sunter: Let me address the self-employment issue. It's largely a phenomenon of an older age group—older adults, older workers, 55-plus—but also those, say, 35 and over. It's not a phenomenon of youth. It hasn't grown much as a proportion of the employment of youth. Mind you, the growth rate for women has increased enormously. When asked for reasons for self-employment, and we do have some subjective evidence, the vast majority again give very positive reasons, and only something like 8% or so say they just couldn't find a job.

Because it's such an important phenomenon of job growth in Canada, and that's very different from the U.S.—absolutely different. Self-employment is now about 18% of employment. We've begun to do studies on any relationship to the cycle. Is it a result of unemployment? Is it disguised unemployment? The evidence so far does not support that, not in the aggregate.

More work needs to be done. More work needs to be done to understand how much it is the result of restructuring and outsourcing, a redefining of the employee into a contract worker. We plan to do more of that work in the next couple of years.

We don't have all the evidence, but we don't have any strong suggestions that a lot of this self-employment is a substitute for unemployment either at the moment.

The Vice-Chair (Mr. Bryon Wilfert): Mr. Scott.

Mr. Andy Scott (Fredericton, Lib.): Did I hear you just say that we're distinguished from the Americans in the context of the growth of self-employment as related to the provision of public health? People in the United States have to chase... They can't be self-employed because they don't have access to medical coverage. Is there any evidence of that?

Ms. Deborah Sunter: I guess we would conjecture that that might be one of the reasons. We don't have the evidence. We did a study last fall showing that 60% of our net job growth in Canada in the nineties has been in self-employment. Almost none of the net growth in the U.S. has been self-employment. The proportion there is something like 11%; here it's 18%. It's very different. There were a number of possible reasons that are now being studied as to their merit.

Mr. Andy Scott: When the HRDC officials presented earlier, they made the very conscious point that while we have a tendency to focus on age being the issue with regard to older workers, they said the defining issue is in fact the educational levels. It just happens that older workers have lower educational levels, and the numbers at that educational level, regardless of age, seem to be relatively consistent. It's just that that cohort has a higher incidence of lower education. You would support that?

Mr. Mike Sheridan: That squares generally with the notion of... If we think about these people in terms not of their age but when they were born, it helps put things in a little better context. Just with some quick math, the majority of these people were born in the 1930s and the very early 1940s. To look at what was available at the time, the sorts of educational systems they went through, the type of economy that existed at the time, that sort of defines a picture of what the majority of these folks look like.

I take the point that this is a bit frustrating when you try to look at it. It's like an impressionist painting. If you look at it from a distance, it's pretty clear. The closer you get to it, the blurrier it is. When you try to drill down into it, it gets a little fuzzy.

• 1715

We had a graphic that we didn't get into the package that we'll make available to the research staff here, which looked at the literacy skills of this age group. Statistics Canada does a classification of literacy and numeracy skills, and the majority of the folks that are falling into this age group who are in this population have lower levels of literacy skills—their ability to interpolate numbers, their ability to deal with prose, their ability to read instruction. I think those are two very different things, the education level versus your own skills and how you've learned to read and interpret and work with numbers, etc. But it is clear that this group does have lower levels of overall literacy skills, and 25% to 30% of these folks fall into what we call level 1 and level 2 literacy skills.

Mr. Andy Scott: Do I understand that you said that once this current group passes through the system, somehow this disparity in education will no longer be as great? I would have thought there would be another disparity just at a different level. All of the kids entering have a higher education, so there's a raising of the bar, but the bar is still on a grade that is relatively consistent. That isn't true?

Ms. Deborah Sunter: No, and I appreciate why you would think that, because we have a very high school attendance rate at the moment. What we observe now may change, if that attendance rate continues and more and more people come out with degrees who are in the very young cohort now. But what we do see is almost an evenness across the broad... Do you have university? Do you have a post-secondary certificate? Do you have high school graduation? As soon as this cohort has passed, it's almost even lines across those bands.

Mr. Andy Scott: You may have to change the categories to reflect the difference perhaps.

Ms. Deborah Sunter: You may also want to look at the subject matter studied, and I'm not trying to imply that there is an evenness in terms of the experience and skills and exposure to maybe high-tech kinds of education, that sort of thing. No. So we're talking a very broad brush.

One other point I wanted to make, though, if you're trying to make the point that the only difference... it's not a matter of age at all. I can't quite buy that, but we do know that employers do not invest as much in the training of older workers either. There are some stories behind that, I suppose.

Mr. Andy Scott: I don't think governments do either.

When the department appeared, we talked about the three different remedies and the three different approaches being passive, transitional, and active responses to the situation. I think it would be helpful to us as we try to decide which, in the course of the menu available... to have a sense, following on what Bonnie said, of the fact that there are probably areas where the response probably should be passive and other areas—and these would be geographic areas—where exactly the same circumstances would in fact elicit a very different result.

If you're living in Cape Breton and you own your home and you're 55 years old, my sense is you're best to stay there. The likelihood of retraining for a job is minimal because the unemployment rates are 35%, so the competition is greater. For exactly the same person living some place else it may be an entirely different response, which you're not going to be able to capture in a generic understanding of the situation.

Is that kind of information available that is geographically specific and that we could get so that we would have a sense of the kinds of regional responses that would be necessary?

• 1720

Ms. Deborah Sunter: Our data is much more reliable, clearly, at the provincial level. But we do have unemployment rates at regional levels. We do know a little bit in terms of long-term trends, if we look at annual averages, information about older workers in some smaller regions. I don't know how sensitive... but if you could take a prevailing labour market situation in an area, you might want to interpret that in terms of a different policy measure. I think we have some supporting information, but it's very generic. It would be unemployment rates and employment rates and industry distributions and that sort of thing.

The Vice-Chair (Mr. Bryon Wilfert): Following on Mr. Scott's comment with regard to skill level or education level, regardless, as people get older, whether they're more educated or not, mobility will still be an issue, and training will still be an issue, I would presume. The older you get, it's still harder to learn new skills, even if you have an MA or a PhD. The fact is, when you get older, it's difficult. Just because people are going to be better educated may not necessarily mean that those two factors will disappear.

We've come to the end of the first round of ten minutes. We go to five minutes and Madame Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold: I support Ms. Brown's view. She asked about the reasons given by workers who retired. In my region, there were some very well-paid factory workers, who were earning $28 an hour, who were laid off and who have used up their employment insurance benefits. What is going to happen to them? We don't know. They won't come and tell you to call them up so that they can tell you that they cannot retrain and find another job. That is why I have a lot of doubts about these statistics.

In your document entitled Labour Market Update, you say that around the year 2013, there will be an almost complete inversion of the age pyramid among working-age people. The year 2013 is not very far off, and the years go by very fast. Should we not be doing something today for these people, because there are more and more areas of unemployment in different parts of the country? My colleague from the Reform Party was saying earlier that many older people are losing their jobs in Saskatchewan as well. So this phenomenon is not unique to Quebec and the Maritimes.

You can talk about all manner of statistics, but what insight can your analysis bring to our work here today? How can we ensure that the problem does not have serious consequences and worsen in the future? How will we be able to react to these statistics that will be inverted?

Mr. Mike Sheridan: That is a very good question, but I'm not sure I can give you a good answer. In all publications, we try to identify the type of risks facing this group of workers. It is difficult to portray the situation accurately in all parts of the country, including Quebec and the Atlantic provinces. We can take into account factors such as the type of industry, the type of trade and the economic activity of a particular region, get results about their interaction with the labour market and determine the consequences of layoffs in a particular labour market.

Our data to date show that the outlook for older workers is good, but they do not enable us to identify the most appropriate policies for particular regions. This type of data is not very useful in this context.

• 1725

Ms. Jocelyne Girard-Bujold: These people who used to work in factories, in specialized industries or in the forestry sector, as Mr. McCormick was saying earlier, have acquired a particular expertise. I would call on governments to do something for them. Could they not help these workers who have acquired so much expertise over their long careers to retrain and find some other type of work? I don't know what can be done, but I'm very concerned about this.

I understand that we cannot necessarily hire them again in the same field so that society can continue to benefit from the expertise they acquired over the years, but at the moment, we're simply letting them go, and that's the end of it. This is causing social problems.

Mr. Mike Sheridan: Our statistics do not take into account the personal choices of workers who may have decided to move, to take training courses, and so on. Actions of this type have an impact on the labour market.

Ms. Jocelyne Girard-Bujold: Thank you.

[English]

The Vice-Chair (Mr. Bryon Wilfert): Mr. Scott.

Mr. Andy Scott: I'm interested in the notion that we've been encouraging people to leave early because of unemployment at the low end of the process, and we would want... as the demographics change and we end up with too many people in the older end, perhaps a shortage in many areas and, even worse, a failure to be able to sustain the upper end with the wealth that's generated on the lower end because of the demographic change. The early retirement phenomena will not help us. In fact, we'll be working against it, whereas now we have been sort of working for it. I think I'm making some sense.

If that were the case, then, it seems to me that our challenge is to make sure that the distinguishing feature, which seems to be education, is remedied. If we want people to be able to work, and in fact encourage them to work, then ultimately the distinguishing feature and the current cohort in terms of leaving or not or being able to work or not is educational. Consequently, it's going to be incumbent upon us to figure out some way to get people educated and then probably deal with this lifelong learning challenge of keeping them educated, particularly the farther removed from formal education. I presume the farther you are from formal education, the more critical lifelong learning would be. So we're going to have to come up with programs that will encourage people to continue their education if we want that older worker group to stay in the labour force, for their own good and probably for our own good.

Does that seem to be the challenge of the older workers of the future? For older workers presently it's a different thing—passive support and those kinds of things. The older workers of the future are going to have a whole different set of problems, and the nation is going to have a whole different set of problems to deal with as a result, mostly related to whether or not we keep them educated or allow them to remain educated. Is that fair?

Ms. Deborah Sunter: I think when we look at the large share of the potential labour force they represent, rather than finding early retirement a mutual benefit for downsizing and also a benefit for those who manage to get a decent package out of it, this may not be the answer at that time. I think you're quite right. That's why we were looking for evidence of maybe some shifts into more gradual transitions out of the labour market, in terms of part-time, for example.

Clearly education makes a very big difference at all ages to one's opportunity and chances and success in the labour market. It depends upon where you are, though, whether or not your lifelong learning is going to find a job opportunity in your neighbourhood and whether once you're 65 years of age you're going to want to pursue it.

Mr. Andy Scott: But the other distinguishing feature for an older worker is that the time since they had their formal education is greatest. If in fact the problem is changing skill requirements, that problem is less if you just left school than if you haven't been to school for 25 years. Therefore, the issue, the challenge, is going to be to make sure that that cohort is not always the group that is farthest away from their education, therefore most difficult to employ, if in fact we want to keep them employable and in the labour force. So the older worker challenge in the future will be continuing education as much as it is income, I think.

• 1730

The Vice-Chair (Mr. Bryon Wilfert): I'll go to Ms. Brown. Ms. Brown, this will bring us to the end of the five minutes. I'm going to be very liberal and give you a very short... after Ms. Brown.

Ms. Brown.

Ms. Bonnie Brown: We're inclined to focus on that low level of education area, high unemployment, etc., because that seems to be a problem that requires a public policy response. But I'm looking at your appendix—it doesn't seem to have a letter; it's page 34 of the Labour Force Update. I notice that as you go through the years, once you get beyond what should be the peak of a person's career, 45 to 54 years old, even if you have a master's or a doctorate, those who are employed full-time, as a percentage of the total group, begin to decline anyway after age 54. It's 81.5%—that's at the bottom of page 34, column 2—and then for 55 to 59 years old, only 68% of those highly educated people are employed full-time. At 60 to 64 it drops 20% to 48%, and then of course the efficiency of the mandatory retirement system kicks in and it drops to 20.6%. Of course, for 70 and over it's 6.5%.

So it seems to me that the participation rate of older workers in whatever level of education category they fit drops pretty drastically after age 54, and at accelerating rates in each grouping. Now I'm beginning to think that this problem is deeper than it has been defined to me. I'm inclined to think, as I say, of the asbestos workers in Thetford Mines or the people at DEVCO in Cape Breton, who have another complication in both cases, which is health, having worked in the particular environments they've worked in.

Now I'm beginning to wonder if what I'm noticing with the most highly educated people, let's say people with doctorates... if this lower participation rate isn't also reflective of what I call ageism, as related to say, sexism—the less likelihood of people to get a job simply because of their age. In other words, if we lived in China, it would seem to me, a person who's 70 with a doctorate would still be highly valued—maybe not paid the complete salary for heavy work, but brought in as say a scholar in residence and all those kinds of things, because of the value they put on older persons just by their culture, whereas our culture, being youth-oriented... Of course, you haven't got anything to measure that, but I'm quite amazed at the lowering of the participation rate in the labour force of people with the highest education we can define here, which is master's and doctorate.

Do you have any explanation for it other than that?

Ms. Deborah Sunter: For one thing I don't think you can interpret it necessarily, without digging much deeper, as an entirely negative phenomenon, at least in the perception of many people over some time. You may call this ageism, but there was an expectation perhaps of more leisure time, and perhaps that was considered a reward. If you were seeing a concomitant rise in the unemployment rate, you would know this was hardship. When you see a drop in participation in employment rate, you can't assume that it's all involuntary, especially in terms of these higher education groups.

We know we've had some white collar unemployment, and older worker white collar laid-off people would have a much harder time, and that's a great shock. But that's a small proportion of the explanation behind the dropping employment rate. I think the availability of pension plans is a more likely explanation.

• 1735

Ms. Bonnie Brown: I'm hearing self-reporting problems, that people have to admit that they're having to do something they wouldn't have chosen, the phenomenon I pointed out earlier. They may be people who claim “oh, I'm lucky, I took early retirement. I have a master's degree, I have a doctorate, but the university didn't need me any longer.” They report it as positive and they're trying to make the best of it, but really, given their druthers, they might have preferred to stay on teaching at the university or working in a lab, or whatever it is they were doing with their high education, if the employer had been willing to keep them.

Mr. Mike Sheridan: I think your earlier comments on this... if you put these two tables together, I think you might have an interesting optic on this, because I think if you looked at this table for the reasons for retirement by education... I don't know, I'm going to go out on a limb here. I think we should run this, but you'd see a polarization in there, and I think you would see, by far, some of the things Deborah alluded to, that personal choice becomes much easier for—

Ms. Bonnie Brown: If you have the money to cushion it.

Mr. Mike Sheridan: —if you have the money to cushion it, and there's a relationship between education and money, etc. So I think that bears some more work.

Ms. Bonnie Brown: One more point. It's not a question, just a point. The thing is, you're espousing what is the current orthodoxy, which is that people who have some level of comfort and are offered early retirement, or are even let go, think “Oh good, now I can work in my garden, or go to Florida”, whatever it is, and they put a positive spin on it because that's healthier and they've got the money for the choices. But when you consider the productivity issue, which is facing the country—that is, getting the most out of the educated brains we have and this whole spin between skilled, medium skilled, and highly skilled people is the mix that makes the economy go—I have to wonder why so many of our highly educated people are not working, let's just say, between 60 and 65. I think it's worth exploring from that perspective.

Mr. Mike Sheridan: I agree.

Ms. Bonnie Brown: Thanks, Mr. Chair.

The Vice-Chair (Mr. Bryon Wilfert): I presume many of these people who are now unemployed are... An article in Macleans magazine in 1960 said that we would have so much free time, according to futurists, we wouldn't know what to do with ourselves. I presume most of them are unemployed futurists, given the fact that this did not happen.

We're going to wind up. Madame Girard-Bujold, a very, very short one.

[Translation]

Ms. Jocelyne Girard-Bujold: Do you have on hand any statistics that would help identify things we could do to offset and slow down the loss of jobs among people in this age group? I'm thinking of shared work, progressive retirement or other such active measures.

Mr. Mike Sheridan: It would be possible to give an accurate picture of the interactions that go on in this group. Although we do not have that information available, we could prepare a paper for committee members.

Ms. Jocelyne Girard-Bujold: I would appreciate that.

[English]

The Vice-Chair (Mr. Bryon Wilfert): On behalf of the committee, I'd like to thank our witnesses from Statistics Canada for being here today. I'd also like to thank our committee staff.

We will adjourn.