Action Plan for an Aging Population

By Patrick O’Brien (AIMS on Campus Student Fellow) 

The Government of Nova Scotia is leading a new proposition to change how we think of the aging population, the benefits provided, the obstacles surrounding “aging” and the impact it has on our economy. By 2030 the Government of Nova Scotia estimates that one in four people will be over the age of 65, which shows a major change in demographic we will have going forward.

The “SHIFT” plan will make investments in transportation and affordable housing for those who want to retire in their own communities. It will seek to promote health and wellness, and promote participation in the labor market as the primary objectives. This is all capable with $13.6 million committed to the plan by the Premier Stephen McNeil with as many as 50 objectives to be completed by the end of 2020.

There are many positive aspects of the plan that could help the economy and community. Increasing the participation of older adults in the labor market lowers the unemployment rate for the province, which is 8.7% compared to 6.3% for the rest of Canada. It also brings experience and wisdom to these roles, not to mention that because there is such a large presence of older adults in many rural communities of Nova Scotia, it could increase competitiveness for the small businesses that adopt the hiring of older adults.

Another benefit of the plan is promoting healthy living, including exercising lessons. This also limits social isolation, which in a finding by the SHIFT program was found to increase the likelihood of smoking, drinking, and enabling the individual four to five times more prone to hospitalization. Implementing these strategies and educating the public on the matter will reduce the chances of an elder adult going to the hospital and therefore reducing healthcare costs.

Notwithstanding, there are many obstacles facing this initiative.

The main challenge for the SHIFT program will be the encouragement of older adult employment. First the employer may believe that the older adult is less productive than a younger hire, or may not want to pay the premium for workers compensation to the employee if he/she was to get hurt on the job. From the outlined reasons above, for example when the Government of Nova Scotia stated it “will work with employers” it could be assumed that some sort of training cost to mentor employers during the process will be a part of the program, or potentially a subsidy for said employment, however this is yet to be confirmed.

Should there be a subsidy for the employment of the elderly, this would increase the number of older adult hires, and would limit the hiring of younger employees and immigrant workers as well. Although this does improve the cost efficiency of hiring for the employer, one could argue it may not be as effective as hiring a younger, and more energetic and motivated individual. This would create an uncompetitive hiring process, limiting the number of new participants added to the labor force 15 years of age and older looking for work but are unable to acquire employment. This could factor into an increase in the unemployment rate.

The SHIFT program will be a positive step forward for the economy in Nova Scotia by better involving and demonstrating the importance older adults have in our economic development, in addition to the wisdom and experience they can share to improve our quality of living through labor participation, volunteering, and mentoring. However, and arguably most importantly, it will be of great interest to see how the government will maneuver around the many challenges this program will yield, in addition to implementing the necessary change.

$15 minimum wage would be bad for the Atlantic Provinces

By Henry Gray (AIMS on Campus Student Fellow) 

Growing up in New Brunswick, the local McDonald’s provided a perfect entry into the labour market and an excellent way to begin to earn income for myself to save up for university. My job at McDonald’s taught me general, transferable skills to prepare for a career: work ethic, time management, teamwork, and customer service. As eager as I was at 14, the majority of my spare time was occupied by personal endeavours such as listening to indie music, and most of my mental energy at work to thinking up ideas for songs to write. Many of my colleagues were well worth the wage, but my efforts were not worth much more than the $9 an hour the province mandated that my employer pay. Certainly not the $15 an hour rate that minimum wage workers in Alberta are slated to enjoy as of October 2018.

 

So what would have happened to me had New Brunswick set the minimum wage at $15 while working at my local McDonald’s? In the best-case scenario, I would have been paid $15 an hour for singing between serving customers at the cash register. In the worst-case and far more likely scenario, and indeed this has been the reality for many minimum wage workers, I would have been out of a job.

 

As Matthew Lau and Marco Navarro-Génie discovered in their paper “Revisiting the Minimum Wage in Atlantic Canada” (2017), minimum wages, which have only gone up over the past several years and are slated to continue to do so, hamper the ability of young people to gain employment and to acquire employable skills.

 

The Atlantic Provinces hold the dubious distinction of having the most people per capita at or near the minimum wage in Canada. This is indicative of a weak economy, and the result of raising the minimum wage will thus be felt most severely here. While labour unions and anti-poverty activists have been known to suggest that raising the minimum wage will help unskilled workers and the poor, this policy will, in fact, disenfranchise and marginalize them even further. Some members of this already vulnerable population may be subject to the loss of their jobs, as their employers may not be able to afford to keep them on at an artificially inflated wage, while others may be prevented from entering the labour force altogether if their labour is worth anything under $15 an hour. To be certain, those who keep their jobs will be making more money, but for those who do not make the cut, a minimum wage hike represents unemployment rather than a pay rise. Moreover, my former employer, McDonald’s, has produced out self-serve kiosks, part of a trend towards automation that will only grow more widespread as minimum wage hikes drag labour costs upward.

 

Rather than reducing income inequality and empowering marginalized people, the minimum wage actually hurts those it is intended to help. It increases unemployment among the lowest skilled members of society, leads to greater demand for government welfare spending, and causes economic growth to falter, leading to less economic opportunity for all.

 

As Lau and Navarro-Génie recommend, provincial governments would see far better results by reducing the barriers to employment, raising the basic tax exemption, and unleashing the private sector to allow it to create jobs and wealth.

 

Legislating further increases to the minimum wage would actually further increase youth unemployment and exclude many unskilled workers and those in a lower socio-economic class from the labour force. Young people in Atlantic Canada are far better off given economic opportunity to better themselves, to learn skills that can be further developed later, to learn how to manage money, and to contribute to the economy.

 

Singing a Different Tune and Embracing the Unknown

Cape Breton Island has a rich culture and fascinating history, matched only by its scenic routes and picturesque landscapes. The Island is highly sought after by vacationers searching for a new spot and golfers looking to play a few rounds at the famous Highland Links Resort. In addition, it is renowned for delicious seafood, hearty people, and, perhaps most importantly, the infamous “East Coast Kitchen Party,” which is an organization that promotes Atlantic Canada’s art scene.

Tourism Nova Scotia and the Government of Canada touts this embellished description of Cape Breton Island, however, it conflicts with a harsher reality: 16 per cent unemployment rate, reliance on government transfers, and a median income well-below the national average–in 2012, $26,160, compared with $31,320 nationally. Furthermore, several rural towns have disappeared, poverty is on the rise, and thousands of Nova Scotians have left the province for a better future.

Fixing these issues requires a momentous shift in the mindset of Nova Scotians and their elected officials. A different approach to natural resource development, for instance, may be the most helpful.

Cape Breton Island, and, in general, Nova Scotia, have a tremendous supply of natural resources, from oil in George’s Bank to natural gas in the Lake Ainslie area, not to mention coal deposits spread throughout the province. There are multiple local groups, however, that have convinced the public that natural resource development is not worth the risk, culminating in the decision to extend the moratorium on hydraulic fracturing indefinitely. Prohibiting all things that carry risk is a dangerous mindset, though. On one hand, residents of Nova Scotia demand jobs, and on the other, shun opportunities that would produce them.

Cape Bretoners must begin to sing a different tune. Industry experts suggest that hydraulic fracturing–colloquially known as “fracking,” could generate nearly $1 billion annually in the province. Former “ghost towns” in Pennsylvania, for instance, have begun booming due to natural gas development in recent years: the unemployment rate in the state is 5.6 per cent, compared with 6.1 per cent nationally, and as a whole, the industry supports roughly 1.7 million jobs in the country. Moreover, natural gas is a much more sustainable and environmentally-friendly alternative to coal and oil. Lastly, the correlation between fracking and earthquakes is weak and instances of pollution occurred due to breaches of government regulation.

Although there are risks associated with fracking, as is the case with any venture, those who are concerned about them exaggerate their scale and probability. Instead of banning the practice, the sensible approach would have been to mitigate the chance of disaster through sound regulation. Furthermore, natural resource development can provide support for local communities. In the United Kingdom, for example, the chemical firm Ineos offered local communities 2 per cent of profits from wells in the area to support hospitals and parks, and 4 per cent of profits to residents who own land near drilling sites. Greenpeace described this practice as a “bribe,” however, it is a common one in the United States that has delivered massive benefits to local communities. A similar approach in Cape Breton Island, and in Nova Scotia, could benefit communities tremendously, and a sound regulatory regime would reduce the risk of environmental damage.

In addition to the picturesque landscapes in the Tourism Nova Scotia commercials, the province should hoist an “Open for Business” sign. At least we could then start to improve the lives of Nova Scotians. In the meantime, however, shunning all, and every, opportunity to create jobs and generate economic growth will reinforce the status quo.

Corey Schruder is an AIMS on Campus Student Fellow who is pursuing an undergraduate degree in history at Cape Breton University. The views expressed are the opinion of the author and not necessarily that of the Atlantic Institute for Market Studies