THE DAWN OF A NEW OLD AGE
Mandatory retirement at 65 is a concept that itself could soon be retired,
PROF. GLORIA GUTMAN has the kind of credentials that should guarantee a long, fruitful stay at the peak of her profession. She developed and directs the highly regarded Gerontology Research Centre at Simon Fraser University in Burnaby, B.C. She’s written or edited 20 books and more than 100 scholarly articles on such issues of the elderly as housing, environmental design, dementia and long-term care. Her work is recognized beyond Canada’s borders—she’s president of the International Association of Gerontology, representing organizations in 60 countries.
Gutman’s problem is this: on July 17 she turns 65. At SFU, as at many institutions and workplaces across Canada, that’s the age of mandatory retirement. Happy birthday! Here’s your watch, there’s the door. One day she’s 64 and an internationally respected member of faculty. The next she’s too old—how weird is this?— to be employed as an expert on aging. “I find it odious indeed,” she says with an exasperated sigh. “I’m not tired. I’m not bored with academia yet. It just doesn’t make sense to me that we should not be judged on the basis of our competency at whatever age we are.” Gutman, like many women, worked part-time without full benefits or pension while her three children were young. Her desire to work past 65 is a matter of choice, she says, but for many women it’s an economic necessity. She and other like-minded professors are considering a legal challenge of SFU’s 65-and-out rule. Meantime, she’ll reluctantly sign a post-retirement contract to allow her to stay on as director for at least another year.
Percentage of all seniors aged 65 and older who are still in the labour force:
Employed seniors as a percentage of age group:
SOURCE FOR ALL CHARTS: STATISTICS CANADA
‘YOU get your gold watch and then what you do is retire and play golf? I don’t think it’s a healthy or creative concept.’
Forced retirement is also sparking a brain drain. Award-winning economics professors Charles Blackorby, 65, and his wife Margaret Slade, 63, left the University of British Columbia last year for the University of Warwick in England. “Mandatory retirement was a major factor in our decision,” says Blackorby from their new base in Coventry. “The age of [academic] retirement in the U.K. is 67. The pay is better, the teaching is less and we get to work two years longer, which changes our retirement income picture quite a bit.” In Gutman’s view, Canada is tossing away a valuable part of its labour force. “It’s insane when you figure what life expectancy is today,” she says. “Plus, you look at demographics and realize that fertility rates are dropping. We need everybody to work who can work.”
Increasingly, opinion leaders share that view. Mandatory retirement, once a hallmark of a prosperous and civilized society, now seems doomed by demographics. With too many old people and too few young, something’s got to give. Canada’s 65-year-old Prime Minister Paul Martin wants an end to mandatory retirement. Bank of Canada governor David Dodge calls the policy “silly” in the face of a coming labour shortage. Ontario will consult this summer on ways to end forced retirement. “When you reach the age of 65 in Ontario, you should make the decision as to whether you want to continue to work,” says Premier Dalton McGuinty.
McGuinty, 48, is part ofthat vast, blessed, demographically domineering baby boom, the post-war population with the softest hands in Canadian history. There’s no small irony in the fact that members of this generation seem destined to work longer than their parents. It’s a notion that sends chills down the aching backs of some labourers bent over factory assembly lines, or trapped in cubicleland, counting the months until the pension kicks in.
Ceaseless toil, it seems, is an idea whose time has come. Again. Bye-bye leisure society, we hardly knew you. And good riddance, says Thomas d’Aquino, president and CEO of the Canadian Council of Chief Executives, the Ottawa-based lobby of Canada’s largest corporations. While the council hasn’t taken a position on mandatory retirement, the 63-year-old d’Aquino certainly has. “You get your gold watch and then what you do is you retire and play golf?” he says. “I think that’s a very outdated concept. I don’t think it’s a healthy or creative concept. My definition of leisure is to be able to do what you want as opposed to the ability to do nothing.”
Some see lingering longer in the workforce as an economic imperative. Forced retirement and early buyouts make no sense for employers in the face of a looming labour shortage. As for workers, recent polls show mounting public doubts that their government or company pensions will be there when they retire. For that matter, as life expectancy stretches into the 80s, is 60 or 65 too young to collect a full pension? The U.S. and several cash-strapped European countries now think so.
For some critics, forced retirement is simply unfair: why is age the last bastion of socially accepted discrimination? “Nobody has a shelf life,” declares the Ontario Human Rights Commission, which set the agenda in that province with a 2001 report calling for an amendment to the rights code to make mandatory retirement illegal. Chief commissioner Keith Norton says society has changed since 1990 when the Supreme Court of Canada upheld mandatory retirement as a justifiable limit on constitutional rights. Among the arguments considered by the judges—themselves with a mandatory retirement age of 75— was that older workers blocked the young from the workforce. Most economists dismiss that as invalid, saying the economy creates as many jobs as there are workers to fill them, as it did when women entered the workforce. In any case, young people will soon be in short supply as the population ages. Ontario alone will have some three million people 65 or older by 2021, double the number in 1998. Careers and families are starting later in life, why not retirement? Norton, 63, jokes that he’s at risk of a conflict of interest, but he’s adamant the public wants “the dignity of planning their own retirement according to their needs and resources.”
Organized labour is not inclined to agree. Many union leaders see the issue as an assault on hard-won collective agreements and pensions—an attempt to roll back progress to the worst days of the Industrial Revolution, an era in which you retired when your heart stopped beating.
Wayne Samuelson, 52, president of the Ontario Federation of Labour and a former worker at a Kitchener, Ont., tire plant, remembers rubber workers striking to win the right to retire after 30 years. He doesn’t want such advances eroded. The dubious freedom to work longer to make up pension or benefit shortfalls is a “cop-out,” he says. What next, a 60-hour week, he asks. “I believe I’ll still be around to receive phone calls from reporters to debate whether we should be removing access to pension benefits up to age 67 or 69.1 really do see this as the first step.”
AN INCREASING SHARE
By 2026, there are expected to be 7.8 million seniors in Canada, accounting for 21.5 per cent of the population, up from 3.9 million or 12.6 per cent of the country in 2001. Canada’s projected population (in millions):
Samuelson says the debate to kill mandatory retirement in Ontario seems over before it began. “The Liberals promised to do this as part of their election platform,” he says. “My guess is it’s probably the only election promise they’re going to keep.” The “emotional appeal” of a 64-year-old who wants to keep working is hard for the union to counter, he concedes, but he doubts the public appreciates the sweeping ramifications of the issue. If age isn’t the criterion for leaving the workforce, performance will be. Older workers, with higher insurance and disability costs, will be fired at the first dip in productivity—an uglier end to one’s working life, he warns. “You’d have to be living on Mars to not expect that employers will find ways to get rid of people.”
If you haven’t noticed the start of the retirement debate, perhaps you’ve been too busy working. Get used to it. Mandatory retirement is already banned in Australia, New Zealand and, for a generation now, in the U.S. Americans have already taken what some predict, and others fear, is the next logical step—they’ve raised the eligibility age for a full government pension to 67 from 65. Even that may not be enough to spare an aging America from disaster, warns U.S. Federal Reserve Board chairman Alan Greenspan, a 78-year-old poster boy for the wrinkling of the international workforce. The leading edge of the baby boom starts drawing retirement and medical benefits in 2008, a hit the U.S. economy can ill afford, Greenspan told a Congressional committee in February. He advocates cuts to inflation indexing and raising the eligibility age for Social Security in advance of the boomer wave. “This is a much larger problem than we can basically handle,” he says.
Canada faces a similar demographic bulge and some of the same economic challenges, says Jonathan Kesselman, 59, a professor of public policy at Simon Fraser University and the author of Ti?ne To Retire Mandatory Retirement, a paper he’s writing for the C.D. Howe Institute think tank. Currently, four people work per senior; by mid-century there will be just two workers per senior, a shift that will have a huge impact on the economy and labour supply. “It makes little sense that average retirement ages have been declining at the same time that lifespans have been rising, health status of older persons improving and the physical demands of most jobs falling,” he says. “A person entering the workforce at age 22 and retiring at 61 is spending just 39 years at work, barely half the lifetime.”
‘A PERSON entering the workforce at 22 and retiring at 61 is spending just 39 years at work, barely half the lifetime’
The Canada Pension Plan appears sound for at least the next 75 years, due to a substantial jump in contribution rates, but Kesselman questions if a heavily retired Canada can afford such tax-funded benefits as old age security and health care. He wants politicians to screw up the courage to phase in an increase in the age for full pension benefits as the U.S. has done. “The trade-off means having a retirement age of 66, 67 or 68 as to when you get your full benefits, but having reasonable access to good quality health care.” The alternative, he says, is “a pension at 65 and having all kinds of delisted services and massive waiting lists for really serious illnesses.”
WHO’S SOLDIERING ON
In 2001, 305,000 seniors were working, up 20 per cent from 1996 when 254,000 were still on the job. Some of the most popular careers for seniors:
OCCUPATION NO. EMPLOYED
Retail sales clerk_10,575
THE SWELLING RANKS OF RETIREES
The current median retirement age is 60.6 yearsan age the oldest baby boomers will start reaching in 2006. Statistics Canada has calculated the “near-retirement rate”-the percentage of workers within 10 years of the median retirement age.
Raising the pensionable age may not be on the political agenda, yet. But offering the choice of an extended working life certainly is. Age-based retirement is already banned to varying degrees in all three northern territories and in Manitoba, Quebec, Alberta and Prince Edward Island. Employers can still punt workers of pensionable age in the other six provinces.
‘BOOMERS can expect to live long enough to be a problem not only for their children, but for their grandchildren too’
Age 65, in fact, is increasingly irrelevant as a retirement date. Half of workers are now off the clock before age 61. And at the other end of the scale, a new Statistics Canada study estimates 305,000 people 65 and older were employed in 2001—almost a 20-per-cent increase in five years.
Patt Noga, executive director of the 50-plus Job Bank in Winnipeg, sees such people every day. Manitoba ended job discrimination by age in 1974, and the people Noga places today are neither shy nor retiring. Some have collected buyouts only to seek work when the money runs low, or when they start climbing the walls. “A lot of them have skills they still want to use, they’re proud of them,” she says. Most clients are in their late 50s, as Noga is, but those over 65 are accorded equal treatment. Besides, these days it’s hard to tell the age difference, she says. “They’re not somebody you would visualize as ready for the rocking chair.”
Over the years, as conditions have improved, a Canadian baby has had a longer and longer life to look forward to.
PROJECTED LIFE EXPECTANCY AT BIRTH FOR BABIES BORN IN THE FOLLOWING YEARS
*LIFE EXPECTANCY ESTIMATED
HOW LONG HAVE YOU GOT?
Statistics Canada has crunched the numbers for its 1995-97 complete life tables to figure out, on average, how much longer Canadians of given ages were likely to live.
A case in point is her 62-year-old husband, Brian Noga. By day, he’s an accountant for a Manitoba regulatory agency. By night, he’s studying to become a certified general accountant. “I’m probably going to have to work until I die,” he says with remarkable good cheer. Part of the reason is financial. Like many Canadians, he hasn’t saved enough to live on, a situation worsened when his technology stocks took a plunge. Then, too, he sees retired friends for whom the high point of the day is reading the newspaper. Working keeps you sharp, he says. “If you just sit back and vegetate, everything starts to fall apart, your mind and your focus. I don’t want that to happen.”
The end of mandatory retirement may be inevitable, but it’s no panacea for the coming skills shortage, says Vancouverbased demographer David Baxter, executive director of the Urban Futures Institute. Those who keep working tend to be their own bosses, entrepreneurs and especially farmers. The kind of people, he says, with “nobody to give you a gold watch.” Those retiring early are a more dominant social force: often teachers, nurses, firefighters and other public servants with indexed pensions. Baxter, 58, and a first-wave boomer himself, predicts the ranks of the early retired will soon swell as boomer husbands gaze lovingly at their working wives, and do the math. They’re Canada’s first substantial bloc of couples with two company pensions to play with.
Boomers, having never acted their age, aren’t likely to start now. If age 65 becomes the new 50, does that make work the new retirement? Not likely. A generation notoriously averse to heavy lifting is apt to define retirement on its terms. “Babyboomers,” Baxter and colleague Andrew Ramio note in a report on life expectancy, “can expect to live long enough to be a problem not only for their children, but for their grandchildren and great-grandchildren, too.”
Optional retirement, freed of the arbitrary restraints of age, is apt to be taken in instalments: a bit of play, perhaps a spot of volunteer do-goodery—and just enough work to keep the economy from collapsing upon their frantically toiling children.