An aging economy

Yesterday, Statistics Canada announced that for the first time in our country’s history, people aged 65 and over outnumber the group of the 0-14.  Experts picked up on this and even analyzed that our country is aging at a very rapid pace, saying that by 2024, people aged 65 and over may very well account for 25% of our population.

When such a thing happens, there are important consequences:

  • The burden on the health system becomes very difficult to support
  • Economic growth is near impossible (if there is growth, it’s very weak)
  • People get to have to work up until a much more older age

Japan is an example of an aging economy.  It has unfortunately gone through multiple recessions and it’s quite possibly heading into yet another recession.  Not that the aging population is the only reason but it sure doesn’t help.  And it sure shows a strange pattern that aging economies have much more recessions and economic problems.

The same experts that were describing the aging economy problem were also saying that such economic systems need to be stimulated if we hope for any growth to be achieved.  Stimulating the economy basically means investing into projects that will generate jobs and growth.  Stephen Harper is not doing or planning on doing this.  By wanting to balance budgets at all cost and keeping the taxes low, he’s betting that the private sector will be able to bank on these principles and generate jobs and growth.  This is not going to work unfortunately.  This is just hoping a problem will solve by itself.  The problem we’re facing and too deep and touches too many fundamental principles that it just can’t solve by itself.

In the other hand, we have parties right now that are proposing we invest right now into our economy and generate growth and good jobs.  This is perhaps a better approach than the “hope for the best” approach Stephen Harper is proposing.  We need a government who will help families.  And trust me, it’s not a 160$ per month check that will accomplish this.  On the grand scheme of things, young couples will not make the decision of having children based on 160$ per month.  This is just not enough.  If Stephen Harper had proposed tax cuts that would benefit everybody, that 160$ combined with the tax cuts would be a good step.  However, Stephen Harper is proposing that we implement income splitting to save up to 2000$ in tax.  Well, unfortunately, the 2000$ in tax cut plus the 160$ (that we have to give back partially) will not allow a young couple to provide for a child.  In today’s world, for a young couple to provide for a child, you basically need two good jobs.  Just one of the two jobs at minimum wage is not going to be enough if the other job is at the average salary.  The 2000$ and the 160$ a month will not cover enough.  As well, with the poor quality of the jobs Stephen Harper has created, we see couples having children at a much more older age, sometime causing couples to have only one child.  In order for a young couple to have children, you need the following conditions:

  • two jobs at the average salary
  • two jobs that are stable.  That means that both spouses need to have a certain level of confidence that they will not lose their job in the near future.  This is perhaps the most important factor.  I’ve often heard of women waiting to get to be permanent before having children because they were afraid that they could not find work when they would want to get back to the job market.  And even today, there is no such thing as permanent positions, even within the government.
  • reasonable work schedules.  Hectic work schedules just makes it impossible for a young couple to commit to children.  As well, we often see people having to work two jobs to make ends meet.
  • affordable housing.  This is also important.  Young couple will often wait to own a house before they have children.

Now, look at what Stephen Harper is proposing and tell me if there’s any condition being met.  The answer is no.  Therefore, young couples will not have children at the pace we would need to sustain our economy and our population.  Even worse, those of us working right now might not be able to enjoy a retirement at all.  We need a government who will work on those 4 essential conditions mentioned above.  To some extent, the Liberals are the closest we have seen.  They’re sure willing to put the necessary money to at least meet the first three conditions.  The NDP are claiming they want to create good jobs and are also making interesting proposals.  The daycare program they are proposing has proven to be positive in Quebec, despite relatively high cost.  The economic boost created by women going back to work rather than staying home is to be considered.  The Conservatives are doing quite the opposite.  TFSA accounts and income splitting are in most cases favoring people who are retired or close to retirement.

One could also argue that immigration might be a solution.  Yes and no.  With immigration, you have to be careful on accepting people who will become productive members of our society.  It’s also important to accept people who will adhere to our basic values.  We can’t just attract enough people and accept them at a pace that is fast enough right now.  Furthermore, our population has fears right now (some are legitimate while some are somewhat overreactions) which we must respect and reassure our population on.  Harper is certainly not working on increasing immigration right now.  He doesn’t have enough manpower (because he’s made cuts) to evaluate all the candidates.  He doesn’t have the necessary programs in place either to properly great the new arrivals and make sure they adapt as fast as possible.  This is why he’s keeping immigration low and this is why immigration just won’t be enough to change the tides on our aging economy.

In this election, we have an opportunity to act now and put in place a government which has the vision of helping out young families.  This is our future.  We need to have children who will sustain our society of tomorrow.  Now, ask yourself who has been coming forward up until now with proposals to help out young families.  Stephen Harper is just not in the game on this important subject.

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