Friday, November 23, 2007

Workers of the World, Where Are You?

Halifax Sunday Herald column, November 4, 2007

“The thing to do,” says Jim McNiven, “is to let the States do the screening for us. Tell them, when they find illegal immigrants working in factories or warehouses, don't ship them south to Mexico. Ship them north to us. We need them.”


Big Jim McNiven is only half joking. That would be Dr. McNiven to you, sonny, the august personage who was once the provincial deputy minister of development, and later the dean of the Dalhousie management school. He's standing before a crowd of 200 at an Assembly of Leaders convened at St. Mary's University by Novaknowledge, the advocacy group which speaks for Nova Scotia's knowledge economy.

Big Jim is talking about Nova Scotia's looming economic crisis – too many jobs, not enough workers.


Look at the numbers, says McNiven. Nova Scotia will run out of workers completely in about eight years. Our economic policies and structures, rooted in the last century, are all upside down. They assume we have a surplus of workers and a shortage of jobs. But those days have vanished.

This dramatic change results from a low birth rate during the past generation. To sustain a population, you need 2.1 births per fertile woman. Nova Scotia's rate is 1.39. The Canadian rate is 1.5. The developed countries all have low rates. European nations range from 1.0 to 1.9. Many countries offer hefty baby bonuses. Russia is proposing “procreation holidays.” The assembled leaders chuckle audibly.

“I gather,” smiles McNiven, “that there's some enthusiasm here for that idea.”

The brutal fact is that Nova Scotia will need 52,000 more workers by 2026. But our population is dropping by 500 people a year, partly from out-migration and partly from attrition. The local kids who will be entering the workforce by 2026 have already been born. We know there aren't enough of them. We have labour shortages already in rural areas and small towns – and those shortages will only get worse as the competition for labour in the cities intensifies.

“We could drain off all our rural workers into the cities and turn rural Nova Scotia into a national park, and it still wouldn't be enough,” says McNiven.

And with too few workers, the economy declines, which has serious implications for government revenues and services, entrepreneurial opportunities and general quality of life.

Big Jim puts up another slide. There are only three ways to make up the shortfall. One is to increase the participation rate – the proportion of the population that's actually in the work force. We can make better use of now-marginalized groups like the disabled, for instance. We can encourage more women to work. We can discourage older workers from retiring. Never mind Freedom 55, says McNiven. Think Freedom 75.

The second approach is increased immigration, but that's not a complete solution. To get 52,000 new workers, we'd have to attract well over 100,000 new citizens, but most immigrants actually go to “TMV” – Toronto, Montreal and Vancouver.

“I'm half serious about the illegal immigrants in the US,” says McNiven. “Those people are so intent on getting work that they walk 80 miles in the Arizona desert after crossing the border. They're highly motivated, they have work experience, and they speak some English. They're just the kind of folks we want. The Americans haven't caught on yet that they need them too. We should take them off their hands.”

The third solution is productivity – getting more output from each participant in the work force. It sounds awful, like Scrooge squeezing Bob Cratchit, but in fact we see it all the time. When I got my first computer, for example, I couldn't believe how much more work I got done. That's productivity, and it came directly from a capital investment.

“Productivity” really means making much better use of our people. Pay employees well, and give them the best possible tools. Automate what can be automated. Provide decent benefits for part-time workers. Expand day care. In general, recognize that the key to prosperity in this strange new world is the effectiveness of working people.

McNiven makes other unorthodox suggestions. Lower the school age to three or four, freeing up young mothers for the work force. Abolish the school-leaving age and provide flexible high school and college education on the Internet. Double the payroll tax, to encourage businesses to get more production from their existing workers rather than hiring additional ones.

Big Jim would also increase the inheritance tax dramatically, which will encourage parents to give their savings to their children early. The kids will spend it quickly and foolishly, and so both parents and kids will have to keep working.

“These suggestions are somewhat frivolous, and may not be the way to go,” McNiven concludes, “but doing nothing is not the way to go either.”

The assembled leaders nod. It's a remarkable moment. We've just seen a man plant a topic squarely on the public agenda. And I'd bet we'll hear a lot more about it, on the road to 2026.

-- 30 --

Silver Donald Cameron received an honorary D.Litt. degree from Cape Breton University yesterday.

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