Hey Ontario, we’re not getting any younger!
It’s true. Our population is aging, and so is our workforce.
While many Ontarians are working into their sixties and seventies at rates never seen before, the reality is that people will retire at some point. When they do, manufacturers, and employers generally, will need to rely on younger generations of employees to provide the talent and innovative capacity that has for so long provided Ontario with a competitive advantage.
The question is: are manufacturers prepared to do so?
The question of engaging younger persons in manufacturing is not new. The Trillium Network is not the first organization to weigh in on this subject. We are, however, undertaking a new initiative that will provide a unique and valuable perspective on the matter over the next few months. Through this initiative we will learn more about the experiences of younger generations in the workforce and how it is different than in the past.
Here’s a preview: the workforce experience of younger generations in Ontario is markedly different from those who came of age in the 1970s, 1980s, 1990s, and even the 2000s. Let’s keep this in mind.
It is our opinion that Ontario’s younger generations are extremely talented and well-educated. And it is increasingly incumbent upon manufacturers to engage them if they wish to remain competitive (both locally and globally). If they don’t, employers in other sectors – or even in other jurisdictions – will, at the expense of Ontario’s manufacturing industries.
This blog post draws on census data from 2006 and 2016 to answer questions about the workforce experiences of younger generations of Ontarians. We will update these data next year when the most recent census data is available. (Anyone else getting excited to see the 2021 census data? We are!).
Let’s get started. What about Ontario’s workforce changed between 2006 and 2016?
- The workforce got older. About 61 percent of the workforce was under the age of 45 in 2006. That number fell to 46 percent in 2016.
- In 2006, 57 percent of the manufacturing workforce was under the age of 45. This fell to 45 percent in 2016. While the number of persons aged 45 and over working in manufacturing didn’t change much, the number of persons under the age of 45 decreased by more than 200,000.
- The workforce got older in every region in Ontario between 2006 and 2016. There were no outliers. This increase was relatively small in some communities (e.g. Collingwood, Sarnia, Pembroke) and more pronounced in others (e.g. Windsor, Chatham, Tillsonburg).
- This trend was also pronounced within manufacturing at a regional level. It was most pronounced in Oshawa, Chatham, and Toronto, where the proportion of the manufacturing workforce under the age of 45 decreased by about half. Some communities, like Woodstock, Sarnia, and Stratford, fared a bit better, but still saw double-digit decreases in the proportion of persons under the age of 45 working in manufacturing. Again, not many outliers.
- There are a few instances where the number and proportion of persons under the age of 45 working in specific segments of manufacturing in particular regions or municipalities increased – Sarnia’s chemical and petroleum industries, for example. We aren’t sure why that happened, but we have some ideas. The number of persons under the age of 45 working in the beverage industries increased in a few communities (e.g. Ottawa, Barrie, Peterborough). We’re pretty certain that’s because of craft breweries, and are looking forward to seeing if this progress continues when the most recent census data is made available.
For some of us, this information is new. For others, this information is unsurprising. Over the next few months, we will explore why this happened and how it has affected Ontario manufacturing and the broader economy.
Employment is a good quantitative measure, but what happened to the quality of jobs? To provide some insight, we compared earnings between 2006 and 2016. This analysis helps us understand the experience of younger generations in the workforce and how it has changed. Here’s what we learned:
- We generally expect that younger generations of the workforce will earn less than older generations. This was the case in 2006 when those under the age of 45 earned 71 cents for every dollar earned by those 45 years of age and older. By 2016, those under the age of 45 earned only 67 cents for every dollar earned by those 45 years of age and older.
- In manufacturing, those under the age of 45 earned 76 cents for every dollar earned by those 45 years of age and older in 2006. By 2016, those under the age of 45 earned 72 cents for every dollar earned by those 45 years of age and older.
- This generational gap in earnings also widened in utilities, construction, transportation and warehousing, education, accommodation and food services, and arts and entertainment.
- The generational gap in earnings widened substantially in managerial and leadership occupations, where in 2016 those under the age of 45 earned only 49 cents for every dollar earned by their counterparts aged 45 and above (compared to 84 cents in 2006!).
- Conversely, the earnings gap closed to some degree in finance and insurance, professional services, and healthcare.
- With some exceptions, the gap in earnings between those under 45 and those 45 years and older widened between 2006 and 2016. In this respect, younger generations of the workforce are less materially well-off relative to older generations than in the past, while older generations are better off. (And we haven’t even started talking about housing prices.)
Maybe all of this is simply a natural function of the workforce and economy in an aging society. Maybe it’s more problematic than that. Or maybe the gap has closed since the last census, and our points are moot. But we doubt it.
In any event, the widening gap in earnings (and wealth) between younger and older generations needs to be addressed. It will be increasingly difficult to recruit and retain talented younger persons when they are not compensated fairly relative to others. Employers in other sectors, including finance and insurance, professional services, and healthcare, are being intentional in their efforts to provide competitive remuneration to a new generation of employees. As a point of reference, the average hourly wage in Ontario is around $29 and is going up. The most successful employers can demonstrate to prospective employees a path to $29 an hour (and beyond). Those that cannot may continue to face recruitment and retention challenges.
Average earnings in manufacturing tend to be higher than in most sectors. This may provide manufacturers with an advantage if they can properly communicate this to younger generations of the workforce. Many younger persons, especially those raised in the Greater Toronto and Hamilton Area (GTHA), are choosing to move further afield (see: Brantford, Thorold). Perhaps manufacturers in regions with more affordable housing can collaborate with their municipal economic development offices to promote the employment and housing opportunities available to them in smaller communities (as well as any other amenities).
These are the earliest days of what we anticipate will be an exciting and eye-opening project. This blog post offers a snapshot of what happened to the workforce between 2006 and 2016, and it will be several months before we know how things evolved over the past five years. So stay tuned for more insight and perspectives related to younger persons and the manufacturing workforce in the Fall!