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Research Paper

A Fact Sheet on the Economics of Aging in Canada

·         We said above that it was necessary to keep in mind that the apparent improvement in the economic circumstances of seniors was only relative. What we might have added is that some subgroups within the cohort are more relative than others. Economic discrepancies not only persist but become exaggerated with age. While this is not appreciable from the aggregate data, income inequality, for instance, peaks between 47 and 64. A study reported in a 1997 HRDC research paper shows older men in the highest earnings quintile making twice as much – almost $40,000 more – as those in the next highest quintile, and almost ten times as much as those in the lowest. Between men and women, the discrepancies are equally pronounced – and in this case, they don’t go away after retirement. In 1991, the poverty rate among women over 65 was 13% higher than for men in the age range. While elderly women made up 57% of the 65+ population, they made up 70% of the elderly poor. This gap increases among individuals living alone, with one in every 2.5 elderly women living alone being poor. In a 1995 survey carried out by the National Council of Welfare, the only group with a higher poverty rate than unattached 65+ women (at 47%) was single mothers (60%). In 1996, poor unattached females outnumbered poor unattached males five to one. In 1997, unattached elderly women had average incomes $3,000 below the poverty line. [8, 9, 17, 24, 26, 32, 46, 49, 62]

·         One reason that women are disadvantaged to such an extent with age is their underemployment in earlier life. The greater number in part-time work (47% versus 25% of employed men) is only part of the picture. Historically, participation levels have generally been lower and unemployment rates higher for women than for men. Both of these differentials have narrowed in the last two decades. The latter disparity almost disappeared in the later nineties, in fact. For 2000, the rates were 6.9% versus 6.7%. In September 2001, they were on a par at 6.0%. Even if permanent, however – and given the current economic downturn, it is worth noting that women have traditionally done worse during hard times than men – such improvements have to be taken with a grain of salt. “Women” are no more homogeneous as a group than “workers” are. Family and marital status exacerbate the situation for women in ways they never have for men. Arguably because of complications relating to childcare, in 1991 the unemployment rate among female heads of households (lone employed mothers) was 12% compared to 7% for male heads of households. Age exacerbates it even more. Virtually none of the progress made by “women” generally over the last decade has carried over to older cohorts. Unemployment per se is a misleading indicator in any case. The real problem for women is the number of work interruptions they have, and their greater tendency to fall out of the labour force. [14, 17, 27, 50, 52a, 64, 69, 83]

·         A second reason for the late-life imbalance relates to differences in lifetime earning potential. This, too, improved somewhat over the nineties. Between 1987 and 1997, the male-female earnings gap closed from 66% to 73%. Unlike the employment rate, however, it was a long way from disappearing. In 1995, the average earnings for men were $31,053; for women only $20,219. In 1997, female workers earned an average of 15.10/hr while males earned 18.80/hr. More notable for present purposes, the improvement was limited almost entirely to prime-aged women 40-54. From here it is all downhill. Unattached women 65+ receive 72% of same-age male incomes, which are already considerably reduced from pre-retirement levels (see below). In 1997, senior men had an average income of $26,150, while for senior women it was $16,070.To put this in broader perspective, retired men 65-74 have the same median income range as employed women 45-54, and retired men 75+ have the same median income range as employed women 55-64. Even when full-time versus part-time employment is taken into account, retired men 65-74 have the same median income as all full-time employed women under the age of 65. [13, 17, 53, 77, 83]

·         Given pay equity legislation, how do we account for the refusal of this gap to go away? Traditional explanations have attributed the differential partly to discrimination and partly to gender differences in endowment (education and experience). Discouragingly, as the latter factor diminishes in importance, there is evidence that the former is actually increasing. Even discounting attitudinal problems, however, much of the apparent recalcitrance comes down simply to the gender distribution of jobs. According to a common model, the economy can be divided into core (heavy manufacturing, construction, extraction) and periphery (non-durable manufacturing, service, retail) sectors. Twice as many women work in the periphery as in the core sector. Core employees are more likely to be unionized than non-core employees. They have higher incomes, greater job security, and more access to private pensions than periphery employees do. Adding to the ghettoization effect, there are also status differences in male and female occupations. Men not only cluster in better sectors, in other words; they have better jobs within sectors. One telling indicator, for instance, is the fact that males in the periphery have as high or higher incomes than females in the core. They are also more likely to maintain status over the course of a career. In a 1991 survey, the number of males in management jobs grew consistently with age, from 3% at 15-24, to 13% at 25-44 to 17% at 45, while presence in service jobs went from 22% to 9% to 11% for the same cohorts. For women, the percentage in management hit the same level at midlife, but dropped off after 45 to 10%. The percentage in service jobs went from 32% to 15% to 18%.[13, 27, 53, 69, 70, 77]

·         Other subgroups are less well documented than women, but there is ample evidence that any disadvantaging factor becomes more disadvantaging with age. In 1991, for instance, African-Canadian and Aboriginal seniors had a poverty rate over one and one half times the general poverty rate for seniors. Again there is a connection to be made with early-life underemployment. An information paper released by HRDC in the mid-nineties noted that in 1991, when the unemployment rate was 10% for the entire population, it was 13% for members of visible minorities and 19% for First Nations peoples. A similar equation may be made in respect of disability. Actually, there are three parts to this story. (1) Disabled people are more likely to be poor than those without disabilities. (2) As people age, they are more likely to be disabled. (3) Disabled older people are less likely to be employed than either non-disabled older people or younger disabled people. In 1991, nearly three quarters of disabled individuals 55-64 were not in the workforce, and another 13-16% (men versus women) were unemployed. A big part of the problem in this case is the extent to which stereotypes about age make disablement in older people seem like a natural attribute rather than an obstacle to be overcome or a handicap to be accommodated. It is notable in this respect that older disabled people have not benefited from developments in human rights law over the last twenty years the way younger ones have. Although the gap between the participation rates of people with and without disabilities closed by 7% in the first five years after the Charter, there was virtually no change for the faction between 55 and 64. [1, 9, 11, 14, 32, 58]