On July 1, for some categories of employees, namely those . The new legislation seeks to boost productivity to support a growing number of pensioners .
Author
Constantin Colonescu
Associate Professor of Economics, MacEwan University
The median age of the population in Greece increased from 41 to 44 years between 2010 and 2020, according to a . In Canada, for comparison, between 2000 and 2011, where it has stayed for the last decade.
From 2002 to 2020, Greece’s old-age dependency ratio (the proportion of people aged 65+ to those aged 15-64) . Unlike in Canada, which has seen its population grow, Greece’s population has decreased by more than half a million (about six per cent of the population) over the last decade.
are also experiencing aging populations, . This demographic shift requires the working population to produce more goods and services per employee to support those who do not work.
Forcing the young to work harder, however, is not the solution. Canada must not follow the example of Greece.
The quest for productivity
The Greek government’s prominent justification for the six-day work week law is to . The devil in the detail is that they use the more convenient – but inaccurate – definition of productivity as output per worker.
Productivity is a measure of efficiency in production. define labour productivity as output per worker. If output is measured over a year and divided by the number of workers, then increasing the working time increases this kind of “productivity.” This does not make work more efficient, though.
Let’s visualize this argument of productivity in a simple example. Suppose a young man, Pierre, has a family of three as dependants. He needs to work five days a week. His friend, Konstantinos, however, has to support five dependants. Konstantinos needs to work six days a week and perhaps get a second job.
Is Konstantinos more “productive” than Pierre? No, according to the intended meaning of the word productivity. But yes, according to Greek Prime Minister Kyriakos Mitsotakis.
What will happen when the size of Konstantinos’s family increases even more, to seven or eight dependants? Will Konstantinos be able to work even more? Probably not. He will have to find a more efficient way of using his time or have someone else in the family get a job.
It is more useful to . This definition is more accurate because it doesn’t depend on the number of hours of the work week. It focuses instead on how workers’ skills, technological change, management practices and other factors determine productivity.
Historically, , but it has shown a slight improvement. In contrast, Canada has higher productivity levels, . Again, it is important to measure productivity as output per hour, since this definition does not depend on population, dependency ratio or the number of hours worked per week. It only reflects how efficient the economy is.
Canada’s productivity challenges have . Researchers have identified a number of causes, including . None of this research, however proposes to increase the number of hours to boost productivity, as it does not depend on how long the work week is.
No need to increase working hours
To Greece’s credit, forcing the active population to work longer hours may be a solution in the short term. But, if this is the case, the government should make it clear that this is a temporary situation. It should provide a precise date when the law expires and a plan about what needs to be done in the meantime to build a sustainable system.
Canada, , face similar challenges with and an aging population.
Unlike Greece, however, Canada has avoided a population decline by . In 2023, Canada recorded its , increasing by 1.3 million people, or 3.2 per cent.
Due to its geographical circumstances and other social, economic and political factors, however, . While it does take in immigrants and migrants, it hasn’t made this part of its focused strategy to counter its declining population.
These differences suggest that Canada does not need a radical, immediate solution to address its aging population. The Canadian government doesn’t need to increase the work week to 48 hours – not even temporarily. With some exceptions, is 40 hours in a week, as regulated by the .
Avoid pension system collapse
There is still time to build a solid and sustainable plan to avoid a collapse of the pension system. Canada should focus on obvious and time-tested ways of increasing productivity.
This should include providing incentives for innovation, encouraging the expansion of artificial intelligence and automation, and facilitating training for skilled labour. refers to those who have some post-secondary credentials or significant work experience. Programmers, operators of complex machinery, nurses, as well as professionals such as engineers and medics are some examples.
to improve the skill composition of its labour force. Neither forcing people to work more, nor depending on an indefinite influx of immigrants are long-term solutions.
Some governments perceive a large population as a weapon that would deter foreign aggression. leads to a prisoner’s dilemma situation, when a country pursues self-interest to the detriment of the whole planet.
Instead of fearing a decreasing population, we should . Our fear of change must not make the transition to a lower population unnecessarily difficult.
Constantin Colonescu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
