Saturday, 26 Feb. 2005. 10:06 AM
The Dignity of Work.
The notion of retiring at a fixed age has fallen out of fashion in many places around the world. Now, Ontario seems about to join the movement to ban mandatory retirement
John Munro teaches at the University of Toronto. He's considered an expert in his field of medieval economic history and has published plenty. He continues to get good reviews from his students and carries the same workload he always did. My academic life is completely unchanged," he says. "I'm up at 7:30 in the morning and go to bed at 1:30 in the morning. I'm in my office most weekends." What has changed are his wages. Two years ago, Munro turned 65. Under university rules, that meant he had to retire. His office was reassigned to another professor. Then, the university turned around and hired him back, at a fraction of his old salary, to do exactly what he was doing before. Munro doesn't complain about the salary. In fact, he says, the combination of his pension plus the $20,000 a year stipend he receives for teaching means that his take-home pay is slightly higher than it was before he turned 65. But he does find the whole process both irrational and insulting.
"It's the indignity of being told you have to go," he says.
In the debate surrounding mandatory retirement, Munro is typically atypical. There is no evidence to suggest that large numbers of people are aching to work after they reach 65. In fact, Statistics Canada figures show that the average retirement age is dropping and that most now leave work before they turn 61. Philosophers may praise labour as the quintessential human activity. But to a good many people, work is simply a grind ï characterized by arbitrary bosses, pointless activity and numbing tedium. Those who agitate most for the right to work after 65 tend to be those who maintain a significant degree of control over their own work - like university professors. But even if most people are personally ambivalent about working till they drop dead, polls show that an overwhelming number of Canadians (63 per cent in the latest EKOS survey done for the Toronto Star) believe that everyone should have the right to do so. Which is where the debate centres. Is work a human right? Or is there an overriding social good accomplished by forcing people to retire at a particular age? There is no law that requires workers to retire at 65. In this sense, the term mandatory retirement is a misnomer. What there is - in some provinces at least - is a law that permits workplace age discrimination against those over 65. That's the case in Ontario, Newfoundland, Saskatchewan and British Columbia. An employer who wants his workforce to look more youthful, for example, just can't arbitrarily fire everyone over 50. But in these provinces, he can fire all of those same people - under the name of retiring them - once they turn 65.
In the past, none of this mattered very much, for the simple reason that most workers didn't live past 65. That was certainly the situation in 1889 when German chancellor Otto von Bismarck put in place the modern world's first old-age security program. The Bismarck model, later copied by Canada, provided those who were too old to work (in his view, 70 and over) a state-backed old-age pension. At first, old-age pensions and mandatory retirement were conceptually separate. Employers had the unfettered right to hire and fire for any reason, no matter how arbitrary. In any case, few could keep working forever. Work was just too physically demanding. For most, what was needed was a source of income to tide them through after they could no longer do their jobs. That's why unions and leftish political parties agitated throughout the 20th century for old-age security schemes that matched the reality of this harsh world It was a tough fight. Not until the 1960s did Ottawa set 65 as the age for receiving the two big national programs for retirees: old-age security and the Canada Pension Plan. Meanwhile, employees and employers - particularly those in the unionized sector - were busy striking private pension deals. Workers would agree to defer a portion of the wages owed them until retirement. In return, employers agreed to operate these funds, make up any shortfalls and dispense the resultant pensions. These private pension plans, as well as the complex federal and provincial legislation surrounding them, were all predicated upon the idea that most people would retire no later than 65. Indeed, those who could do so retired earlier. From the 1970s on, trade unions concentrated on winning early retirement deals for their members. Overall, they succeeded. In 1976, half of all Canadians retired before they were 65. By 2002, this median retirement age dropped to 60.6. All of which helps to explain why, when the Ontario Human Rights Code was amended in 1981 to permit age discrimination in the workplace against those over 65, not many people complained.
Since then, however, several things have changed. The first and most important is that people are living longer. A Canadian boy born in 1920 could expect to live till he was 59, a girl till she was 61. A girl born in 2001, by contrast, has a life expectancy of 82 (77 for boys). The fact that people are living longer has workplace repercussions. There are more seniors today and a small, but growing, minority of them are continuing to work. A Statistics Canada study done last year says that roughly 7.8 per cent of those over 65 were employed in 1996. Five years later, the figure was 8.4 per cent. What this means, the study says, is that the ranks of working seniors are growing at almost double the rate of the over-65 population as a whole. The employment categories in which the over-65 workforce is expanding fastest include truck drivers, financial managers and accountants - all skilled jobs with high wages and relatively few physical demands. Which leads to the second big development in the world of work. The shift to service and information industries over the last 40 years puts less premium on physical dexterity. A carpenter who has to clamber across rooftops may not feel up to working after 65. An accountant who spends his time adding may be still raring to go. The third change has to do with the growth of women in the formal paid economy. On average, women's pensions are smaller - often because they are paid less than men, sometimes because they take time off from work to raise families. Toronto pension consultant Monica Townson notes that only 40 per cent of Canadians have workplace pension plans and that for women the percentage is considerably less. Women also tend to be shunted into part-time and contract employment with no job security or benefits. All of this seems to lend support to those, including the Liberals of Ontario Premier Dalton McGuinty, who argue that mandatory retirement discriminates against women. However, Townson raises a couple of cautionary notes. While it is true that women in jobs without good pensions may feel they have to keep working past 65, she says it's not clear that doing so will make them any better off when they eventually do retire - since most still won't have good pensions. In any case, she says, Statistics Canada figures show that women retire on average about three years earlier than men - sometimes to care for elderly relatives, sometimes just to quit work at the same time as their husbands.
For most Canadians, the issue of mandatory retirement is probably not top of mind. But one small but influential sector is consumed by the debate - universities. In part, this is because professors are a workplace anomaly. A considerable number enjoy their jobs. But at the same time, they work for big, cash-strapped institutions desperate to ditch highly paid tenured workers in order to replace them with younger, cheaper help. Other Canadians also have jobs they enjoy. But unlike academics, many of these people are unaffected by mandatory retirement policies. A physician or lawyer in individual practice can work as long as he likes. So, too, the people who own or control companies. No one has had the nerve to tell 73-year-old Magna International founder and still paramount leader Frank Stronach that he has to retire. Judges, including the Supreme Court justices who ruled that mandatory retirement at 65 is a sound concept, don't have to step down until they are 75. Ditto federal senators. The MPPs and MPs who write the laws that permit mandatory retirement aren't affected by the rules they pass. As long as they keep getting elected, they can sit until they die. The U of T's Munro was required to retire when he turned 65. But the university's interim president, Frank Iacobucci, was hired when he was 67. Why is that fair? As a result of this interest, a considerable amount of academic effort has gone into the issue of mandatory retirement. Not all agree that it is an invidious idea. In a recent paper done for the C.D. Howe Institute, U of T economist Morley Gunderson writes that the whole debate is misunderstood and that if workers and employers want to bargain mandatory retirement, they should be allowed to do so.
From the other side, an array of scholars has waded into the fray. University of Western Ontario sociologist David MacGregor writes in a soon-to-be published book that those who say the abolition of mandatory retirement will lead to a bevy of social ills can produce no evidence. And it seems he is right. Manitoba terminated mandatory retirement for all workers in 1974 (ironically, university professors were later exempted). Quebec eliminated mandatory retirement for everyone, including the professoriate, in 1983. Yet, in both provinces, nothing happened. Most people didn't work longer. Those with pensions continued to collect them, usually at 65 or earlier. Workplaces were not disrupted. In those two provinces, as elsewhere in Canada, most workers continued to retire well before they were 65.
The president of the Manitoba Federation of Labour says that in her province, the 30-year ban on compulsory retirement has had no ill effects - in fact, no noticeable effects at all. "It's just been a real non-issue," Darlene Dziewit says. Unionized workers, she says, are still trying to bargain pension schemes that allow them to retire before they are 65. Employers aren't trying to force people to work longer and governments haven't tried to scale back Manitobans' retirement benefits. "I haven't noticed any big change," she says.
What exactly is the fuss all about then? If most people don't want to work past 61, and if the historical experience of places that have already abolished mandatory retirement demonstrates that the move makes no demonstrable difference anyway, why is there so much debate over this issue? The McGuinty government has already promised to end mandatory retirement. Why doesn't it just act?
The answer to these questions has to do with who is opposed to a ban on mandatory retirement and why. First, big labour. While not all unions support mandatory retirement, the big labour centrals - the Canadian Labour Congress and the Ontario Federation of Labour - do. Their reasoning, articulated by OFL head Wayne Samuelson, goes something like this: Mandatory retirement was part of the grand, post-1945 bargain struck among unions, employers and the state to create institutions that would protect workers from the whims of a brutal market economy. With the resurgence of the political right, much of this great bargain has been rolled back. Unemployment insurance has been gutted, welfare reduced. Unionization has been made more difficult and the country's major public institutions, from medicare to schools, squeezed. One of the few things left relatively unscathed has been the retirement system, the array of government programs and private pension plans designed to ensure that people are still able to lead a decent life as they age. To Samuelson, ending mandatory retirement opens the door to worse. He worries that governments and employers would use the end of it to attack programs such as old age security and the Canada Pension Plan. The United States banned mandatory retirement in 1993. Samuelson points out that the statutory age of retirement in the U.S. - the age at which Americans can receive social security - is gradually being raised from 65 to 67. He says he worries that this could happen here. (From the other side, critics point out that U.S. social security changes had more to do with the financial problems of the program than with mandatory retirement and that, by contrast, the Canada Pension Plan, this country's major old-age scheme, is solvent). Samuelson says that if Ontario wants to end mandatory retirement, it should follow the lead of New Brunswick and make an exemption in cases where the practice is determined by collective bargaining between employers and unions.
McGuinty may find it relatively easy to ignore the big unions. But he will find it more difficult to ignore business. The Canadian Association of Manufacturers and Exporters, which represents industrial firms in the province, is also opposed to ending mandatory retirement. Ontario vice-president Ian Howcroft says that for many of his members, the practice of forced retirement is so deeply imbedded in the web of workplace relationships, that to end it would give employers tremendous problems. Pension plans, he says, might have to be altered, as would the entire system of compensation. Companies wouldn't know if their older workers were planning to stay or retire. And benefit costs could soar for those who chose to stay on past 65. He says that if the Ontario government is serious about ending mandatory retirement, it should take its time and do it carefully. Back at the U of T, John Munro is a whirlwind of action. He's finishing off an academic article on - naturally - mandatory retirement. He's forging along in his own field of research, which focuses on the medieval textile industry of the Low Countries. He lost his big office when the university made him retire. Now, he operates out of more cramped quarters. He's teaching a graduate seminar for free on top of the courses he's paid to do.
And he's still mad. "I've worked 39 years altogether. I've got a good pension and am a hell of a lot better off than many people who retire. "It's the indignity."