Thursday, July 26, 2007

Demography Diaspora

The shrinking population problem is on the cover of the latest issue of The Economist. The newspaper offers a few suggestions to deal with the tightening labor market:

The best way to ease the transition towards a smaller population would be to encourage people to work for longer, and remove the barriers that prevent them from doing so. State pension ages need raising. Mandatory retirement ages need to go. They're bad not just for society, which has to pay the pensions of perfectly capable people who have been put out to grass, but also for companies, which would do better to use performance, rather than age, as a criterion for employing people. Rigid salary structures in which pay rises with seniority (as in Japan) should also be replaced with more flexible ones. More immigration would ease labour shortages, though it would not stop the ageing of societies because the numbers required would be too vast. Policies to encourage women into the workplace, through better provisions for child care and parental leave, can also help redress the balance between workers and retirees.

I'm not sure Pittsburgh can do all that much to increase immigration, particularly the international kind, but the rest of the policies are within the region's influence. Workplace Pittsburgh should lead the way for reform, just as cities and states are taking environmental matters into their own hands. Of course, I'm not aware of any talent crisis in Pittsburgh. The job market is what is tight.

The Pittsburgh labor market should be more attractive than it is to businesses located elsewhere. Progressive workplace and workforce practices might help promote this opportunity. Am I wrong in thinking that there is an excess of talent in and around Pittsburgh?

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