There’s no sign that the pandemic has caused a rush to retirement, according to a new report from BMO Capital Markets.
Looking at some of the ways that society has been changed by Covid-19, the report concludes that work life is one of them — but not the decision to work.
In fact, the report said, labour force participation rates have returned to, or exceed, their pre-pandemic levels in most developed countries, including Canada and the U.S.
This appears to be true for older workers as well, it said, noting that, “Data on older age cohorts also don’t confirm a shift toward early retirement.”
“Although a record number of workers are quitting, the majority are simply switching jobs, not hitting the links,” it said.
That’s not say that the workforce and the economy haven’t been fundamentally changed by the pandemic. The rise of remote work is likely here to stay, the report said, as is the decline in business travel.
“Office life won’t be quite the same after the pandemic, with commuting five days a week likely a thing of the past for most workers,” the report suggested.
Indeed, data from the U.S. indicates that office occupancy is still less than half of pre-pandemic levels, and the report suggested that, “it’s also likely that office occupancy will never exceed even two-thirds of pre-virus levels.”
“This permanent shift has implications for building owners and lenders, businesses serving commuters, municipal government planners, and real estate markets,” it noted.
Other shifts that occurred when the pandemic first hit, such as a spike in online shopping, now appear to have reverted to trend, it also observed.
“Yes, people are buying more stuff online each year, but the pandemic doesn’t appear to have accelerated the pre-existing trend,” it said.
The pandemic’s impact in other areas — such as tech spending, labour productivity, and companies’ approach to production and inventories — remains uncertain.
“Workers will likely continue to spend less time in the office and on business trips long after the pandemic ends. By contrast, the virus does not appear to have sped up online commerce or early retirement,” it concluded. “To date, it’s unclear whether it will lead to permanent changes in reshoring, inventory management, and productivity, or alter the economy’s long-run growth rate.”