Bermuda’s working population as it currently stands will be “unable to support the local economy in years to come” as the island faces a profound demographic shift.

A brief document made public yesterday by the Ministry of Economy and Labour sets ambitious goals for the growth of the island’s workforce, based largely on the data from a 2018 report from the Department of Statistics.

Titled Bermuda’s Population Projections 2016–2026, that report tracks a consistent fertility rate of Bermuda’s women holding steady at 1.4 children per woman.

But the death rate will climb from 7.6 per 1,000 people to 9.4 during the same ten-year period, with the ministry document concluding: “Bermuda’s couples will have an insufficient number of children to replace themselves.”

While the consequences of an ageing population have been highlighted for years, generally in the context of Bermuda’s healthcare system, the position paper Addressing the Challenge of an Ageing Population in Bermuda focuses on the economic impact facing the island.

Life expectancy continues to rise, with the median age of the population going up by 4.5 years in a decade.

As more people hit retirement, “it may be difficult for employers to secure enough qualified Bermudians to fill vacant positions”.

As the number of seniors outstrips the capacity of the working population to finance the economy, Bermuda heads for a crisis.

In 2008, the island’s filled jobs were tallied at 40,213.

“More than ten years later, and severely impacted by the pandemic job losses, the total filled jobs in 2020 was 32,427,” the position paper notes.

“That is a loss of 7,786 persons or more than a 19 per cent decline in the number of jobs filled since the peak.”

The paper cites a January 2022 report by KPMG that the working population will “decline significantly” in the eight years ahead.

Because of the speed of demographic change, the position paper calls for urgency.

“Given that the workforce will decline by approximately 500 persons per year over the next few years due to an ageing population, it can be assumed that, at a minimum, they need to be replenished.

“It should be noted that maintaining the workforce at its current level will not generate any additional GDP (assuming that the current level of workforce participation remains the same).”

The ministry document lays bare the choice facing the island between “an increase in the productivity of the workforce or an increase in the working population”.

With fewer workers paying into the pool of healthcare financing, and healthcare costs forecast to rise, the cost of healthcare for younger residents “will rise dramatically unless seniors are required to pay more into the healthcare funding pot”.

An older population will pile more pressure on private pensions and the Contributory Pension Fund, underfunded by about $2 billion as of 2013.

A 2018 analysis by the Auditor-General predicts the CPF to be depleted by 2049.

The ministry paper states that the Government “acknowledges that aggressive action needs to be taken”.

“While the Government will continue to focus efforts on the re-employment and national youth strategies with the aim of getting Bermudians back into the labour force, the Government will also aggressively implement other measures to increase the working population.”

The Progressive Labour Party Government acknowledged the need to grow the island’s residential population in its 2020 and 2021 throne speeches.

But a hard number and a deadline appears in the position paper: 8,418 more people are needed in the working population of Bermuda.

The figure comes from a needed 25 per cent rise in workers based on a November 2020 labour force survey that recorded 33,496 in Bermuda’s working population.

The position paper gives the Government five years to boost its working population to bring Bermuda’s ratio of elderly versus working residents back in line with the average reported by the Organisation for Economic Co-operation and Development.

Jason Hayward, the Minister of Economy and Labour, said in introducing the document that the island was not comparing its demographic needs to those of Caribbean jurisdictions.

“The structure of our economy is different,” Mr Hayward said, adding that Bermuda was comparing its prospects to developed economies that were similarly “grappling with this problem”.

The paper issued yesterday concluded: “In addition to ensuring that every able-bodied Bermudian has an opportunity to participate in the workforce, the Government will utilise net immigration as one of its solutions to reverse the trend of Bermuda’s evolving demographic profile to improve the old-age dependency ratio and to spur further economic growth.”