Working until 67 or what?

There is a debate going on in most European countries about the need to postpone retirement to account for demographic transition taking place in the rich societies of the Old World. The main argument is that conventional pension systems, within which the current workforce finances the pensions currently paid to the retirees, cannot be sustained any longer. The disproportion between the working parts of the population and the pensioners has become too large. To overcome this problem, it is proposed to change the law and increase retirement age. However, many oppose such proposals, particularly the political Left, maintaining that we already do work too long. In fact, it may well be that both sides are right (or wrong) at the same time.

It is a fact that the current pension system common in Europe cannot be sustained much longer. Ever fewer children are being born, so that the workforce is not becoming any larger, while at the same time people live longer and are thus retired longer. But is it a good idea to just increase retirement age? The Leftists are right by pointing out that there are many occupations that literally wear people off – prolonging their “careers” would be cruel. Such jobs are in construction, schools, the health sector etc. Also, jobs that depend on motoric skills (e.g., surgeons) are not well suited for retirement age experiments. At least, there is a need to differentiate between various fields of work when we are talking about the “right” retirement age. But is there any possibility to compromise these concerns: the necessities imposed by an aging society with the stresses working people are exposed to?

First of all, let us point out a potentially positive side of higher retirement age from the perspective of working individuals. Life expectancies reaching 80 years, most of us can be expected to be retired for some 10-25 years. This is a lot of time to deal with. While some may enjoy the freedom of not working, others may suffer from a lack of meaning in their lives, and from a lack of structure. Work can provide both. Under certain circumstances, as sketched below, working longer may actually be a good thing for everyone.

The first condition is: work shorter hours! There are many benefits of part-time work, which not necessarily has to lead to poverty (as exemplified by the Netherlands), one of them is that the burden per time unit is lower. People working shorter hours may be able to work more years. Additionally, older employees might work even fewer hours than they did in their 30s or 40s. A part-pension is imaginable: older people work, say, 4 hours a day, while getting financial support from the state. Possibly in form of lower taxes. The employer is benefited (see below), the state’s burden is lowered, and the worker himself is better off.

While should the employers want old people to work for them? Indeed, some firms already realize that this may be a good deal. Invest some funds into adapting the workplace for older people, and you can reap the benefit of their experience, the stability they provide (e.g., by not engaging in career rat races), their ability to work in teams etc. Empirical research by workplace psychologists confirms that this may indeed be a good investment, suggesting that later retirement may be a win-win situation, if handled properly.

In the end, this is another point for discussing it on a broad-society level. And it will become ever more important since there are ever more old voters, who are directly concerned with what their working situations and prospects on retirement will look like.

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