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We Live Longer…Should We Work Longer?

With increasing public debt and budget deficit across countries, governments around the world have been under serious pressure to simultaneously reduce public debt and not jeopardize global recovery.

This tricky situation has led to many debates, among them the one about the average pension age.

Having followed discussions & arguments on the topic, I would summarise the issue as follows: should there be a default age or an arbitrary age limit to work? Should all workers be treated in the same way, regardless of the nature of their job?

Before going into details with arguments, I should point out that my answers to these questions would be motivated by the sense of freedom that I believe everybody should be entitled to.

In the UK, the coalition is proposing to increase the average pension age to 66 by 2016. In France, public sector workers were recently on strike again (not big news) because the government is proposing to increase the average pension age from 60 to 63. In Greece, the government was forced to acknowledge that the country was living beyond its means and that people were expecting everything without working hard; therefore among some harsh measures that were imposed on the Greek government by the EU & IMF, was the increase of the average state-pension age from 60 to 63. But the Greek labour minister Andreas Loverdos has been facing tough industrial actions from civil service organisations and trade unions.

My question to those strikers and protesters would be: what is the point of living longer with no money or a miserable pension?

In France for example, the official average retirement age is currently 60. If in past decades, the life expectancy was around 72 years old and the government could thus take care of retired people without creating a big hole in the state budget, this is no longer the case. Nowadays, with people living up to 80-85 years, how can we expect the same funds to cover, not 10 years of retirement but 20 years?!!!

Unquestionably, the standard of living is changing & improving around the world, people are living longer and better. So, should we amend labour legislation accordingly or should we stick to old rules and expect some kind of magic to happen in order to prevent budget deficit? Also, from a business standpoint, would it not be good to keep this experienced labour force active? To illustrate my thoughts, I will quote the British Secretary of State for Work and Pensions Iain Duncan Smith, who recently said: “people are living longer and healthier lives than ever, and the last thing we want is to lose their skills and experience from the workplace due to an arbitrary age limit” I would add to this quote “particularly when they are willing to work”.

To be honest and fair, if someone, regardless of whether he has worked as a farmer or a banker, would like to carry on working in order to contribute more and then have a better retirement, why shouldn’t he /she be allowed to do so? On the other hand, it should be clear that, if someone chooses to retire earlier – just because he/she does not want to work anymore- then he/she must not expect to receive the same money as people who used to retire at 60 then live up to 75, especially as he/she might live up to 85 years, if not longer.

I can hear some critics saying that, instead of asking older people to work longer, we should be giving those jobs to young jobseekers. Well, this raises the question on how we perceive “labour”. For me, work & the labour market are more likely to be infinitely elastic than like a fixed entity that would be divided among the available labour force. In other words, the more you work, the more it creates other jobs. So, stopping the elderly from working would not necessarily make the jobs available for younger jobseekers…it might even have a contrary effect.

So, let’s all adapt to this new challenge and stop limiting people due to their age…by the way, can someone check the average retirement age in the USA? 67 years old and 5% of the active population is over 70 years old!

“[Forced retirement] makes you feel pretty rotten, 

as if you’re stuck on the shelf and put to one side”

John White, 70 retired postman.

Source: http://www.bbc.co.uk/news/business

August 14, 2010 Posted by | Articles In English, Economics, International Economics, Uncategorized | , , , , , , , , , , , , | 2 Comments