As an initial analysis of AK experts shows, there are many indications that the Commission’s new Green Paper still relies on its old “panacea”: key derivations of the Green Paper are once more the increase of the legal retirement age and the expansion of fully-funded pension schemes.

 

Discourse on the subjects of “demographic change” and “Intergenerational justice” often begins with the seemingly “apocalyptic” vision of the looming loss of wealth or the alleged imminent inability to finance the welfare state (among other in the areas of old age security, healthcare and care). In general, this is attributed to the synergy of increasing life expectancy, an ageing population, a declining working-age population, subdued productivity growth and an occasionally too “generous” welfare system.

 

Green Paper: Analytical deficits and contradictions

The Green Paper too paints a somewhat threatening picture. The statements concerning retirement age, make analytical deficits and contradictions particularly clear: The Green Paper describes the “challenge of ageing” with the deterioration of the so-called “old age dependency ratio” (ratio between the age group 65+ and the age group 20-64). This is accompanied by the comment that it would not come to any deterioration by 2040 if “old age” no longer began at 65, but at 70.

 

In doing so, the Commission’s rather obvious suggestion is that demographic challenges can and should be simply met by substantially increasing the legal retirement age. This narrow perspective is a serious analytical retrograde step by the Commission. As early as 2012, the Commission explained in its White Paper on Pensions that purely demographic relations and their changes on their own say very little – the reason being that it is not only a question of the relation of age groups, but the economic dependency ratio – hence the ratio of beneficiaries to the working population! Instead of substantially increasing the legal retirement age, the improved integration of people of working age would make much more sense economically and socially. In spite of the huge number of unemployed and underemployed people or people retiring early because of health problems and the labour market situation (in 2016, 28 % of all pensioners in the EU were younger than 65), this path is simply being ignored.

 

Based on this one-sidedness, the view towards economically and socially improved solutions will remain concealed, for example when it comes to a better use of existing labour market potentials during a life cycle – in particular of job seekers, women and other disadvantaged groups. To which extent these proposals will be compatible with key targets postulated within the framework of the European Pillar of Social Rights, also remains an open question.

 

A positive aspect of the Green Paper is that it outlines good and meaningful approaches with regard to health and educational support throughout a life cycle, to strengthen approaches on gender equality, on high quality and affordable access to elementary services (from education and healthcare up to care).

 

Austrian Chamber of Labour: Integrated approach necessary

It is evident that the ageing of society represents an enormous challenge. Only the adaptation requirements and the measures derived from them distinguish themselves hugely, depending on analytical concepts and – often interest-driven – paradigms of the European Commission. In any case, the following is required for the intergenerational contract and the security provided by the welfare state associated with it, to also function in the future:

 

• Credible paradigm changes of key actors towards an “investment-related and preventative” strategy in key policy and action fields (such as education policy, social policy, labour market policy, business culture),
• Employment-supporting macroeconomic policy and reducing unemployment,
• (Re)integration of the unemployed and jobseekers in gainful employment,
• Securing and creating high-quality vocational education and training,
• Creation of framework conditions for the improved compatibility of family and work,
• Improving health protection and lifelong learning as a condition for prolonging working life,
• Improved increased age integration of employment (age appropriate workplaces, etc.),
• Creating adequate jobs for people with limited work capability,
• Transforming precarious and informal forms of working into regular employment,
• Balanced distribution of gainful employment,
• Fair distribution of wealth acquired through work!

 

 

Further information:

Commission: Green Paper on Ageing

Commission: Press release Green Paper on Ageing

Public consultation on the Green Paper on Ageing

AK EUROPA: The Future of Pensions in Europe

AK EUROPA: Commission publishes Demography Report