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Government Culture Finance

The Push for Pensions

Marching for work and retirement, photo: marcovdz/flickr

Europeans are talking about retirement. Yet, in France at least, it’s the youth who are most angry. Today the biggest protest movement since President Sarkozy took office continued for a tenth day. Airports have been disrupted, health risks have reached ‘pre-epidemic levels’ with refuse collectors on strike, even the Louvre was closed as staff blockaded the museum entrance.

The cynical readers among you will view this tête-à-tête as more déjà vu than coup d’état. Nonetheless, there remains a fundamental question in the developed world over how to balance the right to a ‘long and happy retirement’ against the gerontological and economic realities of modern times.

In financial terms it’s hard to argue with the figures. According to Allianz, a leading German financial services company, public pension expenditure for the European Union as a whole will increase to 12.8 percent by 2050. Compare this with France, Greece, or even Italy – where expenditure will increase to 25 percent of GDP by 2050 – and it seems inevitable that the budgetary axe should fall at this time of fiscal ‘belt-tightening’ across the continent. In Britain, for instance, the new measures are projected to save £5 billion a year. Furthermore the financial crisis has hit one rather traditional quirk of European retirement rights, namely that of a gender-based pension entitlement, with both the UK and Greece removing a woman’s prerogative to beat her husband to the pension pot.

However, this is one problem we can’t blame on the bankers. Aging populations are a direct result of our successful economic development – as the social, technological and cultural effects of modernization and urbanization mean lives are lengthened and people have fewer children to keep their populations youthful. As the New York Times put it in response to the protests, “it is hard to conjure a situation in which people move back to the countryside and again have larger families.” In fact, the Oxford Institute of Ageing – which published the seminal 2008 Global Ageing Survey – predicts that the West’s future search for a younger workforce will be instrumental at improving lives in the developing world, where in Africa only five percent are projected to be 65 or older in 2050 – compared to 29 percent in Europe.