age old problems

The UK state pension age should increase to 70 as soon as possible because people are living longer, the Institute of Directors has said.

It was becoming increasingly expensive to cover the cost as people lived longer, the IoD's chief economist Graeme Leach said.
"Startling increases in longevity in recent decades also mean that it is unrealistic to expect to be able to fund a potential 25 to 30 year retirement from an effective 30 to 35 year working life,"

Will society be unable to cater for future pensioners at the same standard of living as they have today? Is there going to be a sort of class war between the generations, between those at work and those who have retired over how the national income should be divided between wages and pensions? The short answer is: No. These are scare stories put around by employers, who want to reduce the contributions they pay into company pension schemes and the taxes they pay for state pensions, and by insurance companies, who want to sell more private pensions. There are too many old people. They are becoming an unsupportable burden on the pensions and health systems. If nothing is done about it there will be a generation war between pensioners and the decreasing proportion of those of working age. So runs the argument consistently put over by the media. But it's a myth based on faulty statistics, disguising a hidden agenda by people who want to cut pension and welfare benefits for other reasons and/or want to make money by selling private pensions. The "pensions time bomb" is an imaginary threat stirred up by vested interests.

The source of all such unearned income is what Marx called the surplus value produced by wage and salary workers over and above what they are paid, which generally speaking corresponds to what they need to keep themselves fit to work at their particular trade or profession. It is out of this unpaid labour that not only the idle rich but the whole non-productive superstructure of capitalist society has to be maintained. What allows capitalism to maintain an enormous non-productive sector is the high level of productivity in the productive sector, a productivity which increases slowly but steadily all the time, historically at a rate of one to two percent a year. One of the non-productive activities that the capitalist State has to undertake is the maintenance of the poor, those members of the working class who are unable to work and therefore have no income from a wage or salary paid by an employer: the sick, the handicapped, the unemployed and of course the old. Pensioners too are maintained out of this surplus but pensions are not paid for by ‘workers paying taxes’ since the burden of taxes paid by workers is in the end passed on via labour market forces to employers. Pensions are a transfer payment from the profits of the capitalists, even if ultimately these profits come from what workers produce. Put another way, though, with the reality of the class struggle in mind, the problem looks more like: workers living longer means that the share of the national income going to the working class and away from the capitalists will rise if the current settlement is maintained. But, even if the ‘over-burdened pension system’ was to be reduced, this would not benefit the working population since the capitalist class would not dream of passing this on as higher wages and salaries.

We need to be clear: raising the retirement age of workers is a very real pay cut. We will be asked to work more years and for a greater proportion of our lives than we expected.

The proportion of over-64s in the population is indeed rising and this is mainly a reflection of a reduced birth rate in the past, which has meant a fall in those now in the 16-64 age range. This has happened before in the last century without the dire consequences now being predicted. Most estimates don't take into account the reduced expenditure on the under 16s that a fallen birth rate means nor the fact that a significant proportion of the 16-64s are also not working, not just the disabled and the recorded unemployed but also many who are on "incapacity" benefit as early retirees to whom capitalism denies a job. Nor does it take into account the fact that over time the productivity of those at work rises nor that the health of the over-64s is improving.

The advances from our labour – including an increased life span – are being clawed back by capital to its advantage.

TUC general secretary Brendan Barber said that such a move would leave many older people in limbo, where they were too old to work and too young to claim a state pension.
"The better off you are, the longer you live and the more years you get to claim a state pension," he said.
Already there is a marked difference in life expectancy across income groups, with unskilled manual male workers having an expectancy of 71 years as compared to an average of 79 for professionals , and if the normal pension age to be raised from 65 to 70 this would mean that pensions wouldn’t have to be paid for so long and no pension at all would have to be paid to those who die between 65 and 70, as one in five existing pensioners do .

The motto of the ancient Roman slave owners was that slaves should work, or sleep. It seems the modern capitalists’ version of that term is that wage slaves must work till they drop.