Work till you drop

The economic crisis resulted in the rich being rescued by huge financial bail-outs from the state - and so costs of the crisis became shifted to the state – and now the state is shifting the burden on to us, by slashing our jobs, our pensions, our social services and our state benefits.

One of the justifications being for the changes in retirement age being promoted is that we are living longer.

However, according to Malcolm Wicks , the former Labour pensions minister, nearly a fifth of men from the lowest social classes, such as manual labourers, cleaners and packers, die before they reach 65, compared with just 7pc of men from the highest social group. While women from poorer backgrounds are also twice as likely to die before they qualify for the state pension, with 10pc of the poorest women dying before they reach 60, compared with just 4pc of those who are better off.

Even among those who do live long enough to draw their state pension, poorer workers tend to have lower life expectancy. A 65-year-old man in the lowest social class is expected to live for an average of four years less than one in the highest social class, with a life expectancy at retirement of 14.1 years compared with 18.3 years for someone better off. The life expectancy gap for women of different social classes is also just over four years.

In 2009, the BBC reported that 12.7 million workers and pensioners were members of public pension schemes, most based on final salaries. Around 15 million households will be unable to maintain their current standard of living when they reach retirement age and face a 60% drop in their income. A further 10 million households on below average incomes, the poorest 40%, will be almost entirely dependent on the state pension.

The pensions crisis has been caused by the scrapping of final salary schemes for both public and private sector workers and a fall in the value of index-linked private plans. Those approaching retirement have also seen the value of their savings eroded by low interest rates and high inflation while the value of their properties has plummeted.

Ros Altmann, director- general of Saga has explained the impact of inflation is “significantly higher” for 50 to 64-year-olds than for the rest of the population, with this group seeing their real incomes declining.

There is much truth in the adage "Too little to live on, too much to die on; too old to work , too young to die" !

A TUC report in September 2009 highlighted the huge gap between the average director's pension and the average employee pension, based on Government figures. Directors can now expect to enjoy incomes of 26 times the average occupational pension of £8,736. TUC general secretary Brendan Barber said: "Employers often tell us that decent staff pension schemes are no longer affordable. Directors' representatives are in the vanguard of those attacking public sector pensions. Yet greed is still good in the nation's top boardrooms where directors continue to reward themselves with seven figure pension pots."

What has been a major cause of the current financial problems for the pension schemes has been the unanticipated slump in stock exchange prices, people’s pensions being dependent on the vagaries of the stock market.

We have been told that the present occupational arrangements are unaffordable. But rarely are we informed that Inland Revenue statistics indicate that employers have netted a sum of £19 billion through reducing pension contributions or taking contribution holidays on the back of the surpluses in the pension funds between 1988 and 2000. That is, they pocketed profits from the pension funds by the back door, using the revenue they generated to cut the amount of money they need to pay to wages out of current receipts.

The think-tank Tomorrow's Company said there was no "ageing crisis...As a society we can afford to grow old. Rising productivity will outweigh any negative influence on living standards from an ageing population."

The source of all such unearned income is what Marx called the surplus value produced by workers over and above what they are paid. It is out of this unpaid labour that not only the idle rich but the whole non-productive superstructure of capitalist society (the armed forces, civil service, banking, and other financial services) 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 ( means a near doubling of annual output over the next 40 years). Pensioners too are maintained out of this surplus. Pensions are a transfer payment from the profits of the capitalists, even if ultimately these profits come from what workers produce. So, even if the ‘over-burdened pension system’ was to be reduced, this would not benefit the working population since the capitalist class would never dream of passing this on as higher salaries. With proportionately less workers engaged in production they are able to produce proportionately more wealth. It is the increasing productivity that will go on between now and when existing workers retire that will mean that society, even this capitalist society, will be able to support the expected increased proportion of retired people in the population.

Capitalists wants their wage slaves to work till they drop. The advances in civilisation from our labour – including an increased life span – are being clawed back by capital to its advantage. We need to be clear, cutting pension levels and 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 and all this for a lot less.

It is for the unions to defend the workers’ position within capitalism. The job of socialists is to show how we are robbed and exploited and to show how we can untap the wealth of our collective productive power by taking democratic control of the means of production where the callous treatment of second-class, cast-off workers known as pensioners will cease.