‘You load sixteen tons and what do you yet?
Another day older and deeper in debt
Saint Peter don’t you call me cause I can’t go
I owe my soul to the Company store’
Religious imagery apart, this song could be taken as a metaphor for the relationship between the working class and the ruling capitalist class. The surplus value produced by the labour power of the working class is turned into profits by the exploiters.
There are several options by which the capitalist class can take advantage of the source of their wealth and the latest one involves working producers until they drop. Where might this end if capitalism is allowed to continue? Working until you’re 75, 80, 85?
You’re never to old, or to young, to become a Socialist. Given the option of ensuring the transition to a social sytem where quality goods and services are produced for use, not profit, or slaving away all your life to increase the wealth of a minority who look upon you as nothing more than a cash cow, which do you choose?
‘The retirement age will have to rise to 71 for middle-aged workers across the UK, according to research into the impact of growing life expectancy and falling birth-rates on the state pension.
The UK pension age of 66 is set to rise to 67 between May 2026 and March 2028. From 2044, it is expected to rise to 68.
But the research suggests that this is not enough, and that anyone born after April 1970 may have to work until they are 71 before claiming their pension.
This age limit may need to be set even higher, say experts, thanks to the high rate of workers exiting the workforce before they reach state pension age, predominantly due to preventable ill health.
Les Mayhew, associate head of global research at the International Longevity Centre and author of the report State Pension Age and Demographic Change, said: “In the UK, state pension age would need to be 70 or 71 compared with 66 now, to maintain the status quo of the number of workers per state pensioner.
“But if you bring preventable ill health into the equation, that would have to increase even more,” added Mayhew, who is also professor of statistics at Bayes Business School and has advised the government on rises to the state pension age multiple times as a senior civil servant and in his current roles.
By age 70, only 50% of adults in England and Wales are now disability-free and able to work. A smaller working population and a large economically inactive population reduces the tax base to pay for pensions – and creates huge labour shortages, which creates its own problems.
According to the Office for Budget Responsibility, pensioner benefits will cost the UK government £136bn in 2023-24, of which £124bn will be spent on state pensions.
Jonathan Cribb, associate director and head of retirement at the Institute for Fiscal Studies, said that while he did not disagree with a higher pension age, increasing it without addressing other cost-saving measures was not “realistic or equitable”. He added: “It would disproportionately impact poorer individuals whose ill-health means they have shorter lives, and so who receive pensions for less time.”
While the ILC’s solution is “illustrative of the kind of pressure that an ageing population puts on the public finance”, a rise in the retirement age to 71 was not a “realistic policy option unless you have a real emergency”, he added.
Cribb pointed out that while state pensions and pension benefits are estimated to increase by £45bn by 2050, the pressure on public finance from health and social care is estimated to increase by £105bn in today’s terms over the same period. “The real issue is actually around the NHS and social care,” he said.
The Intergenerational Foundation, an independent think tank, agreed that the pension age had to rise, but questioned on whose shoulders that cost should fall.
Younger people, their research has found, do not have the financial assets that their parents and grandparents did. In 2010, those under 40 held £7.53 of every £100 of wealth. By 2020, that had fallen to £3.98. One-third of the UK’s 14 million Gen-Xers are at high risk of retiring on insufficient income.
Angus Hanton, co-founder of the think tank, said pension age should be based on life expectancy and occupation. He also supports a wealth tax to fund and pay more towards people’s retirement, and reducing income tax and national insurance.
“The over-60s should finance their own extra retirement years since they have received such generous treatment from the state,” he said. “The money raised can be used to invest in improving the health and prospects of younger generations so they are less of an economic burden as they age.”
“Increasing the state pension age would be a terrible policy – a really bad way of attempting to make people more productive,” he said.
The government said it would ensure that the state pension remained “a sustainable and fair foundation of income for future generations”.
A spokesperson said: “We have committed £70m in employment and skills support for the over-50s, which has seen an extra 54,000 over-50s added to company payrolls. Our £2.5bn Back to Work plan is supporting people to stay fit and find work, in addition to £14.1bn to improve health services to help people live longer, healthier lives.”’
‘When the UK raised the age of retirement and heightened the national insurance contribution criteria to be eligible for a state pension, there were complaints from women who were particularly affected by the changes but very little wider protest.
It has not been as easy for the French government plan to raise the retirement age from 62 to 64. Trade unions have held nationwide strikes that have brought France to standstills, hoping that strikes and accompanying demonstrations will bring about a similar outcome as in 1995 when then-president Jacques Chirac abandoned his pension change proposals. Millions of workers have been involved to disrupt industry and transport across France. However, unlike the previous five strikes, trade unions declared the 7th March strike, ‘grèves reconductibles’, meaning workers will vote at the end of each strike day on whether to continue industrial action. With no fixed end date, unions hope to damage the economy so severely that it defeats the government.
Although the country’s current retirement age is one of the lowest in the European Union, the existing rules already require most people to work past the age of 64 in order to qualify for the full pension. By raising the retirement age by two years most workers would need to work 43 years, rather than 42, to be eligible for a full pension.
The government claims postponing the retirement age by two years and extending the pay-in period would yield an additional €17.7 billion in annual pension contributions, allowing the budget to break even by 2027 and safeguarding what they say would be a failing system. But not all economists agree.
In September 2022, a report by the French Pensions Advisory Council found the pensions system actually produced surpluses in 2021 (€900 million) and 2022 (€3.2 billion), although it did predict the system would run a deficit on average over the next quarter of a century. According to its calculations, ‘between 2023 and 2027, the pension system’s finances will deteriorate’, reaching a deficit of between 0.3 and 0.4 percent of GDP, or just over €10 billion a year, until 2032. But the Council predicted an eventual balance beginning in the mid-2030s.
A deficit of €10-12 billion per year is not necessarily excessive for a pension system whose total annual expenditure amounts to around €340 billion. ‘The results of this report do not support the claim that pensions spending is out of control,’ the Council wrote. Pension spending as a proportion of GDP is expected to remain stable, at around 14 percent of GDP, before rising to up to 14.7 percent by 2032.
Pensions expert Michaël Zemmour said, ‘It has become a form of political discourse to exaggerate and dramatise the deficit issue, to claim the system urgently needs to be reformed, when in fact the deficit is rather moderate’.
He explained, ‘It’s not about saving the pension system, it’s about financing tax cuts for businesses,’ highlighting France’s intention to finance tax cuts with structural reforms to bring the national deficit under 3 percent by 2027, a requirement of EU member states (bit.ly/3kUXHlx).
Government attempts to appeal to younger generations on the grounds that it is they who carry the burden of supporting the elderly have not been successful. Despite retirement being a distant prospect, France’s younger workers have been active in the protests.
One student said, ‘We live in a productivity-obsessed society that is preoccupied with economic growth and which has been destroying our planet for decades. Now we’re being asked to work for two more years so we can produce even more.’ Another explained, ‘We should be able to live longer and in better health without working ourselves to death. Besides, if they’re talking about retiring at 64 now, what will it be when I’m 60? Will I have to work until I’m 70 or 75? ’ (bit.ly/3JofydM).
In the United States, where the retirement age for Social Security is already transitioning to 67, a Republican Party committee has called for the retirement age to increase by three years so that people born on or after 1978 will have to wait until the age of 70 for a full pension (bit.ly/3mFHwcg).
In Germany, the Federation of German Employers’ Associations in the Metal and Electrical Engineering Industries has also suggested raising its retirement age to 70. However, Johannes Geyer of the German Institute for Economic Research believes ‘Raising the retirement age puts a lot of pressure on the working population. People with low life expectancy, and those with health problems, will suffer more; a relevant part of the population dies before reaching retirement age.’ He seeks an alternative solution. ‘We need migration. It’s essential that we have enough people coming from abroad to work in Germany’ (bit.ly/3mCFM3r).
Working people must reject this capitalist imposition – ‘live longer, work longer’. We should have a society where we can appreciate the added years of our lives and not be made to work until we drop.
ALJO
From the Socialist Standard, April 2023 https://socialiststandardmyspace.blogspot.com/2023/04/material-world-live-to-work-or-work-to.html
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