I think it's only natural that the retirement age increases along with life expectancy. I have 10 good years extra, we shouldn't we work the five of them?
Problem here is that people think it's a God-given right to retire at 60, no matter that people usually died at 65 (in 1950) or at 95+ (nowadays).
Whenever the retirement age is raised, they demonstrate because they feel they're being treated unfair compared to the previous generation (those one or two years younger than them, who won't be affected by the reform).
Actually, I think it hardly makes sense to have a mandatory age, some jobs are physically exhausting and medically require younger requirement age, whereas some, namely intellectual ones, should be allowed to/have to work longer. (and then you realise some civil servants, such as policemen in New-Caledonia, retire at 50).
Same for the average length of work per week, by the way.
And it's mathematical that if workers pay for retired people, when life length extends, to keep the system balanced without cutting pensions short, and without increasing workers retirement taxes too much, you have to make retirement age evolve with life expectancy.
That's how it works here : 2/3 of the gains on life expectancy are added to retirement age every five years, but that doesn't prevent people from demonstrating.
Aquarius wrote:
And it's mathematical that if workers pay for retired people, when life length extends, to keep the system balanced without cutting pensions short, and without increasing workers retirement taxes too much, you have to make retirement age evolve with life expectancy.
I've heard that argument countless times, and I'm still waiting for someone to prove it with actual numbers.
When the retirements pensions system was instigated here, in the early 50's, the ratio of active people per retired people was something like 9 (or 10 ?) : 1. 9 (or 10) persons paid for one retirement pension. A retirement pension is generally around 70 % of an average salary (it's a bit more complicated, but let's keep it simple).
To have a system balanced, and taking the hypothesis of constant salaries, the retirement tax was about 7 % (0,07 x 10 = 0,70 = 70 % ; 0,70 = 0,70 x 1).
In the coming future, the ratio of actives per retired will be something like 4:3. For a balanced system, that means the retirement tax should be around 53% (0,53 x 4 = 2,10 ; 2,10 = 0,70 x 3).
Either the system is kept balanced by the retirement tax rate, either it is by playing with the ratio of retired per actives.
Or you can change the system (pensions per capitalisation), or add other sources of money in the equation, but then it's not balanced on its own...
Aquarius wrote:
And it's mathematical that if workers pay for retired people, when life length extends, to keep the system balanced without cutting pensions short, and without increasing workers retirement taxes too much, you have to make retirement age evolve with life expectancy.
I've heard that argument countless times, and I'm still waiting for someone to prove it with actual numbers.
I would think it's fairly straightforward.
If people live 20 years after retirement they require double the pension-money as if they live 10 years. To be able to afford that you can either tax the workforce harder or reduce the number of people getting pensions.
Like Aquarius I think a flexible retirement age makes perfect sense (if you work physically hard you'll have fewer healthy years), and we have to realize that we can only fund our pensions system if we keep a fairly constant ratio between taxpayers and pensioners
Aquarius wrote:
When the retirements pensions system was instigated here, in the early 50's, the ratio of active people per retired people was something like 9 (or 10 ?) : 1. 9 (or 10) persons paid for one retirement pension. A retirement pension is generally around 70 % of an average salary (it's a bit more complicated, but let's keep it simple).
To have a system balanced, and taking the hypothesis of constant salaries, the retirement tax was about 7 % (0,07 x 10 = 0,70 = 70 % ; 0,70 = 0,70 x 1).
In the coming future, the ratio of actives per retired will be something like 4:3. For a balanced system, that means the retirement tax should be around 53% (0,53 x 4 = 2,10 ; 2,10 = 0,70 x 3).
Either the system is kept balanced by the retirement tax rate, either it is by playing with the ratio of retired per actives.
Or you can change the system (pensions per capitalisation), or add other sources of money in the equation, but then it's not balanced on its own...
But there are too many hyphotesis there. The biggest one is the assumption than increasing the retirement age you'll find a job for all those people affected plus the young people entering the labour force. I don't know in France, but no way you can do that in Spain.
And I don't think that keeping the system balanced should be a dogma, though it shouldn't be a problem, at least in Spain, with the former age of retirement, at least until the generation born in the late 60s/ early 70s retire, and it should only be a temporary problem.
Of course the flexible age of retirement makes a lot of sense, and that's probably the reason it hasn't been implemented yet.
Edited by kumazan on 01-11-2012 16:47
If the system shouldn't be kept balanced how will you pay, when you have double the amount of pensioners to support.
The other part of it is for me sort of a civil obligation to contribute to society in return of getting something back (pensions, healthcare, schools, infrastructure etc). When people require pensions for a longer period of time I think it's fair to ask them to contribute for linger as well.
There have been alot of talk for the last few years of a "boom" of elderly citizens hitting us in about 20 years time. With a highly integrated wellfare system some say it will not only wreck havoc on the budget, but also give us a huge deficit when it comes to the workforce in the healthcare sector. The major problem is, of course, that nurses arn't exactly knee deep in money.
It's weird (and a bit tragic) that nurses and teachers arn't even close to being among the higher paid jobs out there since they are arguably among the most important sectors we have.
How come we don't value those who teach us when we are young and those who take care of us when we are old?
There's a fine line between "psychotherapist" and "psycho the rapist"
A certain end of the political spectrum here in the United States has been claiming that Obamacare is a "job killer." This has proven to be an incorrect claim, and that the most significant difference in employment created by the new healthcare system is that old people who had been putting off retirement to maintain their healthcare coverage would leave the workforce, allowing younger people into those vacated jobs.
I think this has to be taken into account too. If there is youth unemployment, an earlier retirement age might not be the worst thing.
kumazan wrote:
But there are too many hyphotesis there. The biggest one is the assumption than increasing the retirement age you'll find a job for all those people affected plus the young people entering the labour force. I don't know in France, but no way you can do that in Spain.
Unemployment is not as bad as in Spain, especially for U25 people, but it's serious enough to be a real problem.
Another problem is that people who're 55+ can't find a job after they've lost theirs. There's no miracle solution there. They've contemplated all sorts of contracts here, which would give bonus to firms if they'd hire one young (under 25) plus one old (55+) person, but that doesn't seem to give the expected results.
Also saying one young person can replace one old person is fine when there's no special competency required, but when you need brand knew knowledge or when you need a huge experience that doesn't work.
Anyway, the balanced system I described works well with full or almost full employment, but doesn't with an important rate of unemployment.
kumazan wrote:
And I don't think that keeping the system balanced should be a dogma, though it shouldn't be a problem, at least in Spain, with the former age of retirement, at least until the generation born in the late 60s/ early 70s retire, and it should only be a temporary problem.
When you don't keep it balance, sooner or later you've to pay for it. And it's the state that ends up paying for it. State money's being its taxpayers' one, it comes back to the same thing.
Aquarius wrote:
When you don't keep it balance, sooner or later you've to pay for it. And it's the state that ends up paying for it. State money's being its taxpayers' one, it comes back to the same thing.
Money is coming from the taxpayers already, so I don't think this is a problem.
Hey, at least you don't have an useless, mega expensive crap F1 circuit in your city. Nor is Bratislava pushing for the 2020 Olympics while the unemployement reaches an all time record.
It's almost impossible for me to imagine how the situation is in countries such as Spain, Italy and Portgual, let alone Greece. Here the unemployment rate for July 2012 (season adjusted) was 3.1% with a total workforce of 71.4%.
Just to add something about the situation I mentioned earlier about the "elderly boom" that we're expecting; when it comes to the budget we arn't that bad of since we have the "Goverment Pension Fund" which currently has a total value of ca. NOK 3,775 billion, around $662 billion if my calculations are correct.
There's a fine line between "psychotherapist" and "psycho the rapist"
Am I the only one bothered by the billions of dollars that they spend on election campaigns? Money that could be used for things like, oh you know, fighting poverty?
The money issue isn't on him though. It's not on Romney either. Blame the Supreme Court, for allowing outside money in.
Actual donations to campaigns are, in my opinion, ok. There is a limit for private donors, which mitigates the power of big money interests. I believe the limit is $2,500. Most of Obama's money comes from small donors, regular people. I'd prefer publicly financed campaigns, but that will probably never happen. It's the non-associated groups that can raise as much as they want that are the problem.
Recently a big donation, 11 million dollars, was made to fight a proposition here in California. It came from a SuperPAC in Arizona (I think) and the money from that came from another SuperPAC. The original SuperPAC was not known till a court said they had to reveal, because according to the law, withholding the name of the original donors is money laundering.
When Prop 8 passed last time around (which banned gay marriage in California) the yes campaign got 25 million from the Mormon Church in Utah. This is the sort of gross abuse that should be eliminated.
Especially with religious groups, who get a whole lot of money in tax breaks and grants, taking sides and making big donations to political campaigns seems wrong.
Edited by Levi4life on 07-11-2012 07:07
Am I the only one bothered by the billions of dollars that they spend on election campaigns? Money that could be used for things like, oh you know, fighting poverty?
Well most now my opinion by now so I will leave it that be.
And yes, last I heard it was 6 billion dollars for campaigning!?! I find that sicking as well. In 4 years somebody should run off of using free social media sites and just say "I saved you all a bunch of money to fix all our problems." It would be genius but it's too bad they wouldn't get enough recognition.
