The elderly aren’t old yet

Published on November 3, 2003

Story by

manuel ansede vázquez

Translation by:

simone howse

It is said that demographic ageing in the EU is the affliction that will be responsible for the saturation of health care systems, the collapse of the Welfare State, labour shortage, a loss of creativity and even the onset of political conservatism. From this we might think that the symptoms of individual ageing patterns are well known and all but written in stone.

We have a tendency to associate the social indicators that mark the onset of old age at a given moment in our lives with the biological effects that ageing has on the human body. Without really thinking about it, and with the best intentions, we deny the elderly their own names and refer to them through euphemisms, we associate them with a need for financial support, the inability to be in productive employment, loneliness, immobility, poverty and conservatism. Our caring and protective attitude towards the elderly has mutated into a tone of derogatory commiseration (poor old granddad!). The stereotype of the elderly that has formed in our minds is one of a generation that, when the industrialised era drew to a close, was already too far over the hill to adapt to the dynamic market of mass consumerism.

A confused view

The advent of new technologies has meant that skills among mature workers are now obsolete, and this has brought about increasingly early retirement. As a result, we can no longer directly associate old age and the retirement age. A heuristic approach to this would tell us that in the immediate future old age will be less lonely with greater financial and personal independence, and it is the elderly who will be supporting the younger generations. These pensioners will be mobile city dwellers, as is already the case in those European countries where the process of industrialisation began earlier (e.g. France and Germany). Southern Europe in particular needs to do away with this dated concept of the elderly as unproductive because it simply fuels the notion that, instead of living longer, we are just dying more slowly. The elderly are not old yet and we need to bear this in mind when forecasting for the future.

Disastrous reports, including the one issued in 2001 by the European Council’s Economic Policy Committee, base their conclusions on a persistently low birth rate and sluggish economic growth (GDP) whilst at the same time failing to fully take into account this new concept of the ageing population. Blindly changing the pension system to obtain short term respite and not attacking the affliction at its core – population decline and wilful unemployment - is a mistake that is perhaps, just perhaps, driven by dubious motives. In his book, La Tregua, the Uruguayan writer Mario Benedetti says: “I only have six months and twenty-eight days to go before I reach the age of retirement. Are these really the words of idleness? I tell myself that they aren’t, that they are not born of idleness, but of the desire to work on what I like”. He also alludes to the interconnection between retirement and the quality of work. We can thus appreciate the extent of this muddle, and realise that private pension schemes do not necessarily promise a remedy to all ills.

The solution can perhaps be found on a middle ground: bringing down inflated house prices, making it easier for younger people to establish their own family units; encouraging women into gainful employment in southern EU countries, and creating quality part-time jobs that bring in a supplementary income rather than an indispensable part of the household revenue. All this could be achieved with the magic wand of an appropriate immigration policy.

The work to be done over the next fifty years is viable if we take into account the fact that, thanks to the huge increases in immigration requested by the European Commission until 2030 and the resulting increase in the EU GDP, we will have a much higher basic wealth than we did a few years ago. Public pensions systems would be guaranteed adequate funding if certain conditions were fulfilled (in Spain, for instance, according to a recent report (Spanish website: estudio del sindicato Comisiones Obreras), an annual GDP growth of 2.5% is all that is needed).

Even with this fresh concept of old age, it is nonetheless important to avoid letting ideological trees obscure our view of the factual wood. There is no rule that says that publicly managed, defined pay-as-you-go pension schemes are fairer than privately managed, funded, defined schemes. In a public scheme the government taxes active workers in order to pay for retired workers and in so doing destroys the effort-reward cycle. The private savings scheme has worked successfully in some Latin American countries. In Chile a there is a recognised relationship between individual effort and rewards, but the difficulty with this kind of scheme is its sensitivity to inflation.

A little faith in the public pension

It is clear that private saving schemes prove very lucrative for financial companies. There is no doubt that these companies have been very active in influencing public opinion on the ‘Apocalypse’ that lies ahead if the current system prevails. Despite this, however, it is evident that the public pension system does in fact need to be bolstered by a voluntary private savings scheme, but not one that is set up through a knee jerk reaction to the possible collapse of the public system.

In this light, the idea of a public pension scheme fattened up with private savings seems to offer a good alternative to what would otherwise be the most simple solution: that the State takes the family back to its traditional role of caring for the elderly. As if by magic, the burden of pension funding would vanish, allowing for tax cuts for younger generations who, in turn, would have the capital to set-up up on their own which would bring about an increase in birth rates and counteract the demographic ageing process. Sadly, this is one of Grandma’s magic medicines that remain irreconcilable with the current, nebulous view we have of the family. Granddad is, without a doubt, better off in a home for the elderly.

Story by

manuel ansede vázquez

Translated from Los viejos ya no son viejos