One-size-fits-all leads to more inequality
There might need to be different state pension eligibility ages based on the physical demands of a person's job, says an extended working life researcher in a Victoria University of Wellington talk.
6 July 2018
Evidence shows that one-size-fits-all policies to extend working life, including raising the state pension eligibility age, will only exacerbate inequalities based on gender, occupation and health, a leading European researcher told the audience at a Victoria University of Wellington Institute for Governance and Policy Studies public talk.
Around the world, ageing populations mean fewer taxpayers supporting more retirees. New Zealand is no exception. In March 2017, then Prime Minister Bill English announced the state pension eligibility age would rise to 67 in gradual steps between 2037 and 2040. English stuck by that policy in the subsequent general election, but Labour leader Jacinda Ardern pledged she would resign as Prime Minister rather than raise the age, and so any change is currently off the table.
That, however, is not the case in other parts of the world, where the following are some of the state pension eligibility age increases in train: to 67 by 2028 in the United States; to 67 between 2026 and 2028 in the United Kingdom; to 67 by 2023 in Australia; to 67 by 2029 in Germany; and to 68 by 2028 in Ireland.
These increases, along with other changes such as requiring increased contributions to qualify for state pensions, are in line with the OECD’s and European Union’s extended working life policy agenda, said Dr Áine Ní Léime, a senior researcher at the Irish Centre for Social Gerontology at the National University of Ireland, Galway, and chair of COST Action IS1409, an EU-funded research network of over 100 researchers from more than 30 countries focused on the gender and health impacts of extending working life.
The extended working life policy agenda assumes older workers are homogenous, said Ní Léime. “It ignores differences based on gender, occupation, health and precarity.”
Because of gender inequality, women hold fewer senior positions than men, and are often paid less in the same positions.
Women tend to predominate in lower-paid and part-time work and to shoulder more unpaid care-giving responsibilities such as child-rearing.
Raising the state pension eligibility age may benefit those in well-paid, rewarding jobs, said Ní Léime, and also those who have taken care-giving breaks, since working longer enables them to increase pension contributions.
But she said raising the age punishes those in those in low-paid, precarious jobs, who might find themselves out of work and struggle to get reemployed because of limited options and age discrimination in recruitment.
It also punishes those in physically demanding jobs, especially if they have ill health.
Speaking about the state pension age eligibility increase in the US, one American health care worker told Ní Léime: “I don’t think it’s fair […] If you teach or be a professor, you could do that till you die […] I’ve talked to nurses who said, ‘I just can’t do it anymore. I had to get out because of the toll it takes on you physically and mentally.’”
An Irish health care worker said: “I’m 66 this week but I feel tired at this stage. Like I feel I’ve done enough […] When this policy comes in, you’ll have to keep going until 68 before you get anything, which – an extra two years – is a while when you’re that bit older, you know. Or maybe it’s because I have this thing with my feet that slows me down. Even my husband said it to me. Now he went to do a job there two weeks ago and he came home and he was exhausted and he said, ‘I could do this 10 years ago and it wouldn’t even bother me.’”
Extending working life needs to be coordinated with other policy, said Ní Léime, to ensure more supportive and equitable care-giving policies, pay and other forms of gender equity in the workplace, free retraining and other necessary education for older workers, and stringently enforced age discrimination legislation for both recruitment and the workplace.
There might need to be different state pension eligibility ages based on the physical demands of your work, she said.
An audience member raised the question of different health outcomes and life expectancies.
There is, someone said, “a feeling in this country that retirement is a white person’s problem”.
“Almost every care-worker I interviewed in the US was African-American,” replied Ní Léime, “the janitors as well, and they were making the point that rich people were going to have healthy years in retirement. One said the Government wanted them to work to the grave.”