Many Western countries are increasing the age at which a person can qualify for the pension. Generally, this has often involved moving the eligible age from 65 to 67. The argument for this has been due primarily to demographic considerations, as the baby boomer generation (those born between 1945 and 1965) reach retirement age, placing ever increasing financial burdens upon these bourgeois states and their taxpayers. At least, that has been the line fed by the governments’ concerned. While demographics certainly play a role, the real cause has been the neo-liberal (capitalist) policies pursued in the last thirty years, especially in countries like Australia, New Zealand and the United Kingdom.
Most universal old age pension schemes, including New Zealand Superannuation, were introduced at a time of relative full employment, high wages and economic growth and the assumption the vast majority of jobs would be full time. The reality is since the demise of the postwar consensus, has been more brutal: full time employment has been replaced in many sectors by casual part time employment, wages have plateaued and protections for workers have been attacked. These trends have left governments’ in debt and struggling to generate the revenue needed to pay for old age pensions. In response to this they have chosen to raise the retirement age as from a capitalist persepective such luxuries like superannuation that cut in to the profitability of the capitalists are no longer affordable.
The New Zealand Prime Minister Bill English has followed this trend by announcing an intention to raise the entitlement age for the NZ Super from 65 to 67. This is hypocritical considering he had lambasted Labour for proposing the same thing in the 2011 and 2014 elections. It was also condemned as generational warfare whereby the younger generations are being punished for the “crime” of not being baby boomers.
In effect, Generations X and Y and the Millennials that have been burdened with the lowest wages, the harshest working conditions and heavy debts including student loans and medical bills (from the introduction and increasing of user pays in health and education) in generations, have been told they must toil longer to support a generation that enjoyed full employment, relatively good wages and conditions, cheap housing and free health and education.
The combination of austerity measures as a legacy of the 2008 economic crisis and the rapid changes brought on by technology, means that jobs are being abolished at a much faster rate than they can be created. In 1975 a car factory like Todd Motors in Porirua had a work force of about 1200 workers. That factory, like most of the factories in Porirua, have either long since disappeared or become almost totally automated. Even in offices, technology has radically changed how many workers are needed. One computer can now do what used to be done by typing pools that employed dozens of workers.
As technology replaces workers, one of the many questions that has emerged that capitalism has no answer for is ‘Where is the money to pay the pensions and unemployment benefits of these workers going to come from if the tax base continues to shrink rapidly?
Bill English seems oblivious to the reality that his proposed change is already being made redundant by factors that not even the bourgeoisie can change. The retirement age is arbitrary and does not reflect the reality that many jobs have effective retirement ages that are much lower than 65. A sizeable proportion of the New Zealand workforce don't sit behind a desk for most of their working lives. They are in physically demanding employment including care giving, labouring, farm work, hospitality, the trades and forestry where being physically fit and healthy are expected. By the time many of these workers reach their early fifties their physical fitness has passed its peak. They find themselves being replaced by younger, fitter workers who are made to do the work for longer hours, for less pay.
Retirement ages are usually imposed to make the administration of pensions much easier for government departments to administer. It also sets an age at which the worker knows they can finally ditch the job and enjoy the fruits of their labour. At least in theory. When governments claim they can't afford to pay for a lower retirement age or even maintain the current retirement age they aren't being honest. In a way they're already paying a de facto old age pension for people aged under 65. It's called the unemployment benefit.
For workers in many industries the retirement age is actually much lower in practice. In many jobs, in particular the trades, public works, forestry and construction, the effective retirement age is often when a person reaches their early 50s. That's about the time when many of these workers start to suffer from workplace injuries and ill health because their bodies can't handle the demands they once could.
Other workers in less physically demanding jobs are being forced out by boards or directors and shareholders demanding a higher profit margins and higher returns on their investments. Two of the cheapest ways to reduce costs is to replace a whole group of workers with machines or to simply shut down and asset strip the business so only the most profitable parts remain operational and make the workers redundant.
While this may be great for the bottom line – at least for a while – it's not so great for the workers who have been forced out of work, especially if they're older workers. Older workers not only lose their sense of identity but they also lose many (or most) of their friends and social networks. They also find themselves on the unemployment benefit with little or no chance of getting employment. In effect, they are forced into early retirement with none of the assistance or perks of being retired such as subsidised housing or discounted or free public transport.
If there was full employment, where the jobs paid decent wages and the hours of work were realistic, the tax take would be much higher. This would be enough to ensure that anyone who wanted to retire at the age of 55, 60 or whatever could do so. There have been times in the past such as the post-World War II period up to the 1980’s when the capitalist system came close to some of this. However, such a proposition today on the basis of capitalism is utopian. It is ruled out that such postwar economic conditions will return any time soon as the crisis of capitalism deepens as a consequence of the 2008 global recession. The hard won reforms of workers such as retirement pensions in the West are no longer affordable as the bourgeois have to attack and undermine the postwar gains of workers to maintain their profits and lifestyles in a period of capitalist decay.
In addition, Social Democratic parties and the union movements that have been captured by right-wingers and careerist advocate and carry out counterreforms on this issue, for example the Australian Labor Party and UK Labour Party who raised the retirement age to 67. Unfortunately the right-wing leaders of social democracy have no perspective of socialism and revolution and have adapted to capitalism, This means in a period of capitalist decline and decay they carry out counter reforms against workers as there are no meaningful reforms to be had for workers without the question of socialism being taken into consideration and acted upon.
In New Zealand the Labour Party policy, until recently, was to raise the retirement age to 67. In 2011 the then leader, right-winger Phil Goff, annouced this in the general election campaign (when it wasn't even party policy) and subsequently lost the election with one of the lowest votes for Labour in its history. Ironically under the Shearer / Cunliffe leadership the policy was adopted and led to another defeat as in both cases the National Party opportunistically under Key opposed raising the age of superannuation!
The present Labour leader, right-winger Little, undertood that raising the age was not popular with Labour voters and cost the party both elections and as now ruled out raising the age of superannuation. However, if Labour gain the government benches in the September's general election it will require the vigilance and campaigning of the rank and file of the labour and trade union movement to maintain this position. The Labour government will come under tremedous pressure to carry out capitilist austerity and raising the age of superannuation in the national interest i.e the capitalist interest, will be put back on the agenda.
Ultimately, only a socialist society based on material abundance and genuine democracy can create and sustain the ideal conditions that will allow workers to retire when they want. The retirement age would not be set at an arbitrary age. It would be decided by the workers themselves. The workers would be able to work for as long as they chose or until they weren’t capable of doing the job any more. When they did retire the money they receive would be enough for them to do more than simply exist. Our tasks as Marxists is to fight in the here and now for whatever improvements we can squeeze from this fundamentally topsy-turvy system, while continuing to struggle for its eventual replacement. Capitalism itself should be retired.
Socialist Appeal demands:
No to raising the age of superannuation
Voluntary retirement at 55 with a decent full pension for all.
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