Productive Ageing with a focus on social connections
There has been a lot of talk about the benefits of productive ageing. But Ben Spies-Butcher cautions us to consider carefully why we want to promote paid work for our ageing population.
There are many reasons to encourage older people to participate for longer in paid work. Those in work often maintain social networks that add to quality of life and provide sources of resilience when things go wrong. Paid work can mean extra income and greater choice. But that’s not the only driver of public policy discussions and decisions, which focus primarily on economics and the budget.
It’s clear from a series of Intergenerational Reports that governments are worried about the costs of ageing. Less people in the workforce potentially means less tax revenue and more spending on pensions and formal care services.
It is important to put these concerns in context. While an ageing population may mean more retired workers, population ageing also means less children too young to work, and only a relatively small decline in the proportion of working age people. And while public spending is expected to rise, most of this is due to changes in technology and public attitudes – which means more money for health and education for reasons unrelated to demography.
Why we are concerned about encouraging people to work is important because it shapes the policies we use to achieve our goal. If we are concerned that people may be forced to retire against their will we might focus on employers and workplaces, ensuring they are accessible and friendly for older workers. If we are concerned about cost, we might look to wind back access to payments, or focus our attention on ensuring people access private resources in retirement.
Unsurprisingly, most policy is focused on the latter options. We have seen a rise in the age to qualify for the pension (restricting access to public payments) and an increase in support for private savings (particularly superannuation). The impacts are not always equal.
Most people can access super from age 60. And research shows that people often use their super to pay off debt or allow early retirement. So for those with private savings, a rise in the pension age might eat into their savings a little earlier, but won’t prevent them retiring if they find themselves squeezed out of the labour market. Super also receives generous tax concessions. Even if the government successfully reduces the worst excesses of the system, it will remain a large part of total public support for older people.
At the other end, those with little private savings will bear the brunt of policies designed to ‘force’ participation. Those in this group are most likely to find it difficult to get and hold down a job. Super is a bit like a lifetime measure of advantage –it accumulates inequality over the life course. Those with little super are those who have had low paid jobs, casual employment and breaks from the workforce. They are often the people who struggle to find a job later in life.
Policies have also been changing for this group of people. Governments have not only lifted the retirement age, they have also introduced mutual obligation requirements on the unemployed – requirements that mean you lose your payment if you don’t follow the rules, and that force ‘work for the dole’ if you don’t find a job quickly.
The number of people forced into this system has been growing. Many people who once qualified for disability payments or parenting benefits have been ‘reclassified’ as unemployed. That means lower payments, harsher conditions and new obligations. Policy change may extend this to even more people.
The end result is growing inequality that is likely to expand into older age. At one end are people with stable, well paid employment, often white collar, who have significant (tax subsidised) savings, but also find it easy and enjoyable to find work later in life.
At the other end people will often be in insecure, low paid, precarious work as they age and will be subject to increasingly paternalistic requirements as the government ‘forces’ them to be productive. These workers are more likely to have disabilities and caring responsibilities that affect their ability to engage in paid work.
None of this is to deny the real benefits that come from productive ageing. But it does mean we should be very careful about why we want to promote paid work, and how we do it. Focusing on costs often means inequality – focusing on social connections may be more productive.
Ben Spies-Butcher is Senior Lecturer in Economy and Society at Macquarie University. He is a Research Associate at the Retirement and Policy Research Centre at the University of Auckland and Fellow at the Centre for Policy Development.
Kaseywills
April 27, 2013 at 10:20 am
Social connection
Social connection has a major influence over business as well.