Speaker 1: From Bloomberg News and I Heart Radio. It's the big tag.
Speaker 1: I'm west Kosova. Today, governments around the world want to
Speaker 1: raise the retirement age. Citizens are saying, not so fast.
Speaker 1: It's a looming problem almost everywhere. More and more people
Speaker 1: are retiring and living longer, and there aren't enough younger
Speaker 1: working people to pay the retirement benefits of the generation
Speaker 1: that came before them. The standard way for politicians to
Speaker 1: address this coming crisis is to ignore it. But as
Speaker 1: the bills stack up, that's becoming increasingly difficult to do.
Speaker 1: So what's the answer. Two of my colleagues are here
Speaker 1: to sort out the tough economics and tricky politics. Ben
Speaker 1: Sills in Madrid leads Bloomberg's Government and Economics covery across Europe,
Speaker 1: and Nancy Cook is a White House correspondent in Washington.
Speaker 1: Then we're seeing an awful lot of anger from French
Speaker 1: citizens who do not like President mccron's plan to raise
Speaker 1: the retirement age from sixty two to sixty four. Can
Speaker 1: you describe what's going on in Paris? Yeah, the French
Speaker 1: people are furious about this, aren't they. This is kind
Speaker 1: of like the third rail of French politics. It's been
Speaker 1: an issue which successive presidents have promised to tackle, have
Speaker 1: tried to tackle, and time and again we've seen they
Speaker 1: draft a proposals, they submit it to the National Assembly
Speaker 1: and then boom like the people are out in the streets.
Speaker 1: The French people know how to strike and it becomes
Speaker 1: a real test of the nerve and the resolve of
Speaker 1: the leaders. My name is Julie. I'm twenty one years old.
Speaker 1: We consider that the government want to make us work
Speaker 1: until That's what I think about young people who didn't
Speaker 1: not study. They started working very very young, but we
Speaker 1: will still ask them to work until sixty five. This
Speaker 1: is scandalous, alarm and I was seventy one in solidarity
Speaker 1: with that young people. It's a very bad, very firm
Speaker 1: It's not the time, not a good idea. And my
Speaker 1: name is Matthew. I'm forty seven years old. I'm an
Speaker 1: English teacher and we're protesting because we don't want to
Speaker 1: spend the rest of our life just working without the retirement.
Speaker 1: There's money to be found in other places. I think
Speaker 1: taxes could be raised in in different sectors and uh,
Speaker 1: asking people to work just to avoid rising taxes is
Speaker 1: probably not the solution. Mccrown has kind of made it
Speaker 1: his pal mark that he's impervious to public opinion when
Speaker 1: it comes to doing what he thinks is right for
Speaker 1: the country. As you said, my current likes to think that,
Speaker 1: you know, he's going to do it his way. He's
Speaker 1: tried that several times and it hasn't worked out very
Speaker 1: well for him. He had protests in the streets before
Speaker 1: COVID over the same sort of you know, very stringent
Speaker 1: pass cutting. Why is it that he thinks that the
Speaker 1: French people are going to go along with this, That's
Speaker 1: a really good question. I've kind of asked our colleagues
Speaker 1: in Paris what his rationale for it is and they
Speaker 1: they will tell you that he's just a very self
Speaker 1: confident politician. He thinks that ultimately he can bring people
Speaker 1: around with the power of his arguments, and also, you
Speaker 1: know those people who ultimately aren't persuaded, well, you know,
Speaker 1: they can get angry. And he's kind of betting that
Speaker 1: he'll be able to you know, a combination of enough determination,
Speaker 1: enough public information making his case the people that will
Speaker 1: be able to peel off enough support from the strikers
Speaker 1: that they become marginalized and ultimately he can push his
Speaker 1: plans through. I mean that the thing is, at the
Speaker 1: end of the day, the retirement age sixty two. I'm
Speaker 1: not expecting I'm going to retire at sixty two, and
Speaker 1: I would take sixty four if you offered it to
Speaker 1: me now. So it's difficult, I think, was to really
Speaker 1: understand why the bunch of people are so angry about this.
Speaker 1: But you know, that's the culture of France, and that's
Speaker 1: the approach that you know, so many of these unions,
Speaker 1: these public set to workers have Nancy Ben described pensions
Speaker 1: as the third rail of French politics. That is the
Speaker 1: very expression that's always been used in the U S
Speaker 1: when it comes to social security and other entitlements. And
Speaker 1: right now in the US we're seeing this big fight
Speaker 1: between Joe Biden and the Republicans over whether or not
Speaker 1: Republicans in Congress are going to try to in some
Speaker 1: way cur tail or limit Social Security to get ahold
Speaker 1: of costs. There was a big speech in the U
Speaker 1: S the State of the Union, and Joe Biden really
Speaker 1: seized on this idea of Republicans wanting to cut Social
Speaker 1: Security and medicare, you know, as something Republicans want to
Speaker 1: do that is a third rail here as well. Some
Speaker 1: of my Republican friends, I want to take the economy hostage.
Speaker 1: I get it, unless I agree to the record plans.
Speaker 1: All you at home should know what those plans are.
Speaker 1: Instead of making the wealthy pay their fair share of
Speaker 1: some Republicans, some Republicans want Medicare and SOUF security sunset.
Speaker 1: I'm not saying it's a majority of senior citizens here
Speaker 1: vote in huge numbers, and so basically he's really trying
Speaker 1: to put Republicans on the defensive and say this is
Speaker 1: something you want to do. In reality of Florida, Senator
Speaker 1: Rick Scott, who ran the political group that wanted to
Speaker 1: get Republican senators elected this past mid term cycle, did
Speaker 1: put forward a plan saying that he thought all federal
Speaker 1: programs should sunset and be re evaluated after five years.
Speaker 1: So this is a plan he put out. It was
Speaker 1: not like a widespread Republican plan. However, the Biden White
Speaker 1: House has seized on this as like one of their
Speaker 1: key foils heading into and they are really hammering the
Speaker 1: Republicans home on it. It came up in the State
Speaker 1: of the Union, a bunch of Republicans booed him, but
Speaker 1: The President then went to Tampa, Florida and sort of
Speaker 1: reiterated this. You know, Florida, as you know, has a
Speaker 1: ton of old people who live there and retired there.
Speaker 1: So this is going to be a really key thing
Speaker 1: heading into the election, with Biden trying to draw a
Speaker 1: contrast with Republicans saying, you know, he wants to keep
Speaker 1: these programs intact. He's a defender of them and trying
Speaker 1: to argue that Republicans want to cut them, and even
Speaker 1: the Senate Leader, Mitch McConnell, the Republican leader, came forward
Speaker 1: to say, no, we're not going to do that. We're
Speaker 1: not touching social Security. So you can see the Republicans
Speaker 1: running away from this idea themselves. They're totally running away
Speaker 1: from it because they understand how important it is to
Speaker 1: senior citizens and people that vote. And in America, you
Speaker 1: have to remember that Social Security is viewed a little
Speaker 1: bit differently than other entitlement programs like food stamps or
Speaker 1: Section eight vouchers for housing, because social Security is viewed
Speaker 1: as something that workers, you know, are taxed on throughout
Speaker 1: their working lives and they've paid into it, and so
Speaker 1: it's viewed as something where you know, I have paid
Speaker 1: into this part of money for my whole career, and
Speaker 1: I deserve these benefits and any cuts to them are
Speaker 1: basically like taking money away from people which they have
Speaker 1: already set aside, and people do not like it. You know,
Speaker 1: It's really similar the situation in Europe. You're seeing across
Speaker 1: the content a whole bunch of countries where governments are
Speaker 1: trying to just to stretch the system, to turn the
Speaker 1: dial a little bit, to make these systems more sustainable
Speaker 1: over the long run, and it makes people really angry.
Speaker 1: We're not just talking about France, in Italy, in Spain,
Speaker 1: in the UK, all of these countries particularly there are
Speaker 1: European countries often where the budget situation is not the
Speaker 1: strongest and where the state pension system is one of
Speaker 1: the major liabilities at the moment. Look forward into the
Speaker 1: future and the ratio of workers to people over sixty
Speaker 1: five just gets worse and worse and worse, and and
Speaker 1: that situation is just going to get so much more acute.
Speaker 1: So we have this problem. It has to be solved.
Speaker 1: I mean, the reason why they're doing this isn't punished seniors.
Speaker 1: It's because there isn't enough money to pay them out
Speaker 1: espe actually because there are fewer younger workers than there
Speaker 1: are people now retired. So what is the answer. We've
Speaker 1: seen any number of things come along. You raise the
Speaker 1: retirement age, you cut benefits, or you means tested so
Speaker 1: that wealthier people, you know, get less money. But nancy
Speaker 1: are any of those things likely to fly well. So
Speaker 1: the last time Social Security was really changed like in
Speaker 1: a big meaningful way was under Ronald Reagan, you know,
Speaker 1: the Republican president, and then a Democratic Speaker of the House,
Speaker 1: Tip O'Neill, changed it and made some tweaks to make
Speaker 1: it more sustainable. So that was the last time this
Speaker 1: came about. I think that one other sort of wonky
Speaker 1: idea that people have talked about, or the policy wonks
Speaker 1: have talked about, is there is a limit of how
Speaker 1: much of one salary is taxed for Social Security. And
Speaker 1: so one idea that people have had is you could
Speaker 1: raise the amount of one salary that is taxed, so
Speaker 1: people who have higher salaries would pay like a greater
Speaker 1: share for their salary. And that's one way to do it,
Speaker 1: and people who were in last would never hit the cap.
Speaker 1: And so in that way it's more progressive, right, so
Speaker 1: a majority of Americans would not pay more. It would
Speaker 1: just be the wealthy pay more into the Social Security
Speaker 1: Trust Fund. But it is a problem that the United
Speaker 1: States will have to solve. By five the taxes will
Speaker 1: only pay for seventy of the benefits. So this is
Speaker 1: something that politicians will have to grapple with. But the
Speaker 1: thing is is that this is not something Joe Biden
Speaker 1: wants to do. This is not really something that the
Speaker 1: majority of Republicans want to do. And I would say
Speaker 1: a decade ago there was more appetite to deal with
Speaker 1: these deficit busting issues, um when President Obama was president,
Speaker 1: but really like President Trump blew through the deficit, you know,
Speaker 1: that was not sort of a thing that he was
Speaker 1: interested in, and so both parties really just like don't
Speaker 1: want to talk about it at this point. This is
Speaker 1: not the time for budget hawks in d C. And
Speaker 1: so it's an issue that they keep pushing off. So
Speaker 1: it seems like the answer for the US is it's
Speaker 1: gonna be somebody else's problem once I'm already gone from Harvist.
Speaker 1: Then what about in Europe? We have a lot of countries,
Speaker 1: different governments, different approaches. What are some of the ways
Speaker 1: that they're trying to get their arms around us. With
Speaker 1: the exception of Makron, I mean, he's really out in
Speaker 1: front in terms of trying to tackle it. But I
Speaker 1: don't think that shifting the retirement age from sixty two
Speaker 1: to sixty four. It's symbolic and that kind of opens
Speaker 1: the process of making the system sustainable, but it's not
Speaker 1: a fix in itself. My kind of guess is that
Speaker 1: will you know you've you've seen how this works, wears
Speaker 1: in you'r we just muddel on a mudel on mudel
Speaker 1: until we reach a crisis. In this situation, I think
Speaker 1: there'll be a lot of muddeling on and then there
Speaker 1: is one solution out there, but it's arguably even more
Speaker 1: controversial than pension reform itself. That's immigration. There's going to
Speaker 1: be tons of pressure for immigration into the EU in
Speaker 1: the decades ahead. I'm sure it's going to be the
Speaker 1: same in the US, and Nancy could speak to that.
Speaker 1: But you know, when you get to the point where
Speaker 1: the number of workers is declining year after year, and
Speaker 1: that's hitting not just the pension system but GDP growth
Speaker 1: and inflation and all these issues, there's a lot of
Speaker 1: people who want to come in and work. But that's
Speaker 1: just a really difficult political issue to open up at
Speaker 1: this stage. When you get to a crisis, it's gonna
Speaker 1: look a bit different. Yeah, I agree with that. I
Speaker 1: think that, you know, immigration is something that could definitely
Speaker 1: help as well, because it would expand the U S
Speaker 1: tax space and we've seen so many immigration restrictions in
Speaker 1: the US. But you know, just like social security and
Speaker 1: medicare are the third rail in politics, so is immigration
Speaker 1: right now, particularly for Democrats who feel like they don't
Speaker 1: really have a solution for it. And so it's like
Speaker 1: all the third rails of politics in one part. You know, then,
Speaker 1: as you say, beautifully put it, things will sort of
Speaker 1: muddele on until it reaches a crisis. How many years
Speaker 1: are we looking at for France, for Italy, the UK
Speaker 1: before the bill comes due and we reached the point
Speaker 1: where something has to be done. That's a good question.
Speaker 1: Maybe not this crisis, but one of these crisis somewhere
Speaker 1: along the way. The problems in the social security system
Speaker 1: are going to become a major factor for the sustainability
Speaker 1: of the public accounts. And that's when you're going to
Speaker 1: late night you know, high stakes negotiations to sort this out.
Speaker 1: That will be the same thing in the US. The
Speaker 1: US will model along for the next decade until it's
Speaker 1: a major crisis. And the last time they reformed Social Security,
Speaker 1: it was really like, you know, an eleventh hour deal
Speaker 1: and when there was real solvency of it up for
Speaker 1: grabs and these you know, Republican president and Democratic Speaker
Speaker 1: of the House came together. But it was really something
Speaker 1: that they did at the last minute, and that is
Speaker 1: the way Washington works. Nancy Cook, Ben Sills, thanks for
Speaker 1: coming on the show. Thank you very much. Thanks so much.
Speaker 1: When we come back, all kinds of unpopular ideas to
Speaker 1: fix this problem, as we've heard, there's not enough money
Speaker 1: and not a lot of political will. What do we do.
Speaker 1: My Bloomberg colleagues Amy Bainbridge, Ainsley Thompson, and Emily Kadman
Speaker 1: are here with me now. They've been going country to
Speaker 1: country to try to find a way out. Emily, maybe
Speaker 1: I'll start with you. We're seeing this tension over retirement
Speaker 1: ages happening all over the world between governments and workers
Speaker 1: who are feeling like they're changing the rules of the
Speaker 1: game on them. Yes, I think this story is something
Speaker 1: that taps into something that cuts across cultures, across classes,
Speaker 1: across you know, many many different things. Fundamentally, many of us,
Speaker 1: I'm in my forts. You know, we watched our grandparents,
Speaker 1: We watched our parents, We watched people be able to
Speaker 1: retire in their sixties, sometimes even younger, and that kind
Speaker 1: of seemed like the norm. But that's just really not true. Now.
Speaker 1: You know, I'm sitting here in Sydney and I'm looking at,
Speaker 1: you know, a state pension age of around sixty eight.
Speaker 1: That seems a very very long time away. Now I'm
Speaker 1: in a privileged position, you know, in that I will
Speaker 1: probably be okay. But you know, many other people are
Speaker 1: worried about how they can stay in the work force
Speaker 1: until that long. And you know, will they be able
Speaker 1: to find a job, will be able to stay in
Speaker 1: a job, Will companies want to hire them when they're
Speaker 1: in their sixties? But you know, this really is something
Speaker 1: that cuts across everywhere once you start looking for it.
Speaker 1: There are so many countries where people are starting to
Speaker 1: push back, starting to push back against the idea that
Speaker 1: they think the rules of the game have changed. The
Speaker 1: trouble is that for governments, the economics are really quite
Speaker 1: frightening as the population ages, fertility rates have dropped, so
Speaker 1: they just simply aren't going to be the same number
Speaker 1: of workers for the same number of retired people there
Speaker 1: were when these systems were set up. So it's a
Speaker 1: very difficult dilemma for governments because if they don't do anything,
Speaker 1: if we all retired at the same age that maybe
Speaker 1: our parents did, well, then the bill is going to
Speaker 1: get bigger, bigger and bigger, and then may well be
Speaker 1: little money left for other key spending priorities. I would
Speaker 1: also add with that, once we started looking those central
Speaker 1: themes around the anxiety about when exactly you'll be able
Speaker 1: to exit the workforce exists almost everywhere and different countries
Speaker 1: are grappling with this in different ways. So where I'm
Speaker 1: speaking to you from in Australia, the pension age, the
Speaker 1: state pension age is still really it's safety net. There
Speaker 1: is a private saving system here, it's been around for
Speaker 1: three decades, but it does largely benefit people that have
Speaker 1: an unbroken stream of employment, who are in a decent
Speaker 1: paid job, who work full time. It does mean there's
Speaker 1: still a lot of people that don't have a great
Speaker 1: private savings behind them, so there's still a big reliance
Speaker 1: on the state public pension and what the government here
Speaker 1: has asked people to do is work longer before you
Speaker 1: get that. And Australia is far from isolated. Many many
Speaker 1: other countries are doing exactly the same thing, and it
Speaker 1: means that there's kind of this deadline that keeps moving
Speaker 1: and people are not happy about it. And I think
Speaker 1: the interesting thing is it's so many different cultures as well.
Speaker 1: So for example, in China, where you know, the retirement
Speaker 1: age hasn't actually changed in four decades, there have been
Speaker 1: multiple attempts by the Communist Party to encourage people to
Speaker 1: work for longer, every time they've been met with huge
Speaker 1: popular resistance. And then you switch to somewhere like Ireland,
Speaker 1: where in a recent election a proposal to raise the
Speaker 1: retirement age had to be dropped after the popular backlash.
Speaker 1: So it's one of these things that really does take
Speaker 1: us around the globe. And as Amie said, every pension
Speaker 1: system is different, but the same kind of universal themes
Speaker 1: come through. I was just going to say, it is
Speaker 1: such a politically sensitive subject, as you say, and it's
Speaker 1: a huge voter group that is affected. So I think
Speaker 1: often politicians have been loath to get involved to an extent,
Speaker 1: but at the same time we have this big fiscal
Speaker 1: issue that they need to do something. I mean, I
Speaker 1: think one of the difficulties is with you know, some
Speaker 1: other difficult reforms. The interests of different generations are different,
Speaker 1: right you know, think think of housing, you know, the
Speaker 1: younger generation. This is another universal issue across many things.
Speaker 1: Can't afford to buy houses. You know, there would be
Speaker 1: a considerable supporter base for reforms to make housing cheaper.
Speaker 1: And yet when it comes to pensions, there's not that
Speaker 1: same kind of generational conflict going on because we all
Speaker 1: expect to retire at some point. We all hope to
Speaker 1: retire at some point. So when you talk about raising
Speaker 1: the retirement age, it's not only those people who will
Speaker 1: be imminently affected, you know, in the next ten years
Speaker 1: who are angry. Is there's people much younger who are
Speaker 1: now looking at the goalpost shifting for when they get older.
Speaker 1: So it can have despite the many fiscal consequences and
Speaker 1: the many problems of it, it can be very hard
Speaker 1: to build a constituency for change. How is it that
Speaker 1: so many countries us around the world with entirely different economies,
Speaker 1: different forms of government all pretty much at the same time,
Speaker 1: are facing this dramatic shortfall. I guess there's this huge
Speaker 1: demographic shift that's happened over the past few decades, and
Speaker 1: it's really we're coming to the point end of that.
Speaker 1: According to the best available data from the Organization for
Speaker 1: Economic Cooperation and Development, the o e c D, back
Speaker 1: pensions consumed about five and a half percent of g
Speaker 1: d P and by twenty forty that could top about ten.
Speaker 1: So you know, the stats are in and I guess
Speaker 1: the other thing that we haven't talked about is when
Speaker 1: you look at the demographic shift, a lot of people
Speaker 1: are also working entering the workforce later, so more people
Speaker 1: are getting educated, for example, so they might not work
Speaker 1: into the workforce proper until they're early to mid twenties sometime.
Speaker 1: So that again shifts that economic base as well. And
Speaker 1: we know that that base is shrinking, and all the
Speaker 1: experts say, look, you have to do something about it.
Speaker 1: So there has been this gradual rise around the world.
Speaker 1: I think the highest retirement age it's getting up to
Speaker 1: now almost seventy in some countries. That's not the norm,
Speaker 1: it must be said, but depending on the particular situation,
Speaker 1: in a country you have to be quite extreme. I
Speaker 1: guess what's happening here in Australia and make it harder
Speaker 1: say something like Frances. Australia has sort of introduced this
Speaker 1: incremental shift, so it wasn't like we woke up one
Speaker 1: day and all of a sudden the retirement age became
Speaker 1: sixty seven. We're gradually working up to that over a
Speaker 1: period of years, and so people had kind of this
Speaker 1: time to ease into it. But I think that message
Speaker 1: in France and other countries, it's pretty extreme and it's
Speaker 1: not very palatable for people. It can be quite a shock.
Speaker 1: It's a real skill to try and take the population
Speaker 1: with you and explain the reasons why this is needed. Yeah,
Speaker 1: and some of the countries where we sort of aren't
Speaker 1: seeing the same kind of level of people literally on
Speaker 1: the streets. One thing that has been gaining some popularity
Speaker 1: is attempting to automatically link pension increases to life expectancy, um,
Speaker 1: you know, a purely mathematical link, and that in some
Speaker 1: ways is aimed to take some of this emotion out
Speaker 1: of the situation. You know, it's mainly broad generalization, but
Speaker 1: countries in Northern Europe right now, we are experimenting with that,
Speaker 1: and you know, it's relatively new, and you know, we'll
Speaker 1: kind of see how that plays out over time, but
Speaker 1: you know, that is one way that people are trying
Speaker 1: to do it, and that may take some of the
Speaker 1: emotion out. As we talked about. Ireland is quite an
Speaker 1: interesting one as well. They were trying to raise the
Speaker 1: retirement age. They dropped it proposal because there was this
Speaker 1: popular backlash during the election, and instead they're telling people
Speaker 1: that if they work for longer, they will get a
Speaker 1: higher pension for each year that they keep working over
Speaker 1: the age of sixty six. So that's quite an interesting
Speaker 1: way of doing it as well. I think, to sort
Speaker 1: of courage people to keep working if they're able, not
Speaker 1: saying you can't get your pension, but if you're able
Speaker 1: and keep working, you'll get higher pension. I think we're
Speaker 1: seeing some creative solutions coming out easy. In your story,
Speaker 1: you also write that one of the reasons this has
Speaker 1: become such a crisis is that people are just living longer.
Speaker 1: When these systems were set up, people tended to be
Speaker 1: retired only for a short time before the end of
Speaker 1: their lives, and now people's lives have stretched on. Yes,
Speaker 1: that's right, and that's one of the arguments I guess
Speaker 1: governments make for raising the retirement age. They're like, well,
Speaker 1: you're still going to have the same amount of years
Speaker 1: in retirement because you're living longer now, so therefore you
Speaker 1: should be working longer. It doesn't always wash with the
Speaker 1: public though. I don't think that that argument, because they
Speaker 1: were expecting to retire to have this pension at a
Speaker 1: certain age. And just going back to that question of
Speaker 1: life expectancy, worst which we saw a really extraordinary rump up.
Speaker 1: It was getting better and better every single year. I mean,
Speaker 1: what is true is that rate of acceleration has slowed
Speaker 1: the expansion of public health care systems, and the amazing
Speaker 1: advances in medical technology have helped make us live long
Speaker 1: with a lot of things. But now we are getting
Speaker 1: into a lot of issues around things like chronic disease.
Speaker 1: If you had cancer fifty years ago, you would probably
Speaker 1: brutally die relatively quickly. Now, modern medicine can help expand
Speaker 1: your lifespan, but is it expanding your lifespan in a
Speaker 1: way that you can actually meaningfully work. This is where
Speaker 1: we're starting to get to the pointy end of what
Speaker 1: life expectancy actually means, and this concept of healthily life expectancy,
Speaker 1: how long are you going to live without major diseases,
Speaker 1: major illness, whether it's you know, diabetes, whether it's cancer,
Speaker 1: whether it's obesity. There are a lot of chronic diseases
Speaker 1: now that make people's ability to work later hard. Even
Speaker 1: if they are living later, we'll be right back. Any
Speaker 1: One thing that comes through in your story is how
Speaker 1: this issue exposes these tensions between various parts of society,
Speaker 1: where people who live longer are often those who had
Speaker 1: less physically demanding jobs and made more money, and yet
Speaker 1: they'll wind up getting more money than those who need
Speaker 1: it most and perhaps need to retire earlier because jobs
Speaker 1: took a bigger toll on their health. Absolutely, I think
Speaker 1: it really lays bare the class of which you belong
Speaker 1: to in society. It's really hard to give one example
Speaker 1: that cuts across all countries, because there's a nuance to
Speaker 1: every country's retirement system. No two really are the same.
Speaker 1: There is, of course a push in many developed countries
Speaker 1: to come up with a private saving system that's different
Speaker 1: to a government to find benefits scheme. So in Australian
Speaker 1: New Zealand, the region we're speaking to you from today.
Speaker 1: That is what happens, and it's a percentage of your
Speaker 1: salary that your employer must put away into savings. But
Speaker 1: given it's a percentage of your salary, that means that
Speaker 1: if you work in a higher paying job, of course
Speaker 1: at the other end, you will have more money. And
Speaker 1: so therefore there's kind of this in built problem with
Speaker 1: the system. And we also know that you know there's
Speaker 1: a there's a guaranteed amount that you have to put away,
Speaker 1: but some workplaces offer you know, as much as five
Speaker 1: percent over that guaranteed amount in a way to lure
Speaker 1: good employees. So if you're highly educated, you might be
Speaker 1: in line to get a fifteen percent of your salary
Speaker 1: put away that's then invested for you by a large
Speaker 1: fund over time, and that wealth grows, so when you
Speaker 1: reach for a time and age, you'll you won't need
Speaker 1: to really worry about the state pension system at all.
Speaker 1: But if you're a transient worker, if you're a healthcare worker,
Speaker 1: maybe if you're a teacher, you know you can have
Speaker 1: secure employment, but you also might not lot and typically
Speaker 1: those jobs are lower paying. So then by virtue, you
Speaker 1: will have a lower savings at the end and become
Speaker 1: more dependent on the public system as a safety in it,
Speaker 1: and then that in built discrimination can occur. And that's
Speaker 1: part of a big debate in the developed world at
Speaker 1: the moment is how women are treated in that system.
Speaker 1: If women work part time, of course, that impacts your
Speaker 1: private savings. And also you know, if you if you're
Speaker 1: a casual worker, for example, and you work multiple jobs,
Speaker 1: how do you build up a proper nest egg. And
Speaker 1: there's various reforms that have happened here and elsewhere to
Speaker 1: try and fix those issues, but it still is a
Speaker 1: glaring gap in the system. I think. For me, one
Speaker 1: of the really startling things that I guess I hadn't
Speaker 1: really thought about was how much people who are in
Speaker 1: particularly physical jobs are discriminated against when the retirement age rises.
Speaker 1: Often it's difficult to keep up a really physical job
Speaker 1: into your sexties, especially into your late sixties, and so
Speaker 1: that means those people have to go on either unemployment
Speaker 1: benefits or health benefits which are lower than pensions, and
Speaker 1: so it increases poverty and old age, which is very
Speaker 1: difficult for people. There was a study by the i
Speaker 1: f S in the UK, and it looked at the
Speaker 1: retirement age which was raised by one year in the
Speaker 1: UK to sixty six, and that made a difference of
Speaker 1: doubling the poverty rates of sixty five year olds. So
Speaker 1: it's quite startling when that happens. I think, raising the
Speaker 1: return in age by one year double the poverty rate.
Speaker 1: How did that happen? Because the people who would have
Speaker 1: got their pensions and who were unable to work instead
Speaker 1: had to go on the unemployment benefit or health benefits,
Speaker 1: and they are lower than the pension benefits, and so
Speaker 1: they were pushed into old age poverty. Whereas I would
Speaker 1: also say that from talking to people who study this
Speaker 1: phenomenon globally and a lot of demographers are looking at
Speaker 1: at this kind of thing being employed in your early sixties.
Speaker 1: I mean, if you already have a secure job and
Speaker 1: you're working behind a desk, then it's kind of easy
Speaker 1: just to stay in that job and just push, you know,
Speaker 1: you might even push beyond the retirement age. But if
Speaker 1: you're somebody who's been in different types of work, or
Speaker 1: you're exiting the workforce and then have to you know,
Speaker 1: you have to change jobs for whatever reason. What lobby
Speaker 1: groups say Advocates says that there's still a huge amount
Speaker 1: of discrimination against older workers. So if you're sixty five,
Speaker 1: for example, applying for a job, what are your prospects
Speaker 1: against somebody who might be ten, twenty thirty years younger
Speaker 1: than you, And that that is where the playing field
Speaker 1: is really not level at all, because if you are
Speaker 1: job hunting at that age, there needs to be a
Speaker 1: mindset shift from employeers as well to make sure that
Speaker 1: they give those opportunities to older workers as well. And Amy,
Speaker 1: I think some of the things you have been looking
Speaker 1: at is really going into how the pension age being
Speaker 1: raised does discriminate against particular groups of people. There is
Speaker 1: a court case that's being heard and it's looking at
Speaker 1: this idea that Indigenous people in Australia live around about
Speaker 1: eight years less than non Indigenous people in Australia, and
Speaker 1: therefore they should be able to access the age pension earlier.
Speaker 1: Exactly how much earlier, we don't know. That would be
Speaker 1: up to the court to decide. But I think it's
Speaker 1: a really interesting example of trying to challenge a system
Speaker 1: that one size fits all really just doesn't work for everybody.
Speaker 1: When you look down the road in a few years
Speaker 1: when the bills start to come do how will this
Speaker 1: be paid for? The best description I've heard of it is,
Speaker 1: you know, this is a slow moving financial crisis, probably
Speaker 1: the slowest we have ever seen, because you know, it's
Speaker 1: not some dramatic thing that's going to happen and be
Speaker 1: done with and there'll be a solution in you know,
Speaker 1: one month, two months, a year. This is building up
Speaker 1: to an incredible pressure point and at some point the
Speaker 1: needle is going to have to be grasped. At some point,
Speaker 1: something is going to have to be done. But whether
Speaker 1: we're there yet or not is I think probably not.
Speaker 1: I think, you know, the likelihood is this problem will
Speaker 1: we continue to kick down the road a little bit
Speaker 1: further until it really does come to a point. I mean,
Speaker 1: you know, morbidly. The only thing that might stop this
Speaker 1: becoming such an intractable problem is if the increases in
Speaker 1: life expectancy do really slow down, if the increases in
Speaker 1: life expectancy to go into reverse. But that would be
Speaker 1: absolutely nothing to celebrate. The extension of life expectancy has
Speaker 1: been one of the big successes of this century. And
Speaker 1: you know, the idea that anything like that would have
Speaker 1: to be endangered. To solve this is not answer I
Speaker 1: think anybody on any side of the political aisle wants
Speaker 1: any day. Bridge, Ansley Thompson, Emily Kadman, thanks so much
Speaker 1: for joining me today. Thank you, Wes, Yeah, thank you
Speaker 1: with It's a pleasures. Thank you. Thanks for listening to
Speaker 1: us here at The Big Take. It's a daily podcast
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