A pension propaganda war has broken out, with selective leaks from the soon-to-be published report of the Pension Commission.
The first leak suggested that the increase in pension age to 67 and 68 would be delayed by seven years. This was followed by a suggestion in the submission of the Department of Finance that the pension age should be linked to life expectancy; this would bring the state retirement age to 72 for the generation of workers entering the work force today.
The department’s submission suggests that pension costs will rise significantly as the population ages. It states that at present there are about four people of working age to support each person aged sixty-five and over; however, that number is expected to fall to just over two workers per retired person by 2050, as people live longer and birth rates drop. It appears we are living too long, and not having enough children.
This is more propaganda. The drop in birth rates is irrelevant, as it ignores the number of people who come to Ireland to work—almost half a million in the last ten years.
The number of people working in the South of Ireland today is more than 2.3 million; in the 1980s there were fewer than 1 million people working.
The population in the South has grown to just over 5 million today. Life expectancy has increased by ten years over the last forty years, with no effect on the ability of the state to pay the pension at sixty-five; in fact, despite stagnation and slow growth since the austerity years, the pension in real terms has been improving gradually over the same forty-year period. This exposes the lie of the pensions “time bomb.”
The difference today is ideological. The government is unwilling to continue to pay the pension at sixty-five. They want more for less. It has nothing to do with ability: it is neoliberal ideology.
There is no mention, of course, of the pension reserve fund of more than €25 billion that was raided to bail out the banks and pay off private banking debt after the 2008 crash. Plenty of money for the business class; Ireland’s elderly must take second place.
The average proportion of the population in the EU over the age of sixty-five is 19 per cent. Italy has the oldest population, with 22 per cent of citizens over sixty-five. Ireland, with 13 per cent, has in fact the lowest proportion of the population over sixty-five.
To raise the retirement age to sixty-eight would be the largest cut ever in the social safety net. It is the equivalent of a cut of €39,000 per worker, i.e. state pension = €13,000 p.a. × 3 years.
If you work until you are 68 and live to today’s average life expectancy of 83, this cut is equivalent to a cut in pension of 20 per cent, i.e. €2,600 p.a. for 15 years = €39,000; higher if you die earlier. This is more cutback by the state to the social wage of the citizen—all part of the neoliberal agenda of Fianna Fáil and Fine Gael. And it seems they don’t want to stop at sixty-eight, with talk now of seventy-two.
The government’s propaganda war has been relentless, and promoted by their puppets in the media, who repeat the mantra that in twenty years’ time there will be far fewer people working than there are now, and more people in retirement.
That’s all it is: propaganda. This is manufacturing consent and lowering workers’ expectations and aspirations. The trade union movement must not fall for the propaganda. There is no reason for the retirement age to increase past sixty-five; what does need to increase is the rate. At present it is about half of what is deemed the living wage.
A living wage is defined as the minimum income necessary for a single adult worker in full-time employment, with no dependants, to meet their basic needs and to afford a minimum acceptable standard of living, at present deemed to be €12.30 per hour.
What sort of society denies an “acceptable standard of living” to any citizen, not least those who have worked all their lives, and paid a contribution every week from their pay packet, in the belief that they would get a pension at sixty-five, which is in fact deferred pay.
With private rented accommodation (according to the 2016 census) the main form of tenure in our cities and towns, and rents taking up as much as 70 per cent of some people’s income, this is the real pensions time bomb. The recent measly pension increase does nothing to alleviate this. The change to private rented accommodation is also inextricably linked to neoliberalism.
The only ticking time bomb in Ireland today is the insatiable greed of the capitalist system, which has gone into overdrive over the last thirty years, causing the crisis in health and housing, low wages, precarious work, and a race to the bottom in workers’ rights, not to mention the climate emergency.
It’s time to join up the dots. We can rule in the interest of humanity and the planet or serve capitalism, which will be the end of us all.
There is no “pensions time bomb.” There is a capitalist time bomb, and it is ticking.