We have just been informed that the Treasury is mulling yet another money-saving
stratagem – raising the retirement age. To be fair, this ploy is a runaway
favorite in most OECD economies (with France constituting the conspicuous
This would mean that no man could begin drawing a pension
before reaching age 70 (versus the current 67) and no woman would before she’s
64 (as against 62 now). In reality, full National Insurance Institute oldage
pensions aren’t available till age 67 for both genders.
On paper, Finance
Minister Yuval Steinitz’s position sounds entirely plausible. With the huge Baby
Boomer generation reaching old age, it’d be harder and harder for their
offspring to fill pension coffers. The burden, we’re repeatedly told, is too
heavy to bear (never mind that the older generation had contributed to pension
funds for decades and that it earned its pension benefits).
facile solution both here and abroad is to keep the oldsters from retiring. That
translates to paying out less while the economy keeps profiting from their labor
and their prodigious experience.
The danger, though, is that instead of
enjoying the best of all worlds we’d impose a worst-case scenario on all of
society’s components. If older citizens are required to work for more years,
they’ll per force deny younger applicants jobs. More likely, though, is that as
employees age, they’ll be sacked because long tenure inevitably makes them
expensive to their employers.
Age-discrimination is rampant, often
well-disguised and denied, with Israeli courts offering no succor. This is true
even before retirement age. Often employees, including qualified professionals,
begin to become highly vulnerable above age 50. They’re then more likely to be
fired and less likely to be hired.
The probable upshot is a situation in
which older members of the work force cannot find employment, while being denied
pensions. That may be fine as far as the Treasury’s short-term bookkeeping is
concerned but exceedingly devastating to a growing sector of
Additionally, older categories of jobless individuals are less
likely to qualify for various assistance programs to tide them over, because
they had amassed assets during decades of gainful employment and are therefore
formally too well-off to fit official definitions of
Comparisons to the situation overseas aren’t entirely valid.
Israeli society is appreciably younger than its counterparts in Western Europe.
Consequently our problem should not be quite as acute as in those countries
where sharply shrinking birthrates mean that fewer and fewer young workers must
support more and more aging retirees. In our circumstances the harping on
retirement age appears increasingly like a cop-out.
It needs to be
recalled that retirement age here was already raised in 2004 by two years for
both men and women and that last December the Knesset overwhelmingly voted down
a proposal to push it off for women by a further two years. The Knesset opted to
put this option on the shelf for the next five years – until 2017 – pro forma to
allow the government time to hatch up programs that would assure women
employment opportunities between ages 62 and 64.
In the meantime, many
older professionals are being pushed out by employers who have made retirement
mandatory, even if these professionals – often in prestigious positions – prefer
to keep working. Such absurdity, for instance, had made necessary a Knesset bill
allowing physicians in public hospitals to stay employed until age 70 (both
genders), due to the severe shortage of doctors.
This isn’t to say that
at some point there will be no choice but to tinker with retirement age, if for
nothing else due to increasing life expectancy. But as long as our proportion of
young to old isn’t as dire as in Europe, we need to use the time to safeguard
older employees from discrimination and to remove rigid strictures that would
leave open the option of continuing to work into ripe old age without being
coerced to do so.
This is trickier than meets the eye and calls for doing
away with ingrained prejudice regarding both compulsory retirement and
compulsory continued toil.
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