When asked about whether he planned to retire, legendary American and bandleader Duke Ellington always answered with a question: “Retire to what?” The iconic musician meant, of course, that his life was so intertwined with his work that he could not imagine what the point of his life would be, without the sense of fulfilment, joy and creativity that he got from composing, playing and touring, something he did until the end.
Most of us don’t have that luxury. Our lives may be, in large part, defined by our line of work, but we usually tend to separate the two. We work to pay for food and rent (or mortgage) and travel and do all the things we do after work, when our ‘real lives’ begin.
As for retirement, it is the period of someone’s life when they reach their final stage in life. After decades of being productive members of society, people finally take as much time as they need for themselves, to pursue hobbies and personal interests, spend time with family and friends, reap the fruits of their labour, free of stress. And yet, more and more people, as they get older, find themselves asking: “Retire to what?”
This question does not mean that they do not want to retire, but that they are facing fewer and fewer options as they reach retirement age. Sociologists and demographists have been warning that the developed world is about to face a crisis. This year is widely believed to be a dramatic turning point, marking the first time when the ratio of non-workers to workers is rising. This is largely due to growing life expectancy, which of course any individual welcomes, but governments throughout the world see as a challenge. As a result, most countries call for reforms of their pension systems. The age of retirement rises, and governments urge citizens to seek alternative ways to privately fund their ‘golden years’. This led many analysts to come to the bleak conclusion that soon, in countries like the UK and the US, retirement will prove to be a kind of luxury, something that only the well-off will be able to afford.
In Australia, the recent pension system overhaul has been the subject of a long, arduous debate. The new thresholds − which came into effect in January − saw about 88,000 Australians missing out on the pension entirely, and some 225,000 seeing their pensions reduced, while 166,000 pensioners saw an increase in their entitlements. As unions, parties, community leaders and stakeholders engaged in debate, it was independent Senator David Leyonhjelm who offered a useful viewpoint, stating: “Taking the pension shouldn’t be something you aspire to, it should be something you try to avoid because it signifies you’re in a low income group − in other words, you’re poor or you know, close to poor.”
This statement should come as no surprise, coming from his mouth. What makes it an extremely useful addition to the debate is that it clarifies the truth behind all that is happening in the world, regarding retirement and the pension system. What is actually looming behind all arguments on sustainability and entitlement, behind all the negotiations for the retirement age and what part of retirement is funded by the government, the employers, the pensioners themselves, is an ideological war. Senator Leyonhjelm cynically and bluntly expressed one side’s ideological viewpoint; one that not only sees the pension as welfare, but also as something to be ashamed of.
The other side sees the pension system as an essential part of the social fabric, as a way of community to express gratitude and respect towards the elderly, a reward for taxpayers who’ve been contributing to the community and the system’s funding. Dismissing all this as welfare shows a complete disregard for human values and of the way community works. And of course, this is what is currently happening in Europe, where state after state proceeds in defunding welfare and dismantling the welfare state, which has been the jewel in the crown of western societies, an indispensable part of what made them grow and prosper after World War II. But as neoliberal thinking prevails, nothing is indispensable.
The argument that retirement costs are a burden to taxpayers and governments may sound logical, but it is debatable. Raising the age of retirement means putting old people under the kind of stress related to working, which in its turn means challenging their mental and physical health, which translates to more costs in medical and hospital cover − while research has shown that retirement is actually beneficial to the retirees’ health.
In the end, it is all about priorities. Governments opt to offer tax breaks to gigantic multinationals or to offer bailouts to the bank system that caused the Global Financial Crisis, instead of looking after citizens. Demonising the most fragile part of a population − the poor, the weak, the ill, the elderly − is a kind of hubris that should have us all worried.
The Greeks have known this for centuries. Respect for elders has been part of Greek culture since ancient times and is at the centre of the close-knit communities that Greeks have been known (sometimes infamously) to form. But there’s something more that makes Greece an example of what happens when such neoliberal policies are further applied. Strangled by the effect of an ongoing crisis, the country is strong-armed by its creditors to further proceed to reforms in the pension system, abolishing early retirement and cutting back pensions. All this may sound logical − the country has, after all, been infamous for its unsustainably early retirement rate, although most of the people who benefited from it are now in their 60s and 70s.
But there is another aspect of this that has not been taken into account. According to a survey recently issued by the Institute of Small Business, 49.2 per cent of Greek households depend on a pension as the main source of income. This is to say that the country’s elderly are paying for their children and grandchildren’s food, rent, education, leisure. Slashing their pensions will mean creating even more pressure on a system that is already beyond breaking point. The same is true of other struggling economies, such as Italy − which is facing a major banking crisis − or Spain. Reports on the southern European countries’ economies have long stressed the factor of the close-knit families on the ‘real economy’.
We should all keep an eye out for what is going to happen there in the near future. Developed countries should especially take notice.