According to an article in the Chinese-language China Times a few days ago, as the population ages, Taiwan will not only have to deal with a falling birth rate, it will also have to deal with the cost of supporting the increasing number of people going into early retirement. This is an issue that we all need to think long and hard about.
Many governments are now adjusting their retirement policy to meet the demands of an aging population and avoid a situation where increased life expectancy and a shrinking work force will affect economic growth and increase the burden of social security expenditure.
A few years ago, the Organisation for Economic Co-operation and Development (OECD) called on governments to review their retirement and employment systems, and this year, the European Commission suggested that its 27 member states consider dealing with their aging populations and the EU’s sovereign debt and economic problems by raising the retirement age, restricting early retirement and removing differences in the retirement age for men and women.
Compared with developed countries trying actively to extend productivity among the elderly, early retirement remains popular in Taiwan. According to data from the Directorate General of Budget, Accounting and Statistics, the average retirement age in 2010 was 56.6 years, an increase by a mere 0.5 years over the last decade. In the same period, average life expectancy increased by 2.7 years to almost 80 years, creating an imbalance between retirement age and life span that will further intensify the problems posed by an aging society.
Council of Labor Affairs data show that the labor force participation rate among people above 65 years of age is low, 12 percent for men and 4.4 percent for women. This is far less than in South Korea, where the rate is 41.5 percent for men and 22.2 percent for women, in Japan, 29.4 percent and 13.1 percent respectively, and in the US, 21.9 percent and 13.6 percent respectively. According to an OECD study, the effective retirement age in Japan, South Korea, Iceland, Switzerland, Portugal, Denmark and Ireland is over 65 years.
Extrapolating from the formula used by the OECD, the effective retirement age in Taiwan a few years ago was 61.8 years, making it clear that the Taiwanese labor force exits the labor market earlier.
This situation is related to government policy and whether it encourages the elderly to play a productive role. For many years, not only has Taiwan been lacking policy measures related to the elderly, but society has also rejected the idea that the elderly should continue to work, thus creating an atmosphere conducive to age discrimination. This is not only true in the private sector, but the government is leading by example. Civil servants and public school teachers enjoy a preferential retirement system that encourages early retirement, and the Ministry of Education has explicit regulations saying that anyone over the age of 70 cannot be a formal member of university staff, and regardless of training and body of publications they cannot be recommended for a national chair professorship either.
The fact is that although Article 5 of the Employment Services Act (就業服務法), which prohibits age discrimination, passed the third reading in the legislature in 2007, workplace discrimination against the elderly continues unabated. Government institutions are even taking the lead in violating the law. It is the responsibility of education to direct and correct social mores and create an atmosphere conducive to social development, but if the ministry is taking the lead in age discrimination, how could we expect the private sector to respect the ability of the elderly to work?
This discrimination is also clearly reflected in the nation’s fundamental legislation, as Article 7 of the Constitution states that “All citizens of the Republic of China, irrespective of sex, religion, race, class, or party affiliation, shall be equal before the law.” “Age” is the only “social category” that does not enjoy equality.
Social gerontology studies show that retirement is a rite of passage for the elderly as they pass from a productive role to a role as exclusive consumers. However, US studies show that 73 percent of baby boomers — those born between 1946 and 1964 — plan to continue working after they reach retirement age.
The Japanese government is also working hard to retain the first post-war generation — those born between 1947 and 1951 — in the labor force. Studies show that their retirement will have a negative impact on the labor force, GDP and national finances. In 2010, the number of active workers in Japan diminished by 1.09 million. The sharp increase in applications for retirement funds created a deficit of ¥4.5 trillion (US$55 billion) in Japan’s budget. In addition, as this group become consumers without generating an income, Japan will see a sharp drop in its national savings.
With an aging population and increasing average life expectancy, the nation and society should review and discuss existing job, value and family systems, and maybe even aesthetic concepts.
Avoiding age discrimination and allowing the elderly with the ability and desire to continue working will have to become government policy if we want to solve the crisis of an aging population.
Chiou Tian-juh is a professor of social psychology at Shih Hsin University.
Translated by Perry Svensson
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