The later pension age strengthens inequality

In this article, just published in the Economic and Labour Relations Review, I examine the barriers for mature age women trapped in precarious jobs of continuing on in employment until the later pension eligibility age in Australia (67) and other countries (67-68) that are now coming into effect. I also report on how the later pension age will result in more older people, especially women, will be very exposed to greater poverty and disadvantage. The full article can be read here.

An overview of the article, I have written for the journal is reproduced here:

The later pension age strengthens gender and social inequality

Ageing populations are a source of anxiety for governments around the world on account of their potential for high cost and low revenue contributions. Insisting that older people work for longer to continue their contributions and reduce their need for social support is an easy (and lazy) response by many OECD countries which have legislated to increase the eligibility age for access to publicly funded age pensions.

The increase is generally up to 67 or 68 although the current Coalition government in Australia has tried for an increase to 70 years of age. While not amenable to legislation at this point in time, it is still on the government’s agenda.

Increasing the pension eligibility age might be an easy response but how realistic is it with the many changes to employment in train? Moreover, how does it affect particular groups in the workforce with divergent labour force experience?

An increased pension age assumes people in later life are in a position to just keep on in their jobs for a few more years. It assumes they have a choice to stay in their jobs as long as they need to as mandated by government pension policy.

This sounds like a situation that might have been possible in the 1950s or 1960s perhaps into the 1970s or 1980s but certainly not in the fragmented world of work of the second decade of the 21st century with its increasing levels of job polarisation between ‘good’ and ‘bad’ jobs and the high levels of precarious employment.

It also springs from a vision of the workforce that pays little heed to the changing demographics of workforce participation of the last 30 – 40 years with high levels of women’s workforce participation but fundamentally still in very different forms of employment from men.

Dr. Veronica Sheen an Australian social researcher took up these issues n her article, published in the March issue of ELRR, The implications of Australian women’s precarious employment for the later pension age.  The article was based on her doctoral research interviewing 38 midlife women who were in precarious jobs. The research findings were very puzzling. Why were so many well qualified and experienced women in such bad jobs by midlife with such poor prospects for the future?

To find out why, Dr Sheen went into the analysis of the large scale studies such as that of Melbourne University’s Household Income and Labour Dynamics Study with its thousands of participants. It  showed that if you are a woman and if you lose or leave a ‘good’ job by midlife, your chances of getting another are very low. In fact, you are likely to be permanently locked into a low paid precarious job or you might be facing very extended unemployment and might be forced out of the labour force altogether.

These are hardly very promising scenarios for keeping on in work until one’s late 60s or 70.

But why do women leave or lose ‘good’ jobs in the first place? Unsurprisingly, motherhood or other caring responsibilities are a core factor. But equally importantly the rapid changes in the world of work are taking a heavy toll.

There is far less stability in many occupations and industries than there has been in the past. With many companies, institutions and organisations undergoing profound changes involving reorganisation and retrenchments, they move to contract and casual workforces, or automation, to fill the gap. Much work in these conditions also carry significant health risks as discussed in the article.

Social protection systems around the world have entered a vicious phase of enforcement and punishment, as well documented in the film I, Daniel Blake. They also provide significantly lower benefits, well below the poverty line, than age pensions.

This means that people such as the women in Dr. Sheen’s study who are unable to sustain a ‘good’ job to the later pension eligibility age will be very exposed to serious social disadvantages including poverty and homelessness as documented in much research.

The later pension age will certainly add a further layer to growing social- and gender – inequality.

 

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