SPECIAL REPORT / With changing demographics putting pressure on the European labour markets, EU countries need to put in place healthy and sustainable work systems, argues Serge Volkoff.
Serge Volkoff is a statistician, author, expert on the labour market and research director at the Centre for Employment Studies (CEE) in France. He spoke to EurActiv's Henriette Jacobsen.
I would like to start by asking you a question on the retirement age. In Sweden, their prime minister, Fredrik Reinfeldt, has said that he wants the retirement age in Sweden to be 75, which he thinks is a reasonable age as we’re all becoming older and the children who are born today may live to 100 years. If you work until you are 75, you’ll still have around 25 years of retirement. Maybe this is true for the future labour markets, but how does it sound to your ears to have a retirement age at 75 now?
The first element, I would like to bring forward is that retirement age is not a very accurate way of talking about this. This means that from a country to another, the meaning of a retirement age is not the same. For example, in France we have a rather low retirement age which is moving forward to 62 by now, but at the same time we have a work-life duration condition. This means that one has to have worked around 41 years. So you’ll have many people that when they reach 61.5 years which must be the legal retirement age, you have an important proportion of employees who will not have had their 41 years of work-life duration. Therefore, they must wait a little bit. So with this work-life duration condition, it makes it difficult to say that the retirement age will be at 62.
Another aspect is that while the legal retirement age in some countries is at 65, if you leave at 64 or 63, you lose a little bit of the amount of your pension, but not too much. So this is quite different from a situation where it’s 65 and if you leave at 64, you lose quite a lot. This is very different. Therefore, you see that even now, you compare European countries which is easy to do with the OECD statistics, you can see that the differences on retirement age are much bigger than the actual average age of the end of a professional life. Maybe you have sometimes seven years of differences on retirement ages, and you have only 2.5 years maximum of differences of effective actual retirement age.
So it’s important to know when the Swedish prime minister says 75 years, does this include that when you are 74, you lose 10% and at 72, you lose 30% and so on and so forth? Or does this only diminish your pension a little bit if you leave sooner? This has to be clear.
So if the question is, are we able to work until 75, which is another question, then some people do and some people don’t. In some job situations it’s possible. Some people do that. You already have people who do work until they are 75, for example some managers, politicians, artists, scientists work even after their retirement age. They keep on working because they like their job. So of course it is possible to do so, but it depends completely on the person and the job. You can’t set that as a general measure. Then you are right that it can’t be the same for every generation. There will definitely be a difference from now and 40 years from now.
The last thing I would like to say is that the link between the length of life as a whole and the length of working life is not necessarily determined in such a narrow way. For a very long time, the age of retirement has remained steady or even, depending on the country, diminishing a little but, although at the same time, life expectancy would grow. In a historical perspective, what the Swedish prime minister said is not true. The real evolution at a historical scale has been more the contrary. We have retired sooner and sooner although we would live longer and longer. This is what has happened for the last two centuries. So you may say that it will be normal and necessary to raise the retirement age little by little, but it can’t be done so automatically and it’s not only because we are going to live longer. One hundred years as average life expectancy… I think nobody foresees that. That is too many years. In industrial countries now, life expectancy grows at a rhythm of about 2-3 months per year. This means that the life expectancy in our countries now is around 79. If you want to reach 100, this means 21 more years at the present rhythm of growth, so it will take around a century. Many things might have changed in the meantime.
Another thing which the Swedish prime minister emphasised is that those who have tough physical jobs, how would they be able to work for that many years. He proposed that they, when they turn 50, should get a new education so that during their last years as part of the workforce they wouldn’t have a tough physical job. I have spoken to another expert who said this could not work as those with tough physical jobs usually don’t have an education in the first place so it would be difficult to make them get one later on. Do you agree on this?
I would be more moderate, especially talking about Sweden which sort of stands out as an example for life-long learning. It’s probably one of the most if not the most developed countries. There’s a real practice and a real knowledge on life-long learning in Sweden. At least that’s what we think in France, which is the last one in the class. We are not good at all at that. I would say that the Swedish prime minister is partly right. I wouldn’t say that suddenly at 50, having a big an long period of training which would allow you to completely change your job is necessary. I would rather praise a life-long learning from the very beginning when you start in one job which a tough physical job and everyone is aware that there is a risk that it won’t last, then you start thinking about what is going to happen afterwards.
The good example is the elite athletes. When things are well-organised, these people have next to practicing their sport prepared what will follow. This model could be considered for all kinds of physical and painful jobs. In France in the present reform of the retirement system, where there is a law now being discussed in the French parliament, was is going to be called a ‘painfulness account’ which means that when a person has a job with physical constrains, or has night work or deals with hazards such as noise or various toxic products as part of the work environment, they will add points to their account. These points will allow them first of all to have a training period after a certain number of years that might help them being able to change job eventually and give them the possibility to change their career. The same account with points will allow them to have periods of part-time and also in the end to have opportunities to leave jobs to retire sooner than others. This is an actual measure which is present in the reform of the retirement system in France which is now being discussed by our deputies.
I think it is necessary anyhow… even if we don’t change the retirement age, the idea of opening possibilities of changing jobs among those who have tough physical jobs after 10 or 20 years is not a bad idea. It already more or less exists in several big industrial companies. They try to build opportunities for re-allocation.
Something I came across when I looked at statistics in different EU countries regarding their retirement ages is that women can sometimes retire earlier than men. What do you think of this?
I know that these differences exist. In France it doesn’t. I suppose it has something to do with family laws. This could be in countries where the rate of employment among women is rather lower than in other EU countries. This means that it keeps on being considered that women are well at their place when they are at home, partly.
You could also put it the other way around and say that women live longer so they should also be part of the labour force for a longer time?
I wouldn’t recommend such a solution either because the reason for having a shorter life expectancy shouldn’t have a shorter professional life as a consequence. In my view this should only be when work by itself shortens life expectancy. For example, if you work at night, it has been proved that this shortens life expectancy. Therefore, this can be a good justification for retiring sooner, but the other characteristics of life expectancy shouldn’t play a part.
I can give you another example: We see in France a slightly longer life on average in the southern part of the country compared to the northern part. We don’t quite know why. Maybe it has something to do with the food or the weather. Nevertheless, nobody should pay for having later retirement in the south of France than in the north.
In the face of an ageing population, what work environment needs to be created to help workers retain their physical and mental health, their motivation and productivity throughout an extended working life?
First of all, we must not forget that there is a birth rate issue. This means that from a country to another… for example, France is not too bad there. We have of course had a drop in the birth rates most visible in the 1970s, but not a drop that was too strong. This is very different for Germany, Italy and Spain where the birth rate has fallen dramatically. I know that this is not the question you asked me, but I think we need to keep this in mind. In a country where you still have many young people, it’s not the same as in countries where you’ll have only few of them. This depends very much on the birth rate from a country to another.
Now to go back to your question, we need anyhow to have policies for what for example some Swedish researchers call ‘sustainable work systems’. It means that health and skill competences are not consumed, but on the contrary have the opportunity to be developed. Sweden is not a too bad country for that if we look through various indicators.
It’s true that we have to have policies that prevent as much as possible health declining and competences becoming obsolete. The development of our countries should go hand in hand with improvements concerning working conditions and life-long learning.
It is true that in countries where the birth rate is low as I mentioned in German, Italy and Spain, it’s an emergency issue because if we want to avoid either many people over 60 in work situations they don’t want to be in or having a terrible concentration of difficulties for young people, you need to have a very active policy on the improvement of working conditions.
Who will influence those policies from a worker’s perspective – would it be the trade union or the individual worker?
Well, I don’t know as a matter of fact. Anyway, I should say that the role of trade unions is ought to be very precious. It could be at the level of the sector, the company or at national level. I should say even at a European level. Why? Because trade unions are supposed to have an ability and capacity to build links between individual situations. This ageing issue is being felt by people on a personal level. It’s very important that negotiations have the capacity to give a general, collective framework to that, keeping in mind the historical evolution, sectors, productivity, issues surrounding wages and the working time. It seems to me that it ought to be a very important field for trade union activity.
For 10 years now, the European Commission has put in place a strategy for health and safety on working conditions. For the first time they have decided not to have an EU strategy anymore. Do you think that is a smart move and would you say those strategies have had an impact so far?
I can only answer this question through our practice and what we see in our country. I haven’t at all studied this at a European level. I can only say that this European strategy has had in a country like ours, France, a very positive impact on the various decisions regarding the laws and the various incentives decided by our governments of various political convictions. Therefore, I should hope, that with the will of the Commission, that work conditions could keep improving. Improvement of work conditions should be pushed forward through activities by the Commission. It’s very useful to have this message because after that, among social partners and the national administrations, you can use these European indicators, initiatives and directives to push forward several projects, systems and policies. It would be useful for sure.