Longevity and the limits of the welfare state in Europe

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"The European Union has only very limited powers when it comes to influencing social policy. " [Anemone123/Pixabay]

In November 2017, the EU proclaimed the European Pillar of Social Rights. However, there are still many shortcomings within the current welfare state and unless policies reflect values then plummeting fertility rates or fading solidarity between young and old will persist, writes Anna Záborská.

Anna Záborská is a Slovak member of the European Parliament for the European Peoples Party (EPP) group since 2004. She is a founding member and co-chair of the parliamentary Intergroup on active ageing, solidarity between generations and family-friendly policies.

The welfare state is often justified by the need to manage the unknown future risks. People are risk-averse and want to take insurance that only the state can provide because there are too many uncertainties. The state offers its citizens a social contract made under a veil of ignorance: at the time we sign the contract we do not know who will end up benefiting from it. The purpose of such a contract is to compensate for bad luck in life. An important aspect of this kind of insurance is redistribution, in the form of poverty alleviation and reduction of inequality.

This insurance scheme follows a Bismarckian logic: those who work pay a premium to finance all the claims. The combination of longevity and population decline in the EU further increases the pressure on productive members of society.

During the 70s and 80s, the western societies started to experiment with inviting “guest workers” from economically less developed but populous non-European countries. Their mission was not only to produce goods and provide services but also to contribute to the social welfare systems of the host countries. The first generation of these guest workers was offered the same deal as the domestic employees: you pay now, and after you retire, the state will pay you back.

Nevertheless, decades later these workers realized that they receive lower pensions then their peers who were lucky to be born in their host country. The reason was, of course, that they were invited precisely to do the least attractive and cheapest work. However, if all the first-generation Muslims in Germany or France receive less after a life’s work than most white, catholic or evangelic German and French people, they can hardly not feel discriminated against. Unfortunately, we see similar work patterns today in response to the migration wave to Europe from Middle East and Africa.

The resulting perceived polarisation between “them” and “us” is irreconcilable with a cohesive society. If some groups of citizens feel the social contract is not fair to them – because they are newcomers, of different origin, culture or faith – it ceases to exist. The reverse is also true: if not all citizens feel bound by the social contract to the same extent then the society falls apart.

Another way to replenish the workforce is to increase the work participation of less involved social groups. In its strategic plan Europe 2020, the Commission set the target of participation for both women and men aged 20-64 on 75 per cent of the labour market. In order to accomplish that, it is necessary to side-line the role of the woman as mother and strip the marriage and family of their special status. Nevertheless, even then this approach offers only temporary solution to the problem of the missing workforce. Because when these women get old, there will be nobody to replace them.

Full employment is hard to reconcile with family life. The catchphrase “work-life balance” simply means that working parents should employ strangers to raise their own child from an early age. I say “child”, not “children”, because full time work is the main reason why so many couples today freely decide to pursue a “one-child-policy”. This weakens the bond between generations that makes the social contract possible in the first place.

Family is the primary source of solidarity between generations. It is the source of social capital, too. Low levels of the social capital translate in high social costs. It is neither automatic nor natural to make the cultural leap necessary to recognize that, when it comes to solidarity within the society, one should treat all parents, children, and sick as if they were members of their own family.

The European Union has only very limited powers when it comes to influencing  social policy. Its role as defined by the Treaties is to support and complement the activities of the Member States. In November 2017, the European Parliament, the Council and the European Commission proclaimed the European Pillar of Social Rights. However, a complementary statement outlining “Social Responsibilities” is still missing.

Unless we re-examine the basic principles and values that enabled the construction of the welfare state only the wealthy will be able to consume the fruit of longevity promised by science. Neither “work-life balance” nor a “pillar of social rights” offer a solution for plummeting fertility rates or fading solidarity between young and old. They never will because policies must reflect values, not try to substitute them.

Solidarity is born within the bonds of natural family; expands beyond its limits to include all members of the society. It enables the accumulation of social capital that makes it possible to trust others. This trust, in return, makes the social contract possible, as trust is a pre-condition of insurance.

A longer life expectancy, solidarity between generations, work-life balance and a necessity to renew the social contract between young and old – these are the biggest challenges of our time. I look forward to discuss them in the panel debate “Forever young: Survive me if you can” during the European Youth Event (#EYE2018) taking place in Strasbourg on June 1 and 2

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