One of the negative effects of the financial and economic crisis that hit western economies in the last four years is that political leaders have lost their focus on resolving the challenges that faces our aging societies. It is inevitable that demographic aging will lead to economic decline unless measures are taken to change the way we deal with this phenomenon.
Increasing employment levels may sound like a good strategy except that its implementation faces formidable challenges- John Cassar White
Different countries are tackling the effect of their aging societies in different ways but broadly there are two ways of tackling this issue. The most prevalent method is at times defined by sociologists as the “productive ageing paradigm”. The EU sponsored report ‘Overcoming the Barriers and Seizing the Opportunities for Active Aging Policies in Europe’ describes productive aging as follows:
“Welfare systems are thought to be under strain – both financially and in terms of management. Demographic aging increases the strain. The solution to this problem is to initiate a policy reform that brings about longer working lives. In parallel, the benefits supplied by the welfare systems should be limited and individual contributions should be increased.”
This is exactly what countries like Italy, Greece, Spain and even the UK are doing. We all know where this is leading to: social unrest and an ever increasing disillusionment with politics. In a context where many economists believe that western economies are facing a structural downturn that leaves little hope for strong economic growth, there is little chance that social services and pensions systems can deliver effective support that passes the test of both sustainability and adequacy for an aging population.
The growing number of unemployed young people as well as middle aged workers who lose their jobs as a result of the restructuring of the businesses they were employed with shows that promoting healthy economic growth is easier said than done. So, increasing employment levels may sound like a good strategy except that its implementation faces formidable challenges.
While the educational attainment levels of the workforce are generally improving throughout Europe, whole generations of workers do not have the qualifications that the contemporary labour market demands. Lifelong learning is still not incorporated sufficiently in the management strategies of most businesses, and yet it is the single most important element that will help to fight age discrimination and promoting inter-generational relations in the workplace.
Besides the well publicised increase in pension contributions and the extension of the retirement age, some countries have taken other measure with varying degrees of success. One of the more controversial and less successful measures has been the liberalisation of labour markets to encourage employers to hire more workers because of the easing of employment obligations. But making “hiring and firing” easier has not generally led to higher employment levels.
In Spain, for instance, new laws give less protection to new employees joining the labour market while it keeps the same protection for older workers. With one in three young Spaniards unemployed, one can argue that this attempt at “flexibilisation” has not achieved much. Mitigating this measure with new legislation to curb age discrimination in the labour market has not really helped.
Where “flexibilisation” was introduced, employers used these measures to rationalise resources rather than create new jobs. Moreover, the integration of age concerns in human resources management strategies was generally ignored as only few employers adopted this as best-practice in their HR strategy.
The limited success of these reforms can be attributed to the fact that age discrimination legislation is difficult to enforce. In most countries the persistently high level of unemployment of workers in the 55 – 64 age brackets is clear proof that age discrimination in the labour market remains endemic. With youth unemployment and school drop-out rates remaining persistently high in many countries, the limited funds available for training and retraining were increasingly directed to measures aimed at younger people.
While most countries profess that senior citizenship is at the heart of their socio-economic policies, few have in fact made any significant progress in promoting “active aging” with the change in mentality that it brings in our social planning. The European Commission made clear recommendation on how to promote active aging in its report ‘Towards a Europe of All Ages’. The reality today is that the productivity paradigm which is directed toward rationalisation and budgetary discipline still prevails in most EU member states. In the next article I will discuss some measures that could ensure that the challenges facing our aging society are addressed more effectively.
jcassarwhite@yahoo.com