Our society is undergoing a paradigm shift as our population ages rapidly, highlighting the need to rethink, reform and even rebuilt our pension systems, educational institutions, welfare systems and other aspects of our society. This is on the backdrop of the COVID-19 pandemic and its subsequent lockdowns, which has demonstrated the precarity of our society and the ease by which people can fall between the gaps of the social safety net. However, this shift provides us more opportunities than risks, but the question remains, whether we will – and can – take advantage of them. To this end, we must ask the following questions:
- How can our educational systems be adapted so that people remain fit for the labour market during their entire life course?
- What are the socio-political consequences of life course events, such as long periods of unemployment?
- How can we better support people in the transition to retirement and design minimum wage schemes to ensure the social participation of vulnerable population groups in old age?
In collaboration with the Council of the Baltic Sea States, Population Europe hosted the third instalment of the ‘Beyond COVID-19: Population Challenges Ahead’ series on Friday, 11 June 2021 to discuss our ageing society and its policy implications. The conversation was moderated by Andreas Edel (Population Europe / Max Planck Institute for Demographic Research) and featured two prominent speakers: Dr Rolf Schmachtenberg (Permanent State Secretary at the German Federal Ministry of Labour and Social Affairs) and Prof. Dr Agnieszka Chłoń-Domińczak (Director of the Institute of Statistics and Demography at the Warsaw School of Economics). Additionally, the conversation was joined by leading experts in the demography community: Dr Hervé Boulhol (Senior Economist, Pensions and Population Ageing, Organisation for Economic Cooperation and Development (OECD), Directorate for Employment, Labour and Social Affairs, Paris, France), Dr Marc Bovenschulte (Member of the Board of the Institute for Innovation and Technology and Head of the department Demography, Clusters and Foresight, VDI/VDE Innovation + Technik GmbH, Berlin, Germany), Professor Jane C. Falkingham OBE (Professor of Demography and International Social Policy, Director of the ESRC Centre for Population Change, University of Southampton), Professor Dr Alexia Fürnkranz‐Prskawetz (Professor of Mathematical Economics at the TU Wien, Deputy Director of the Vienna Institute of Demography, Member of the Austrian Academy of Sciences and the German National Academy of Sciences Leopoldina, Vienna, Austria), Professor Dr Tatiana Razumova (Professor for Labour and Personnel Economics, Moscow State Lomonosov University, Moscow, Russian Federation) and Lea Vatanen (Senior Expert, European Commission, Secretariat-General, Cohesion, Economic & Social Affairs).
Creating lifelong learning structures
If we expect people to work for 50 or more years, we must provide them with the skills and competencies necessary to stay active and relevant in the workforce. This was the key takeaway from many of the speakers, who emphasised the need to create systems of lifelong learning from a life course perspective. To do so, however, our systems must become flexible and open for change. As State Secretary Schmachtenberg highlights, this is particularly a problem within Germany because our prior structures create ‘a trap’ in the German system: ‘We are very much profession-oriented, where career changes are difficult, especially late in life’. To escape this trap, Prof Dr. Chłoń-Domińczak calls for a reshaping of education systems that not only focus on knowledge, but also on outcomes and skills. The particular skills and competencies that should be emphasised include working in groups, defining learning goals throughout life and creating a desire and recognition of the need for lifelong learning. One aspect in which lifelong learning is of particular importance is financial literacy, which was brought into the discussion by Professor Jane C. Falkingham: ‘We must provide people with the tools to not only make smarter financial decisions but to also make systems such as unemployment and pensions easier to navigate’.
Germany has already taken important steps towards lifelong learning structures through the introduction of the National Skill Strategy in 2019 with the goal ‘to increase the commitment to continue education training and establish a new culture’ according to State Secretary Schmachtenberg. But more importantly, we must find intelligent solutions to combine work and training across the entire life course to be able to establish sustainable lifelong learning systems.
Supporting Vulnerable Communities
What can we do to better support vulnerable populations such as people with mental and physical disabilities, with gaps in employment and who face discrimination based on various social identities? A reoccurring topic within this discussion throughout Germany and the EU is the implementation of minimum income schemes. State Secretary Schmachtenberg is cautious of the believed condition-less identity of the schemes and how they are often tied to nationality or other in-group mechanisms. In his words, to be effective, ‘minimum income has to be adequate, has to reach everybody who needs it and has to be inclusive’.
Additionally, any minimum wage or income system must be integrated into the social welfare states including education and healthcare. To this end, Prof Dr. Chłoń-Domińczak urges stronger cooperation between researchers and policymakers, especially in the aftermath of the pandemic as it highlighted inadequacies in the welfare system as shown by high rates of job and income loss faced by all generations – and even more harshly felt by people over 50. According to her, we should instead be focusing on establishing a welfare system ‘focused on providing means and tools so that we reduce the risk of vulnerability, social exclusion and the lower income’.
All speakers recognized the intertwined nature of vulnerabilities, particularly between unemployment and health. As such, to re-integrate people who have been outside of the workforce for an extended period skill training might not be sufficient, where both physical and mental health resources are necessary conditions for their return. State Secretary Schmachtenberg acknowledges the work that Germany has done in terms of providing rehabilitative support to empower and give strength to people with the desire to re-enter. This has become increasingly salient through higher rates of pension applications based on psychological disorders such as addiction. On this topic, Dr Marc Bovenschulte stressed the importance of accessibility and the perpetuation of inequalities if those who need training the most, cannot obtain it.
An additional segment of society that often faces broken working histories are mothers, who due to maternity leave or personal desires withdraw from the workforce and often face major obstacles when attempting to re-enter. Prof Dr. Chłoń-Domińczak emphasises the importance of supporting women who want and can remain active in the workforce. Professor Dr Tatiana Razumova adds to the discussion regarding retraining programmes in Russia, where women often prefer to have two or three children before attempting to re-enter, making the need for significant skills training more important. Additionally, Professor Dr Alexia Fürnkranz‐Prskawetz highlights the systemic issues that women face and the scale of vulnerability it creates. She states that society has fallen short because it has ‘brought females into the labour market but [it has] not offered enough possibilities to take care of all they have done before’.
Transitioning into Retirement
Among the speakers, there were two primary ways of viewing the transition into retirement. The first is the classical binary one, in which a person transitions from a full-time job to not working at all. The second, which was referred to as the ‘gradient’ structure, looks at the way that people who have retired can remain active in the workforce in a different (and less strenuous) capacity. This could include working part-time, providing mentorship support for younger generations and volunteering. Not only do these programs allow for intergenerational transfers of knowledge, but they also provide an avenue for retired people to remain socially active. As Professor Jane C. Falkingham points out, maintaining this social network later is life is made even more important due to the trend towards higher rates of childlessness and divorce in Great Britain – and across much of Northern Europe – where children and life partners traditionally where the primary source of social activity and also provided personal care services.
From a more structural perspective, State Secretary Schmachtenberg believes that a flexible system such as Germany’s that provides incentives for people to work longer or part-time post-retirement are the best to create a sustainable pension system. For example, people of retirement age can expect bonuses to their pensions if they retire later. However, as these incentive programmes add complexity to the system, Dr Hervé Boulhol stressed again the importance of financial literacy so that people can make informed decisions.
At the end of the day when thinking about our ageing society and the role it plays in generational conflict and social system, our key determining factor should always be to maximize the well-being of our society and to provide support for those most vulnerable.
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References & Further Reading
- Baltic Sea Labour Forum for Sustainable Working Life (2020). Taking a Gender Perspective on Early Retirement and Work-life Balance. Policy Brief No. 1, Stockholm: Council of the Baltic Sea States.
- Baltic Sea Labour Forum for Sustainable Working Life (2021). Age discrimination at work: measures at the organisational level to address prejudice and negative stereotypes related to older age. Policy Brief No. 3, Stockholm: Council of the Baltic Sea States.
- Baltic Sea Labour Forum for Sustainable Working Life (2021). Early retirement due to poor health and working conditions. Policy Brief No. 4, Stockholm: Council of the Baltic Sea States.
- Baltic Sea Labour Forum for Sustainable Working Life (2021). No service for old men? Public employment services for older workers in a comparison between Denmark and Poland. Council of the Baltic Sea States. Policy Brief No. 7, Stockholm: Council of the Baltic Sea States.
- Baltic Sea Parliamentary Conference (2019). Baltic Sea Parliamentary Conference. Baltic Sea Parliamentary Conference.
- Baltic Sea Parliamentary Conference (2021, May 31). Exploring Demographic Change and How to Counter its Effects. Baltic Sea Parliamentary Conference.
- Becker, P., Schütz, J. & Zimmermann, A. (eds.) (2018). Ageing Workforce, Social Cohesion and Sustainable Development. Discussion Paper No. 9, Berlin: Max Planck Society/Population Europe.
- Chłoń-Domińczak, A. (2018). A One-Size-fits-All Solution for Increasing the Employment Level of Older People? Insights from a High-Level Policy Expert Meeting. Population & Policy Compact 17, Berlin: Max Planck Society/Population Europe.
- European Commission. (2021). Green Paper on Ageing: Fostering solidarity and responsibility between generations. European Commission.
- United Nations Economic Commission for Europe (2021). Guidelines for Mainstreaming Ageing. United Nations.