Labour Ministry defends raising retirement to 67

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17 Nov, 2010 Updated Wed 17 Nov 2010 15:19 CEST
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Labour Minister Ursula von der Leyen on Wednesday defended the controversial decision to increase Germany's retirement age from 65 to 67 staring in 2012, saying the country had no alternative as society continued to age rapidly.

Presenting a report on pensions to her cabinet colleagues, von der Leyen dismissed criticism from the opposition, trade unions and social organisations and said delaying retirement was “necessary and justifiable.”

Without it the country would be forced to cut pensions or drastically increase employee contributions, both of which would be unfair, she said. The minister also pointed to the fact that more Germans were living longer, healthier lives.

The new retirement age will begin for those who were born in 1964, or people who are currently 46-years-old.

Only about half of Germans older than 55 still work, but von der Leyen said that was also changing.

“There are not yet very many, but there will be more,” the conservative Christian Democrat said, referring to labour market statistics showing the number of workers between 55 and 65 jumping by more than one million between 2005 and 2009.

But social policy advocacy association VdK argued that increasing the retirement age was unrealistic.

“Anyone unemployed beyond 50 has hardly a chance at finding a new job,” VdK leader Ulrike Mascher told news agency DAPD. “Ageism still rules in human resources for most sectors.”

Labour market researchers said on Wednesday that they expect job prospects for older applicants to improve significantly in the coming year, though.

Workers older than 60 are likely to be employed long-term at a rate of up to 50 percent, according to Institute for Employment Research (IAB) expert Martin Dietz in an interview with daily Financial Times Deutschland.

Researchers from the Cologne Institute for Economic Research (IW) also told the paper they expect “massive employment development” that will eventually approach the average employment rates of other age groups.

Reasons behind the improvements for workers of a certain age lie in the demographic constraints that will shrink the number of young people entering the job market, in addition to a change in policy against early retirement.

“The significant increase in work since 2005 shows that the difficulties of older workers in the job market has less to do with biological reasons and much more with wrongheaded institutional policies,” said Hilmar Schneider, director of labour market policy research at the Institute for the Study of Labour (IZA).

Until 2005 the state helped companies “buy out job protection from older workers,” he said.




2010/11/17 15:19

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