Pri­vate sec­tor shoul­ders bur­den

Low birth rates, ris­ing life ex­pectancy set to place so­cial se­cu­rity un­der in­creas­ing pres­sure, SEV re­port says

Kathimerini English - - Front Page -

The union of Greek in­dus­tri­al­ists (SEV) has painted a dire pic­ture of the state of the Greek pen­sion sys­tem, say­ing ba­si­cally that it is run­ning on empty, and that the coun­try’s be­lea­guered pri­vate sec­tor has taken on a dis­pro­por­tion­ate share of the bur­den to sup­port pen­sion­ers and the pub­lic sec­tor. Given Greece’s low birth rates and ris­ing life ex­pectancy, the pen­sion sys­tem is set to come un­der im­mense pres­sure in the com­ing decades.

In its weekly re­port pub­lished yes­ter­day, SEV said that each pri­vate sec­tor worker sup­ports 2.8 peo­ple who are ei­ther un­em­ployed or work in the pub­lic sec­tor.

More­over, just 43 per­cent of women and 14 per­cent of peo­ple aged be­tween 15 and 24 have work, com­pared to re­spec­tive av­er­age fig­ures of 61 and 33 per­cent for the Euro­pean Union’s 28 mem­ber-states.

“Re­tired peo­ple are fac­ing the fu­ture with in­creas­ing in­se­cu­rity as their pen­sions are be­ing re­duced,” the SEV re­port said, adding that out of a pop­u­la­tion of 10.8 mil­lion, a stag­ger­ing 806,000 peo­ple work in the pub­lic sec­tor.

The re­port put the num­ber of peo­ple who work in the pri­vate sec­tor at 1.6 mil­lion, while self-em­ployed pro­fes­sion­als, farm­ers and oth­ers amount to 1.3 mil­lion.

Peo­ple re­ceiv­ing re­tire­ment, dis­abil­ity and other pen­sions amount to 2.6 mil­lion (plus 150,000 out­stand­ing pen­sion ap­pli­ca­tions).

As things stand now in Greece, the num­ber of peo­ple aged be­low 15 and over 64 (i.e. those who don’t work, in­clud­ing moth­ers, chil­dren, se­niors, the un­em­ployed) will al­most dou­ble by 2050.

To make matters worse, Greece’s pop­u­la­tion is de­clin­ing and get­ting older.

By 2050, the pop­u­la­tion will have dropped to 9 mil­lion, with one in three peo­ple (34 per­cent) aged 65 and above, com­pared to 22 per­cent in 2020. More­over, by 2050, there will be one worker for each pen­sioner. A lack of pen­sion re­serves will force work­ers not just to sup­port them­selves and their fam­i­lies, but to pay taxes to prop up se­nior cit­i­zens.

Ac­cord­ing to SEV, in or­der to re­verse th­ese trends, there must be a higher par­tic­i­pa­tion of women and young peo­ple in the work­force and a well thought out im­mi­gra­tion pol­icy, as well as sup­port for ac­tive ag­ing – the idea of longer ac­tiv­ity, with a higher re­tire­ment age and work­ing prac­tices adapted to the age of the em­ployee.

But this pre­sup­poses a healthy en­vi­ron­ment of eco­nomic growth, which, through pri­vate in­vest­ment, will cre­ate jobs. Tech­no­log­i­cal ad­vances and their im­pact must also be fac­tored into the equa­tion as they are ex­pected to cre­ate many dis­con­ti­nu­ities and new re­quire­ments in the la­bor mar­ket.The re­port rec­om­mended a strat­egy that will in­clude tack­ling the coun­try’s brain drain, raise birth rates and pro­mote ac­tive ag­ing in or­der to put the brakes on the un­fold­ing pen­sion cri­sis.

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