Despite widely varying national retirement systems, people in five major European countries and the United States share the view that the systems are broken and that they will have to work 5 to 10 years longer than they would like, a poll conducted by Harris Interactive for the International Herald Tribune and France 24 shows.
This very dissatisfaction could contain the seeds of change, according to experts like André Sapir, an economist at Bruegel, a policy research institute in Brussels, who argues that governments should encourage people to retire later. He noted that the poll showed a narrow range of desired retirement ages, with a low of 57.7 years for Britons and a high of 59.7 years for Americans.
"The problem is that people have adjusted their expectations for an earlier retirement age," Sapir said. "The good news is that they realize that realistically they will have to retire later."
That analysis was shared by Ángel Gurría, head of the Organization for Economic Cooperation and Development in Paris.
"The No. 1 problem is not retirement," Gurría said in a television interview being shown Friday on "The Talk of Paris" program on France 24. "The No. 1 problem, with a population which is aging, and with a population which in many countries of the OECD is falling in absolute terms, is how to have more of the population working.
"That is the only way in which some of our countries can continue to have growth."
When people from the six nations were asked when they thought they would actually retire, the earliest were the French, at 64.2 years old, and the oldest the Americans, at 67.2.
"This is good news for politicians who want to move the effective age of retirement to age 65 or beyond," Sapir said. "They don't need to fear being bold in making the necessary reforms."
Mark Haas, a political scientist at Duquesne University in Pittsburgh who has studied the relationship between aging populations and national security across eight countries, agreed with Sapir that the potential existed for politicians to tackle the question but said there was not yet a "sea change" among the public toward a "more realistic" retirement age, one made necessary as the leading edge of the Baby Boom generation has passed 60.
"Continental Europeans are still retiring at a much earlier age, around 60," Haas said, while noting that for Americans the age is closer to 64. Any major changes, he added, "would need bold and firm leadership - maybe the public would go along with that."
Haas noted that in most of the West European countries surveyed, only 20 percent to 30 percent of respondents thought they should be primarily responsible for their own retirement income, through savings, personal retirement accounts or the like. The figure fell to 6 percent for Spaniards, but among Americans, the figure was 48 percent.
"Many more Europeans think the government should spend more on pensions," Haas said. "The more that governments feel compelled to spend on social security for the elderly, the less they'll have for economic development and the military." This, Haas argues, will make the United States even more likely to exert a unilateralist "power dominance" in world affairs.
Across the board, people in Spain, France, Britain, France, Germany and the United States rejected the notion of a mandatory retirement age. The poll was conducted in January, a few weeks after the highest EU court, the European Court of Justice, ruled that countries could enforce retirement at age 65.
The "old thinking" in Europe starting about 20 years ago and continuing until recently, Sapir said, was that older workers should "get out of the way" of younger workers by retiring, thus loosening the job market. But in fact, "if you retire early, you're actually increasing costs for those who are still working," Sapir said.
"After World War II, people in Europe were used to very low levels of unemployment, even lower than the United States, until the late '70s or early '80s," he said. "As unemployment rose, there was the idea that there's a fixed amount of work to go around and it needs to be shared between the generations. But clearly, there's no relationship between age of retirement and unemployment."
The poll showed that people remain worried about maintaining their lifestyle after they stop working. Vast numbers of people say they will need more than 60 percent of their final salary after retirement. More than 9 people in 10 thought so in France, Germany, Italy and Spain, the poll found, and 7 in 10 thought so in the United States.
"This shows that people are not very realistic," Sapir said. "Except for some in the public sector, people are not getting those kinds of pensions unless they are getting complementary private pensions. They're not getting these kinds of pensions, and they don't need them."
See report and graphic in IHT
Copyright © 2008 the International Herald Tribune
