The French may not like it, but retirement ages have to increase across the developed world. As we live longer, our social security systems simply cannot be sustained when people draw a pension for 20 years or more. But at the same time, older people face a massive challenge finding a job in the private sector above the age of 55 or so because few companies want to hire them. And with the rise of automatization and AI this challenge seems to become only bigger.
I can't help but look at this situation through a different lens. If AI and automation are relentlessly replacing jobs and doing our work for us, then why are we not working less rather than more?
I know this is hardly a novel concept, and for time immemorial it has just not worked like that. However we're now told we're in demographic crisis too, with fertility rates in almost all developed countries plummeting. Less mouths to feed, whilst tech. continually removes things we need
We seem to be a long way from it, but I think UBI keeps knocking on the door as the possible solution. I'm not pretending it's a panacea or easy answer though.
I'm not entirely convinced though that it's the finances that are the problem. I think we as humans are generally driven for more more more, so new industries will always pop up to replace the old.
Re: ageism, personal anecdotal experience. Before I did the FIRE thing, I worked in a large blue chip IT services firm as a project manager. Of the older generation I worked with, there were pretty much two camps:
1) A small group of wise heads, who almost all were there because they actually enjoyed the work and took value from being an expert in their field. They had a high degree of autonomy and were totally invaluable to the team.
2) A larger pool of 'work to live' people, who were pretty much just counting down the clock until retirement, sometimes literally with a retirement countdown screensaver. They hadn't kept up their skills, their drive and thoughts were clearly elsewhere and they were usually far less effective than their junior counterparts and often overpaid too. If they were at work for anything other than money, it was for a gossip and cups of tea.
I'm sure people in group 1 had no problem being hired because their network was strong and their talent undoubted. But if it was a choice between an unknown 60 year old who theoretically meets the requirements and a 25 year old with a similar CV and keen attitude? I can kind of understand why those choices are made.
There is another factor to take into account now. It's the fact that the ever-shrinking younger generation wants to work less and values the work-life balance much more than the current working cohort (if you allow me to generalize here). This means that going forward (and we can already start to feel it now) it will be actually harder for employers to fill job vacancies. This leaves us/them with only two solutions : robotization/AI wherever possible, and/or keep older employees in their job for longer.
Just for clarification, the generation coming to work (Gen Z) is more numerous that my generation (Gen X) or the Millennials, but less numerous than the Baby Boomers. But I agree there is a shift in preferences towards work or where the right work-lire balance is. It’s as if the younger generation is becoming a bit more French than past generations :-)
The retirement system in Italy is based on two criteria: seniority and old age. To retire by seniority, one needs 41 years of contributions; to retire by old age, one needs to be 67 years old. I am 45 years old now and I will only meet the old age criterion when I am 71. The job market is becoming more and more competitive. The well-off white-collar workers of the past are now unemployable at any age, while the blue collars are the same as always, same status and above all same salary. So I ask myself: who will sustain the cash flows of our economic and welfare system? The luxury market that the German car makers are targeting? Henry Ford would be rolling in his grave.
Thanks for the details. That is very interesting. And it speaks to my point that we need to encourage businesses to hire older white collar enployees. I wish I knew how to do that…
Retirement Age: The ideal is flexibility. A heavy manual worker may need to retire at age 60yo. At present the incentive is for her to ‘go on the Sick’. Conversely a 70 yo brain worker has valuable experience; and my be content to work on at lower pay. Pension schemes could offer ‘£x if you retire at 60 yo, £y at 65yo, etc. For all there must be compulsion / encouragement to save more at a younger age. The UK regulatory insistence on holding Fixed Income should be changed.
AI: I suspect we shall see this as a nonentity in 2026 and transformative in 2033.
I can't help but look at this situation through a different lens. If AI and automation are relentlessly replacing jobs and doing our work for us, then why are we not working less rather than more?
I know this is hardly a novel concept, and for time immemorial it has just not worked like that. However we're now told we're in demographic crisis too, with fertility rates in almost all developed countries plummeting. Less mouths to feed, whilst tech. continually removes things we need
We seem to be a long way from it, but I think UBI keeps knocking on the door as the possible solution. I'm not pretending it's a panacea or easy answer though.
I'm not entirely convinced though that it's the finances that are the problem. I think we as humans are generally driven for more more more, so new industries will always pop up to replace the old.
Re: ageism, personal anecdotal experience. Before I did the FIRE thing, I worked in a large blue chip IT services firm as a project manager. Of the older generation I worked with, there were pretty much two camps:
1) A small group of wise heads, who almost all were there because they actually enjoyed the work and took value from being an expert in their field. They had a high degree of autonomy and were totally invaluable to the team.
2) A larger pool of 'work to live' people, who were pretty much just counting down the clock until retirement, sometimes literally with a retirement countdown screensaver. They hadn't kept up their skills, their drive and thoughts were clearly elsewhere and they were usually far less effective than their junior counterparts and often overpaid too. If they were at work for anything other than money, it was for a gossip and cups of tea.
I'm sure people in group 1 had no problem being hired because their network was strong and their talent undoubted. But if it was a choice between an unknown 60 year old who theoretically meets the requirements and a 25 year old with a similar CV and keen attitude? I can kind of understand why those choices are made.
There is another factor to take into account now. It's the fact that the ever-shrinking younger generation wants to work less and values the work-life balance much more than the current working cohort (if you allow me to generalize here). This means that going forward (and we can already start to feel it now) it will be actually harder for employers to fill job vacancies. This leaves us/them with only two solutions : robotization/AI wherever possible, and/or keep older employees in their job for longer.
Just for clarification, the generation coming to work (Gen Z) is more numerous that my generation (Gen X) or the Millennials, but less numerous than the Baby Boomers. But I agree there is a shift in preferences towards work or where the right work-lire balance is. It’s as if the younger generation is becoming a bit more French than past generations :-)
Re hard manual work vs light manual work vs white collar work:
Interesting topic.
My suggested alt to the big govt big data approach:
Set the min employer contributions at higher levels for two to four broad categories of work, eg
hard manual work: 20%
Other manual work: 10%
White collar work: 5%
With a few rules to prevent unscrupulous employers reclassifying jobs to game the system.
This caters for a few messy cases too eg career changes.
I very much like that approach
The retirement system in Italy is based on two criteria: seniority and old age. To retire by seniority, one needs 41 years of contributions; to retire by old age, one needs to be 67 years old. I am 45 years old now and I will only meet the old age criterion when I am 71. The job market is becoming more and more competitive. The well-off white-collar workers of the past are now unemployable at any age, while the blue collars are the same as always, same status and above all same salary. So I ask myself: who will sustain the cash flows of our economic and welfare system? The luxury market that the German car makers are targeting? Henry Ford would be rolling in his grave.
Thanks for the details. That is very interesting. And it speaks to my point that we need to encourage businesses to hire older white collar enployees. I wish I knew how to do that…
Retirement Age: The ideal is flexibility. A heavy manual worker may need to retire at age 60yo. At present the incentive is for her to ‘go on the Sick’. Conversely a 70 yo brain worker has valuable experience; and my be content to work on at lower pay. Pension schemes could offer ‘£x if you retire at 60 yo, £y at 65yo, etc. For all there must be compulsion / encouragement to save more at a younger age. The UK regulatory insistence on holding Fixed Income should be changed.
AI: I suspect we shall see this as a nonentity in 2026 and transformative in 2033.