Opinion
Debate: Retirement age
(China Daily)
Updated: 2010-10-18 16:40
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Sun Qunyi
Workers should work longer but ...
The Ministry of Human Resources and Social Security may have ruled out the possibility of increasing the retirement age for the time being, but it will have to change its decision eventually.
China's aging population is a big challenge. Every society has to deal with it sooner or later. The trend across the world is for a longer life - thanks to the advances made in science - and lower birth rates. This has given (or will give) countries an "inverted pyramid" structure: A society with more elders and fewer youth.
China is different from other aging societies, among which the most prominent are advanced countries whose aging population runs parallel to their economic development. But unlike the developed countries, people in China age before being well-off, because of the huge population and the family planning policy.
In the initial years of China's reform and opening-up, many scholars and demography experts said that after 20 to 30 years, the country's family structure will become "4-2-1", that is, a couple with one child would support four older people. That prediction has come true, today the so-called "post-1980s generation" has become the main force of the labor market. Who are the members of the post-1980s generation? Most of them are the only child of their parents.
The conflict of social input and output, especially at the labor level is obvious. In China there are more dependent aged people and fewer young providers. This has increased the burden on families as well as society to support the aged.
In the 1980s, China's main concern was its huge population, which it had to tackle first. But today, the aging of its population has become a pressing issue. So, we need an answer to the question: "How best to support the aged?"
The pressure on China is greater because its problems are magnified. Governments propose to increase the retirement age mainly because of economic factors, and the Chinese government is no exception. Pension payment poses a great challenge to China. When the Chinese government started the pension reform, one generation of retired people hadn't paid the premium for their pension. The "empty account" created in the country's pension system then, is still to be filled.
Paying pensions to the workers of enterprises poses yet another big challenge. The amount of a person's pension generally depends on the premium he/she pays before retirement. But considering the rising standards of living, the pensions of enterprises' workers is comparatively low. To meet the shortfall between the actual pension of a person and the money he/she requires for a decent living after retirement, the government has to increase their pension for five continuous years.
All these have created difficulties in pension payment, a case which is "unique" to China. One way of overcoming these difficulties is to increase workers' retirement age so that they continue contributing to the country's pension fund for a longer period.
There are other reasons why the government should increase the retirement age. The higher social living and healthcare standards have made people healthy enough to work longer. A 50-year-old man used to be regarded as aged in ancient China. But today, he would be considered a middle-aged man. The retirement age should be extended in accordance with the average longevity of the people.
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The number of years that the new generation has to spend acquiring higher education is remarkably longer than before, partly because of the tough employment pressure in the country. This shows that the "valid career life" of Chinese people is comparatively shorter than that of people in other countries.
Despite all this, the authorities should consider each and every aspect before increasing the retirement age. It is likely to create a great psychological impact and tension on society, especially among youngsters, because they will be denied jobs for longer periods in the new set-up.
If the government decides to increase the retirement age at all, it should introduce the measure gradually and after learning from the experiences of other countries. For example, it could introduce a flexible retirement system. It could also introduce a system whereby the pension of people who retire early is different from that of people who retire late to guarantee social fairness.
The author is a research scholar with the Institute of Labor and Wage System, affiliated to the Ministry of Human Resource and Social Security. This is an excerpt of his interview with China Daily's Wang Yiqing.