Reports 2012

Creating second career labour markets – Towards more employment opportunities for older workers

20 June 2012

“Europe is at a turning point in demographic terms, so active ageing is crucially important,” said László Andor, EU commissioner for employment, social affairs and inclusion, speaking at the launch of a joint EPC-Bertelsmann Stiftung project on second-career labour markets for older workers.

“This project comes at the right time, during the European Year for Active Ageing and Solidarity Between Generations. It echoes the European Commission’s concerns over pension reform, and the need to raise retirement ages, keep down public spending, and improve employability and lifelong learning,” Andor told participants in the event, which was chaired by Aart de Geus of the Bertelsmann Stiftung.

“Europe is gaining two million extra over-60s per year as the baby-boomer generation retires, while the number of younger people in the labour market is falling. All this may hamper economic growth in the long term and eventually undermine the sustainability of our pension systems, even though there is little immediate effect now,” the commissioner warned.

“Governments and stakeholders at all levels must act to bring about real change. We must work together in new and more effective ways,” said Andor, arguing that people must lead longer working lives and play more active roles in society in later life.

“People see active ageing as nice wrapping for increasing their retirement age and depriving them of their pensions. Only one third of Europeans think retirement ages must increase by 2030, so they’re at odds with policymakers,” he said.

He called for a mix of policies that address health promotion, lifelong learning, and the need to adapt working conditions and working time to the requirements of older workers. He said it must pay to work longer, which could perhaps be achieved by introducing tax incentives.

He also called on policymakers to tackle discrimination and tailor labour-market policy to the needs of older workers.

“The major challenge is restoring confidence that this Europe is working and gives people answers,” said Ursula von der Leyen, German Federal Minister for Labour and Social Affairs.

“As a percentage of the global total, Europe’s population is declining fast. We Europeans have a strong incentive to stick together,” von der Leyen argued.

“Jobs mean work, and work means perspective. Unemployment is rising in many member states. But in Germany it’s falling. Demographic change is very strong there,” she said.

“It’s our duty to show that [reform] is possible. Remove false incentives. In Germany we used to have laws that encouraged firms to send people into early retirement and get rid of older workers,” she added.

“We increased the retirement age to 67, which wasn’t accepted by the population, but we urged firms to employ people until the age of 65 or 66, focusing on experience. It’s about changing attitudes of the population,” von der Leyen explained.

“It’s the mix that counts. You need older and younger workers. Raising the percentage of older workers can boost productivity. Younger ones may run faster, but older ones know the short cuts,” she said.

“Ageing societies account for 17% of global GDP. That’s large enough to be significant,” the minister declared.

“Let’s bust some myths. Older people won’t take places in the labour market from younger people. They’re not substitutes, they’re complements. Make sure people understand that. Keeping older people in work keeps them spending, which keeps younger people in work too,” said Sven Otto Littorin, a former Swedish Minister for Employment.

“Older people really do want to participate. We need to get across the message that we need every hand on deck if we are to maintain current standards,” Littorin said.

“There’s a direct link between demographics and the need for care, but that’s where governments are cutting. You need to invest where you can get a return on your investment,” said Anne-Sophie Parent, secretary-general of AGE Platform Europe.

“We want to ban mandatory retirement ages, because we think it should be a choice. Some people need to work. I’m in favour of transition conditions. Many older people need adequate incomes to support their parents or children facing long-term unemployment,” she argued.