LABOUR RELATIONS
What the French protests tell us about the future of labour
by Mark Smith: Director of the Stellenbosch Business School
The Beatles’ song “When I’m Sixty Four” famously speaks of the uncertainly of aging with Paul McCartney wondering if he will still be loved when he is old and grey but also detailing the aspects of life that he may look forward to.
The song speaks to the so-called social contract whereby society has explicitly or implicitly promised a certain quality of life in older age in exchange for contributions to the system while working. It is this very social contract that helps explain why the French are out on the streets.
For South Africans, it may be surprising that French workers expect to retire at just 62 (although many do not) and feel aggrieved by having to work until 64. In fact, the South African retirement age of 60 compares rather favourably with the French but unfortunately, the average of just two years to live in retirement compares badly to the 15 years of life for the average retired French person.
The recent protests in France show the power of this social contract between a population and its government. These commitments and expectations, set in previous generations, are long-lasting and shape norms for subsequent generations. It also shows the great diversity that exists across the world in the way we approach the organisation of society and working lives (the retirement age is already 67 in many Nordic countries).
In addition, there is also a widespread view in France that work is not life. Even the word for work in French, “travail”, captures the pain and difficulty of having to work. Contrast that with the Anglo-Saxon or Nordic approach where work is regarded as a source of enrichment and a sign of a productive life. This perspective is somewhat paradoxical given the high-quality working environment in many French firms. They have resisted so-called “savage capitalism” and have pioneered the 35-hour week – evidence of the l’éxception Française (the French exception).
Regardless of expectations and the social contract, part of the challenge for retirement is that the numbers do not seem to add up. The dependency rate captures the proportion of the population outside the working age (too young or too old) compared to the working age. If there are too few people working and too many dependents something needs to change – more contributions from workers, more business taxes, long working lives, or poorer pensioners.
The debate seems like a first-world problem, or as the French would say a “probleme des riches”. Here in South Africa and many developing or emerging economies the population statistics look quite different, life expectancy is short for many, and the large shares do not have the resources to retire in security. However, the trend of falling birth rates combined with longer lives, and therefore rising future dependency ratios, is also occurring everywhere albeit at a slower rate for middle and lower-income economies than in richer economies.
As a solution, working for longer may not be such a bad thing. Demographers are increasingly interested in health-adjusted life expectancy that captures the number of healthy years we live rather than the total number. After all, what is the point of living a long time if we are too sick to enjoy that time?
Good quality work can stimulate mental and physical health. Around the world, there are signs of people un-retiring both because they must due to inadequate retirement funds and because they enjoy the social interactions of employment or the actual work itself. This is evident in volunteering too.
The world is getting older. There will be eight times as many hundred-year-olds in the world by 2050 than in 2015 and that number will continue to rise. This type of longevity may seem a long way off for some South Africans but the future will bring increasing life expectancy for those previously disadvantaged groups of the population.
If we are to work longer in all parts of the world we need to think about quality as well as quantity of work. To make work better, so that it is less of a “travail” for both younger and older, it is important to think of new flexibilities, shorter hours, and the use of technology to support longer working lives.
By 2050 over half of all populations in OECD countries will be over 65. Emerging and developing economies are expected to follow at some point later. There are no easy solutions. For some immigration is part of the solution. Since most of us did not have the success of Paul McCartney and the Beatles, working a bit longer will be inevitable. With better working conditions working longer may also be part of the solution for aging societies and part of having longer healthier lives with purpose.