EU: Ageing and work [TheMatureMarket.com]

According to the Commission’s European Employment Observatory (spring 2003), the 16-29 years age group will decline by 13 million people between 1995 and 2015 in the 15 Member States of the European Union (estimated for the EU before the enlargement to 25 Member States on 1 May 2004). At the same time, the number of 50-64 year olds will increase by 16 million.

This is a vital issue for the future. The EU has set the objective of raising the employment rate of older people. In March 2001, the European Council of Stockholm aimed at a rate of 50% employment for workers aged 55 to 64 by 2010. (It also sets the objective of reaching an employment rate in the EU of 70% for the whole population of working age, and of 60% for women.) The Barcelona European Council in March 2002 agreed on the target of gradually increasing the average retirement age by five years over the same period.

National social models

Using the classifications drawn up by Delteil and Redor (2003), three types of country can be identified, taking into account male employment rates of older workers and developments since 1995. Male employment rates are used in their study as, historically, the career paths of men have been more linear, while those for women tend to be more broken and varied.

In Sweden and Denmark, traditionally, there has been a high employment rate among older people.

Finland, the Netherlands and Spain had far lower employment rates among this age group but improvements in this situation mean that they can now look towards the Stockholm objective. Germany and France have made little progress over the past seven years. Reforms came late and were not well accepted. The labour market was not favourable for anyone, and even less for older workers.

Countries with a large number of older workers

Two countries - Sweden and Denmark - have a high rate of older employees. They already largely exceed the Stockholm objective. It is useful to understand their social context and the measures taken concerning employment and retirement.

Sweden: the old protection system and new reforms

The official retirement age in Sweden is 65 years. As the graphs below indicate, the percentage of people aged between 50 and 64 who are working has remained in excess of 70% since 1976. The economic depression from 1991 to 1994 clearly shows its effect on this age group as on other workers. However, the poor economic situation of the period 2002-2003 did not have a large impact on the employment of older workers, due to the particular sectors affected. The IT and communications sectors who suffered most from that recession, employ many young people.

Early retirement agreements for certain professional categories (transport, mining, defence, etc) have been abolished in Sweden. Such agreements became more common in other sectors too during the recession in the early 1990s, when there was less work available. All of these incentives have now been removed though it is possible to reach specific retirement agreements on an individual basis. Early retirement for health reasons is common. Life expectancy in Sweden is one of the highest in the world.

The rate of over 65 year olds is estimated to increase from 17% of the overall population to 25% in 2030. In the same period, women’s life expectancy will rise from 82.1 to 85.2 years, and men’s from 77.1 to 81 years. Furthermore, the birth rate was extremely high in the 1940s, which will mean a surge in the numbers retiring in the coming decade. The pension system was recently modified in an effort to avoid excessive strain on public finances. Revolutionising the traditional collective bargaining system, the Swedish state adopted an act in 2001, aimed at establishing a link between contributions paid throughout a lifetime and the level of pension payments. Each person can work beyond the official retirement age of 65 to increase his or her pension.

In 2003, the government published Policies on ageing for the future . 100 steps to safety and development with an ageing population. These guidelines focus on disparities between men and women, between the different socio-economic categories, and between immigrants and people born in Sweden. The stated objective is to achieve 75% of active involvement of 50-64 years olds in the labour market by 2010, compared with 73% in 2001. The rate was as high as 77% in the early 1990s. The guidelines note differences in the nature of work and the need for higher qualifications. They also point to the intensification of work and mobility between different employers. Good quality of work, personal development and pay conditions throughout a career are the main conditions that encourage older workers to want to continue to work, and that enable them to do so. Towards the end of professional life, it is necessary to adapt functions to people’s capacities, develop skills and propose flexible working hours.

Case example from Sweden: Older workers at Volvo-Torslandaverken

Staffing was reduced by 60%. At the same time, car production rates increased. In an effort to manage the staff shortage, two departments for older workers were set up in 1994. 60 persons who are older than 50 years or have medical difficulties are employed here. 90% of these have strain injuries. They do not work in cleaning, painting or other heavy tasks. Instead they perform service tasks or preparatory work for the assembly line.

At the outset, Volvo’s management counted on the older workers handling 75% of commissioned production demands. Today they handle 90%. To recruit a new, younger worker costs around 100,000 SEK. Early retirement for older workers is also costly. Thus, retaining these workers within the senior departments represents considerable cost savings. There is no direct competition with the younger assembly workers who have greater physical strength.

The older, experienced workers can conserve their energies in dealing with more specialised tasks. In the beginning, the younger workers on the assembly line tried to find fault with the work of the older workers.

However, this strategy was soon abandoned. The more experienced workers clearly knew how to build a car properly. And the younger workers could learn from them. A greater integration of ages in the work teams creates a sense of belonging, safety and well-being. The harmonious work situation strengthens workers’ self-esteem and reduces sick leave.

Short breaks and varied work schedules are also beneficial, allowing the older workers rest periods. The older workers do not have as high a pace of work as the younger workers but their work is cost effective. The oldest senior worker was offered early retirement on reaching 59 years, but chose to remain at work. The management can be pleased with the success of their initiative.

Source: European Foundation for the Improvement of Living and Working Conditions