MARK SMITH: Working longer can be part of solution for ageing societies

The Beatles song When I’m sixty-four speaks of the uncertainty of ageing, with Paul McCartney wondering if he will still be loved when he is old and grey but also detailing the aspects of life 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 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 (though many do not) and feel aggrieved by having to work until 64. In fact, the SA retirement age of 60 compares favourably with France’s, but unfortunately the average for SA 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 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 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. France has resisted so-called “savage capitalism” and pioneered the 35-hour week — evidence of the l’éxception Française (the French exception).  

Dependency rate

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 dependants, something needs to change — more contributions from workers, more business taxes, long working lives or poorer pensioners.

The debate seems to be a developed world problem, or as the French would say a “problème des riches”. In SA and many other emerging economies the population statistics look different. Life expectancy is short for many and most 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 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 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 “unretiring”, 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 100-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 previously disadvantaged groups too.  

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 young and older, it is important to think of new flexibilities, shorter hours and the use of technology to support longer working lives. 

By 2050 more than half of all populations in Organisation for Economic Co-operation & Development countries will be older than 65. Emerging and developing economies are expected to follow later. There are no easy solutions. For some immigration is part of the solution.

Since most of us did not have the success of 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 ageing societies and part of having longer, healthier lives with purpose. 

• Prof Smith is director at Stellenbosch Business School.