Both old, young oppose the change . . .
Although short on details, Chinese policy-makers confirmed last week that they will raise the urban retirement age to head off an impending crisis of too few workers supporting too many non-working older people. China’s retirement ages are among the lowest in the world – 60 for men and 55 for most women. These have not changed in more than 40 years despite increasing life expectancy and the shift from physically demanding manufacturing work to white-collar jobs. When the idea of raising the retirement age was raised in November, it provoked a backlash, both by those nearing retirement age and by younger workers, who worried that keeping older people in the workforce would dampen their employment prospects.
Backed into a demographic corner . . .
While the ‘greying’ of Chinese society is not a new issue, the problem’s scale and its economic implications are nearing disturbing inflection points. Between 2010 and 2020, China’s old-age dependency ratio – in brief, the proportion of retired people to workers – climbed from 11 per cent to 17 per cent. By 2040, it could reach 38 per cent (Canada’s is 27 per cent). Raising the retirement age will alleviate some of the pressure on the urban pension system, which some say could be insolvent by 2035, raising the alarming possibility of increasing old-age poverty.
Turning a blind eye to root causes . . .
Policy-makers have been far less decisive – bewilderingly so – about addressing the other end of the population pyramid, namely, persistently sluggish birth rates. In early 2016, Beijing replaced the one-child policy with a two-child policy. But after a slight and brief bump in birth rates, they subsequently declined. There is discussion about removing limits on an experimental basis in the three northeastern “rust belt” provinces, Heilongjiang, Jilin, and Liaoning, where birth rates are especially low. Experts questioned the need to experiment, given the already dangerously low birth rates. The public, meanwhile, said that regional economic investment was needed to incentivize families to have more children.