Five measures to make the pension age-proof

Olaf Scholz

Should Olaf Scholz become Chancellor, the aging of the population will be a major challenge for his government.

(Photo: Reuters)

The working-age population will shrink from 52 million today to 43 to 47 million by 2050, depending on the immigration scenario. This is how the Federal Statistical Office calculated it. By 2030 we will lose 2.6 million to 3.5 million potentially gainfully employed people. The consequences are significant, with economic performance falling while the costs of an aging society skyrocket.

When advisers to the Ministry of Economic Affairs called for an increase in the retirement age in the summer, Chancellor candidate Olaf Scholz (SPD) immediately distanced himself from “wrongly calculated” and “not really justified horror scenarios”. He looks forward to a debate with real experts.

Well, after the election, there shouldn’t be any “real experts” who would explain that there would be no problem. If the retirement age remains unchanged, pensions must decrease or contributions and tax subsidies increase.

The latter was already calling for the Greens and the SPD in their election manifestos. Securing the income, however, only buys time. Because more payers also mean more future beneficiaries. In addition, in a world in which virtually all states rely on qualified immigration, the tax burden cannot be increased at will. Already today, around 180,000 predominantly younger and above-average qualified people leave Germany every year.

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If Scholz wants to keep his promise without burdening the contribution and taxpayers more and more, the new government must tackle five measures to secure pensions:

The author

Daniel Stelter is the founder of the discussion forum beyond the obvious, which specializes in strategy and macroeconomics, and is a management consultant and author. Every Sunday his podcast goes online at www.think-bto.com.

(Photo: Robert Recker / Berlin)

  1. It must ensure a higher labor force participation. This ranges from a reduction in training times to a higher employment rate for women and older people. To this end, child care must be improved and the tax burden reduced in order to provide more incentives to take up work.
  2. It must ensure higher income through higher productivity and thus higher incomes for the working population. To do this, investments in education, innovation and the capital stock must grow significantly.
  3. It must keep the burden on citizens as low as possible. Just think of the energy transition, which led to the highest electricity prices in Europe.
  4. It must ensure more contributors by attracting qualified immigrants who, on average, earn at least as much as the population living here.
  5. It must ensure fewer beneficiaries of state transfers by preventing immigration into the welfare system and increasing work incentives.

In recent years politicians, also at the instigation of the SPD, have mostly done the opposite of what would be necessary to secure pensions. It’s time to change course.

The author is the founder of the discussion forum beyond the obvious, business consultant and author. Every Sunday his podcast goes online at www.think-bto.com.

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