Alarming Squib on German Social Security

Johannes Schneider Johannes.Schneider at gmx.net
Thu Sep 28 05:22:36 PDT 2000


John K. Taber wrote:
> Today's NY Times has this squib:
>
> GERMANY: PENSION REFORM The government is pursuing a plan to avert
> bankruptcy of the pension system. Pensions would be lowered to 64.5
> percent of final salary from 70 percent by 2030, and contributions from
> employers and employees would be increased to 22 percent. Payments of 4
> percent of earnings into a private supplement would be phased in.
> Victor Homola (NYT)
>
> Notice the claim "to avert bankruptcy."

That is the usual press sensationalism. But basically the information is correct.


> This looks suspiciously like partial privatization. And worse than
> Kohl's
> Koalition attempted.
>

Certainly. But what did you expect?

Most of the information about the basic numbers is in the FT articles you posted. Let me argue more along the broad lines.

What is really new in the current plan is the private factor, only the upper section of wage earners will afford to pay for. So in future much more pensioneers will have to live in poverty. An important aspect of the private suplement is the fact that it will be entirely paid by the wage-dependants and not by the employers. In the present scheme formally half of the contribution to the pesnsion scheme is paid by the employers.

To me all this talk about the coming 'bankruptcy of the pension system' just reflects the growing disability to secure the future for all in society. Wheras a small minority is getinng richer and richer the vast majority is getting poorer even in the core imperialist countries. But it seems to that you must be an old fashioned Marxist to come to such conclusions.

Certainly public discussion in Germany does not see the present itself in terms of a trend to inmisseration but just as struggle between 'old' and 'young': High payments from the 'young' versus high pensions for the old. It is revealing for theit place in the political spectrum that the Greens are the most vocal speaker for the 'young'.

What is mostly blamed for the future problems of the pension system is demography: Lower birth rates and old people getting older. In this political climate a leading medical official can demand 'socially adequate dying'. But demography is just one aspect of the problems.

Actually employers used the pension fund as a easy means to get rid off older workers without paying them much compensation to leave their job. Thus there is a lot of pressure on workers to go for early retirement when they are over fifty. Nowadays its almost impossible to get a job when you are over fifty.

Furthermore the Kohl government used the pension fund as a source to pay for the takeover of East Germany.

Johannes



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