The Palimpsest of Sawbones Surio

Pessimism of the Intellect, Optimism of the Will

Deeply prevailing PWE sentiments: Redux

with 10 comments

Or, Why your living longer shouldn’t equate to work for longer!

Over the weekend, I heard this podcast from Motley Fool (30 mins long) featured in Monevator recently. It was an interview with Dr Ros Altmann, director general of Saga, the old person’s youth club. Go on, give it a listen if you have the time.

My takeaways were:

  1. It made for very chilling listening because the Government pension which was working fine in India has been replaced with all these private SIP schemes bleeding people dry in the present with various processing fees. A simple calculation of the various “fees”, suggests that it would be a minimum of three years before the fund is actually starting to work for the pensioner. And we’ve got hordes of lemmings flocking at these things, and engaging in “fanboyism” with anyone within a 10m radius! When these usurious “fees” were banned by the regulatory body, the private pensions lobby was so powerful that they were able to reverse the ban and also managed to frame another part of their business instead.
  2. She finished the interview with emphasis on bringing back a whole culture of savings and investments within the general public. In between, it was all downhill for me
  3. Suggested to have lotteries that pay out a million quid monthly for pension fund contributers to keep them “hooked to idea of savings”! 😮 That antagonised her in my eyes even more…. Lotteries as a concept cause more pain and misery and ruin than society cares to admit!
  4. She conveniently placed the entire UK pension blame at politicians’ feet (OK, there’s some truth in that!). But there was no politician to defend their point of view. So it is a boo-boo in my dictionary (see post – look for “Jungian shadow”)
  5. Argued that people must be prepared to work longer than 65-70 because they are living longer anyway! (I couldn’t beat that type of logic even if I tried/could)
  6. Yet more blame at Govt to tackle ageism to promote above proposal

However, there was a small prevailing thought that the last two points mentioned above “are right”. Oh dear! I decided to collect all my thoughts on “why it is not right!” and present it as a (hopefully) coherent narrative. The logic that acceded to the last two points as part of another conversation has been paraphrased here by me.

When social security was introduced, average life expectancy was somewhere around 55, so a withdrawal age of 62 seems reasonable. At an average life expectancy of 78, it doesn’t. So yes, if people want to use SS/a government pension system as their only retirement income, they should have to put up with working longer/withdrawing at a later age.

Don’t you sense the PWE sentiment that drives this kind of thought process? That’s the first objection I have! But it is not the only objection. Read on to share my thoughts.

The Humane objection to that:

If anything, that premise itself would be unacceptable (at least to someone like me) because we are acknowledging with that observation that we expect people to contribute a certain amount into this pension kitty throughout their working lives with the knowledge that most will never benefit from the resulting largesse. In any form of society, that would just be frowned upon. One small point; retirement age used to be 70, so most paid up but never lived to take benefit of it. When the lid was blown there, the retirement age was lowered

But let’s go with that story for the moment:
Let’s say, we have someone joining the workforce when they are 22. Young, fit and in their prime (There was a time when I was able to run a half-marathon at 27, but now in my mid-30s I no longer feel up for it. Basically, that is to highlight our own changing priorities towards things as we grow old(er)).

The workforce are brainwashed into believing when they joined the workforce, that if they slug it out for 30+ years they “will get a retirement cake” and they can take it easy and stop and smell the roses when they turn 60. I know from my own experience with the “great middleclass” that by 50, most are really looking forward to the time when they will simply sit down and enjoy their coffee without being a slave to the clock (I seemed to move with only people with that kind of wish. YMMV). In fact, many within the public sector banking, regardless of their rank/scale took “early retirement” with severance pay, despite having the chance of one more promotion (and with it, being able to draw more pension). So, it would be cruel for someone who was really loking forward to put their feet up, to be told today that it is not 6o, but maybe 72 or 75 because, guess what, you live longer, so you need to stay at work longer (If it had happened elsewhere, this kind of forced working would be termed as a communistic gulag! :-P).

By accepting this as a given, we are simply mouthing what “they” (the financial institutions) tell us as a given fact (an axiom). Why should it be? The workforce did not ask for longevity, it was a side-effect, a consequence so to speak. A stretched analogy would be: A rising tide takes all ships with it, but it would be rather foolish to overload the ships now, because you find the the waterline to be high, and therefore the ship’s rudder can sink more! Not fair to the ship, because the ship did not ask for the tide, nor is the ship in a position to reject the tide and sink itself to commit suicide!
So, in summary, forcing someone to re-join or stay in the workforce simply by looking at the numbers (age) on the left, the payouts to be made on the right(*) and asking them to grab their shovels and pick-axes once more because (Woo Hoo!) they will all be living longer anyway!
I propose a new term for this kind of attitude: “bean counter nazism”
(*) Most Western Governments have actually resorted to using up this pot for various cold-war funded activities and don’t have the money to pay-out. That’s the conspiratorial truth!

Objection 2: If we decide to keep them on the job

OK, laying aside the humane side of the issue for a moment, it is decided to keep their nose back to the grindstone, what happens then? Wel, it so happens that the world population is at ~6.9 billion (last time I checked), and it was relentlessly moving up not stopping, not slowing…nothing! What about the number of youg people coming to work every year out of this number? For ease, I halve it for employable age? Now I halve it for young people as well? So, I have 1.72 billion people left. This is a global number. Last time I checked, this FLAT world was full of sovereign nations, capable of deciding what can and cannot pass over their borders (visa fees hike (USA), cap on immigrants (UK)), and under what conditions they pass (import tariffs, EEA, EEC, GATT, NAFTA……), which means these numbers get accounted and broken at a local level, i.e., country level. Please bear with me while I quote a sci-fi writer who berates us all for obsessing ourselves with numbers and quoting them to bamboozle and impress:

On the other hand, the statistics of Chapter One are beyond reproach. They tell how many people there are נand thus how many living human bodies נin each minute of the 525,600 minutes of the year. How many bodies means: the amount of muscle, bone, bile, blood, saliva, cerebrospinal fluid, excrement, and so on. Naturally, when the thing to be visualised is of a very great order of magnitude, a populariser readily resorts to comparative imagery. The Johnsons do the same. So, were all humanity taken and crowded together in one place, it would occupy three hundred billion liters, or a little less than a third of a cubic kilometer. It sounds like a lot. Yet the worldӳ oceans hold 1,285 million cubic kilometers of water, so if all humanity נthose five billion bodies נwere cast into the ocean, the water level would rise less than a hundredth of a millimeter. A single splash, and Earth would be forever unpopulated.

So, on with the story:
Already the soon-to-retire generation have had to go through upheaveals of their own where the carpets were pulled under their feet constantly (as jobs farmed out everywhere else in the name of globalisation). These people had no part to play in it, except when the axe landed on them. Indeed everyone talks about how having a $100,000 UAW auto-worker is making Detroit uncompetetive with regards to a $5000 SAIC worker, but I ask you, he didn’t demand that much. The bulk of that amount being quoted is taken up by their heathcare! But we convinently ignore that aspect (And Obama hinted further medicare/medicaid cuts in his state-of-the-onion-speech) while piling more misery.

Now as part of the “worker-bee” economic model, new workers must replace the old guard (either by promotion, new graduates joining the workforce, or if everyone wants to mooch off benefits, import them from other countries) for the existing jobs in the market! What happens when educated youth who have been led to believe in the “brave, new world” where everyone can be an investment banker, find themselves completely unemployed for many reasons (one of them being oldies have to work for 10 more years, say)?

Sudden Death Outcome

Providence, with a heavily ironic sense of humour has provided me with two revolutions: 1) Tunisia and 2) Egypt whose agenda seems to be high unemployment and food inflation channelled as a discontne towards incumbent Govt.

Yet another footnote in relation to those revolutions. That was written in Feb/June 2010, depending on which country you are reading it from! Chilling premonition, or self-fulfilling prophecy, I leave you to decide!

In 1950 Egypt population was 22 million, now it is 75 million! More than three times larger. They still have the same amount of arable land, but it is less fertile now and less water from the Nile River, their main source of livelihood. Result? More poverty and population dissatisfaction. Western people are unable to grasp the level of deep poverty in the slums of Cairo, for example, it is similar to India’s notorious slums. Obviously, this population growth leads to larger use of resources, more food, more clothing, more electricity, that is: more energy and more GHG emissions. Egypt has to be governed by dictatorship since otherwise the population would revolt.

Slow, painful death outcome

OK, some people take the population growth argument and turn it around its head. The argument goes like this:

  • World population growth is slowing and will begin to decline soon.
  • This creates a problem for social services that depend on a large number of employed people supporting a small number of unproductive people.

Ergo, keep the existing workforce going. This is a linear progression of thought that fails to take the “leapfrog” technologies that seem to overtake us everyday, leaving us feeling like “lower animals” (see quote referred here). In other words,

  1. The Japanese, faced with a negative population growth and surfeit of elderly needing care, have simply resorted to creating various types of nurse // robots
  2. Who needs teachers anymore? All those English teacher-bloggers living in South-Asian countries advocating lifestyle design, please take note 😉
  3. And then to add insult to injury, who needs waiters anymore?

So, I note with ironic hilarity when consumerist junkies that promote debt-driven economies suggest (as Ros Altman does in her podcast) that part of the solution of the decling population is that younger people can find jobs in restaurants or work in hair salons to service this already worked-to-death senior citizen who is being asked/forced to continue work for 10-15 more years. Hmm, will there be a waiter job for humans, going forward? On that note, will there be a job for the soon-to-retire?

The persistent myth of the pension pot

Companies engineer movement of jobs all the time with deliberate intention of keeping workers in a state of anxiety…. “M&A”, “outsourcing”, “JVs”, “synergistic partnerships with offshore collaborators”, “virtual office assistants”, etc…etc… OK, I don’t want to sound Marxist here, but take a look at the announcements here
and scan for the following words: closures, downs shutters, cuts working days, shut down…… Granted it is 2008 news, but I am too lazy to refine my search… I leave it to you to refine it, but I do know that in 2009, this happened among others, and in 2010, this lockout hapened near my neck of the woods – and they are one of Bangalore’s biggest blue-collar employers! For Apple fanboys, here’s the latest on Foxconn India! And I will take a bet, those jobs rarely, if ever come back to original state of play.

It is those type of workers all over the world, who were brainwashed that the trade would feed them, clothe them and put a roof over their heads (iPods, FTW!) after they retire, rely on a small pension towards their “planned” (by someone) obsolescence. The college-educated jobless can frequently move to find other paper-pushing jobs “wherever” they may be available, but what about these types of “blue-collar” workers?(*)

(*) It takes five fingers to make up a hand, in the same way it takes all kinds to workers when you talk about “workforce”, right?

OK, the jobs have moved from USA to Malaysia to China to Vietnam to India to wherever it goes next. In the process the organisation has stayed in the black and its operations run “as usual”. What about the workforce it leaves behind, who are unable to find a job? Yes, there’s a severance that’ll take care of them while they hunt another job, in the same way the Indian Government will extract all the Swiss black money and create a brave new India.

So, where is the “pension pot” for the original worker who signed up 30 years ago, not knowing he will be left hanging 20 years down? Where’s the “job” for him to go back to in order to continue working for.

Already, the new wave Indian companies who are themselves products of “flat world” outsourcing are becoming smart enough to open “offshore” centres of their own in SE-Asia… So, what happens to the jobs that used to come from the “mothership” to the “offshore centre”? What happens to the unemployed that are left behind as the Indian operations farms it out to SE-Asia “offshore centre”? Presumably some cynical t**d will create an Indian version of this and this to keep the masses opiated from joining a revolution!

As the post is going beyond 2500 words and I will stop for now. Based on the interest I recieve on this topic, we can take up Part II/IIIs if needed.

Frankly there are no easy solutions to this. And I don’t have the answers for these problems. But it is certainly not the airily worded solutions from the “experts” that we should continue to “soldier on”, since that is what “they” tell us to do, since it is the “only way forward”! Bah! Humbug!

As one modern philosopher puts it:

“the task of the philosopher is not to act as the Big Other who tells us about the world but rather to challenge our own ideological presuppositions.”

I have challenged myself on this one for long. Have I managed to challenge you today?

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Written by Surio

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10 Responses

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  1. I’d agree with the tenet that “living longer shouldn’t equate to work for longer” but some of the assumptions I’d take issue with 🙂

    In the modern world, we need to educate everybody that if you want to retire, you have to take charge of things yourself. You can’t trust companies, and to be honest you can’t really trust governments.

    The corollary of this, if for people who are bright enough to take the education, they get to decide when they retire – either like ERE at 35, never getting to buy a house and living in a RV and cycling everywhere, or at 50, when they might have lived frugally and got some of the niceties of life, or at 70,if they want to spend like most people do during their careers and save only 10%. Or never, if they want to live high on the hog and borrow money.

    The tragedy is that most people cannot assess and qualify the risks to their strategy, and far too many people prioritise now against the long term. Perhaps we need a form of Logan’s Run as an alternative 🙂

    The issue of whether we run our economies to permit companies to privatise all the profit ans socialise all the costs is a different argument, which is hard to win when there are countries in the world prepared to host them doing that. I didn’t realise you guys had such serious problems with this. Be afraid, be very afraid, as the line in the movie says…

    ermine

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    • @ermine,
      I wish you’d point out some of the assumptions you take issue with. It would help firm up my thoughts. I know for a fact, that any “narrative”, however coherent could fall victim to “narrative fallacy”. I am willing to be held accountable for that 🙂

      As to the other points raised, I agree but with some qualifications on some.

      1. Hindsight is always 20/20 (6/6), and this idea of taking charge of your own retirement is a relatively new trend, no? What do we do with those others who had trusted the system (what else could they do, anyway?) in the past and gone with the prevailing trend of putting into a pension contribution? Too late to ask them to start saving now, isn’t it? Perhaps Logan’s Run (“Running man”, for modern audiences) sounds like it then ;-). (We’re both joking of course. Only Jacob might be able to outrun them between us three)

      2. Re: ERE, I was interested in campervans and caravans even in the UK, but in India they are yet another rich man’s tool. If I need to adopt that model, I got to come back to the UK. You have enough Jimmy Foreigners there already w/o me joining ranks, thank you. 😉 So, ERE is a concept with many ‘avatars’ in practice. Let’s see where mine goes.

      3. To a large extent I agree most people live high on the hog and need to bedisciplined in their life, but can we really blame them? Most of the workforce of today don’t know when a job might move away and leave them worse off than they were yesterday with social upheaveals. In such a case, would you constantly keep re-training just to remain still, or would you simply say, “Sod this ‘retraining’ business, I’m off to the pub now”? Yes I know it is a stupid line to take, but then again I don’t hold too many candles to humankind’s intelligence anyway.

      P.S: I am playing devil’s advocate. I agree with the sentiments. There’s far too many benefit frauds out there than there are genuine cases. How are they called, “Chavs”?

      Surio

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      • It’s a fair cop, guv. I agree with more of Ros altman than you do, though I do not suffer from PWE 😉

        1 – sounds like your SIPs are doing our personal pensions late 1980s redux. Even as a callow youth I could see that was a raw deal (specifically in the UK then because one loses the employer’s contribution). If it looks too good to be true, then it isn’t. In some ways I support the move away from government funding because who knows what world and government you will have in 30-40 yrs time.

        3. Lotteries seem to be a particular culturally sensitive issue in India, I noticed this talking to some guys from India we had round for a meal. In the UK they don’t seem to cause the social problems that our guests feared. Yes, of course they relieve the stupid of some of their money, and sell empty dreams, but much of capitalism does that too. I support Ros Altmann’s view that may drum up interest, in the UK cultural system. It may not work elsewhere. Apologies if I am creating a serious cultural faux-pas here – I don’t know the background, perhaps in India there has been a real problem which I wouldn’t like to gainsay.

        4. In the specific case of the UK, much of the problems can be placed at the govenrment’s feet, for destroying the state earnings related pension, for removing the dividend tax credit, and for Thatcher’s linking of pension to inflation not earnings which has recently been reversed FWIW. I am with Altman there too. That is not to denigrate your good point that society should hold companies’ feet to the fire for socialising costs while privatising profits, but unfortunately we can’t hold them to account because they will simply run away.

        5. Most pensions are effectively an annuity not a foundation, and are designed to pay for about 20 years of life after retirement. If you want to have 30 years of retirement, you need to draw less, save more, or work longer to restore the original assumption. ERE targets a foundation pension (ie one that never runs down the capital, a bit like a charitable foundation has no time limit) but most people don’t like the amount of money you have to save to do that.

        Re taking charge of your own pension, I for instance am doing some of that in the last five years of my working life. I believe there is a serious risk that either company or financial failure will hazard my company pension, so I am seeking diversification across asset classes and investments to hedge that. I don’t really expect to draw a State pension either. In some ways one’s late 40’s into early 50s are a good time to save as you have more spare money – I have paid my mortgage and have got most stuff, so I can save like ERE but without living in a RV (what will ERE do when he gets old?). I will seriously improve my resilience in such a short time, so it can be done for some people. But you have to give up the iFads and annual holidays for a while.

        I have done with retraining too 😉 The only retraining I want to do is with things that are fun or that have lasting meaning/value. The latest Cisco IOS is not in that class.

        ermine

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  2. Good, you have a blog. I read your post and all of a sudden I realized that your content reflected my ongoing thoughts of the last ten years. So your content is indeed correct, from one who has analyzed the trend you write about, having lived it. You seem to be asking “where” are the employment benefits of one Ward Cleaver (Beaver’s dad). I would ask you “where” is Ward’s company, and “where” is Ward’s middle class home? Knowing the answers to questions above would come within rock throwing distance of a solution to your posed implications in your post.
    Could there have been:
    Greed in his company–merger, offshore movement?
    Greed in his home–(downtown to suburbs full of McMansions)?
    Greed in his marriage—(Ward found out he is gay and into leather)? No more “Traditional” marriage for him.
    Greed in his auto—-No more 57 Buick–give the man a Lexus or BMW.
    Some of this will tell you what happened to the old adage of “Employee Benefits”. They were found to hurt corporate profits.
    BTW: Seeing you operate a blog, (and I shall examine it more later), I have “bookmarked” your page. (Why do they say bookmark?) I prefer “add to favorites”.

    HSpencer

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  3. Almost forgot. You get points for not having one of those little boxes where you have to figure out and copy word into it which will “insure” you are not a spammer. Neither does ERE have that box. (Points awarded there as well). I accept that the box is a “anti-spam” fix, but it is difficult at best using “some” blogging software.
    Thank you for not smoking or having a little “word box”.
    (I used the joke “Thank you for not smoking” because I have one in my office next to my ashtray, having stolen such sign from a motel).

    HSpencer

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    • LOL! Didn’t realise it causes such misery, although I’ve struggled with those “captchas” myself at times.

      Surio

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  4. @HSpencer,
    Thanks for the comments.

    Indeed, I have considered the workforce to be as pure as driven snow in the narrative. So thanks for pointing out that they are Only Human after all ;-)!

    Perhaps it is worthwhile to reflect that in the long run, we end up creating the world that we will live in. So, let’s hope the blog reading, enlightened current crop can learn from the previous generations’ mistakes and do much better!

    Surio

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  5. […] regards to my earlier post, Deeply prevailing PWE sentiments: Redux, I got a few comments already as to the fact that I do not have alternative proposals lined up. I […]

  6. @ermine,
    Interesting observations. 🙂
    1. That’s the catch-22. It is like the proverbial horse. If you approach from the front it bites, and from the rear, it kicks! Total “Yes” from me too, on the Government not to be allowed into this at all(*), but I must note (with heavy irony indeed) that so far they’ve been the most honest about payments! 😮
    (*) what with all their scam-after-scam performances, irrespective of the party in power
    3. Bless your beak for being aware of the lottery problem – here vs. there. I used to observe some “lottery addicts” in the local corner/co-op shops in the UK, but if you tell me it’s not so bad in the long, then I am willing to concede that point to Ros.
    4. I agreed on that myself! See: “There’s some truth in that” line in post. My point was that it sounded bad because there was no one from that side of fence to at least present a “weak as dishwater” case and mumble “it was labour/tory/EU/whatever’s fault” ;-). Where’s the sense of fairplay that was drummed into the colonials all the while, Eh? 😉
    5. See, I agree on all these points. And I’m in the same boat as you are, hunkered down and squeezing every bit for my own ERE avatar — with underwater mortgage post on the cards shortly :-|. But there’s a (really) “woolly” part of me that feels always there’s a large part of the unseen workforce(**) that’s cheated and ignored in this “flat world” furore! (I know, Guv! misplaced compassion is the root of all misery! Oscar Wilde, paraphrased there)
    (**) that helped make all thing things we “office dweebs” take for granted

    P.S:- About all people to be able to help themselves: I remember the times before Internet stock trading accounts when it was difficult to buy and sell shares, and damn those brokers for misleading you all the time! And about access to information on the Net. The middle-aged/getting-old may manage to get on the internet, but won’t know what to do afterwards – and these are people that are already a little short on cash and IQ. Enter more “brokers” to help them with the process (for a fee of course!) and the vicious cycle continues. But this is one side of the story only… The same said public somehow manage to find Holidays to Aya Napa without any help needed! Oh well… I’ve shot myself there 😦

    And invariably they would be the ones to sacrifice/make cuts/blah blah…That’s why I felt like writing this post.

    Re: Training, 😀 good one!
    I remember reading somewhere that “education enlightens, but training lightens” (the brain, that is). Trite it may be, but true it is!

    Re: caravan ERE, one point:
    Some retired (UK) friends of mine lived in a caravan in Spain for nearly 6 months and back on their allotments in Spring :-D. So I never thought it was an issue, to be honest…Hmmm? But, it shouldn’t be too bad for Jacob either, considering he’s bunkered in Sunny California.

    Surio

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  7. […] post on the series about “Old age vs. Retirement age”. The earlier posts can be read here and […]


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