The European Youth Forum has published a report on social inclusion of young people, focussing on the life-long consequences of exclusion of young people from the labour market and from standard labour contracts. AGE Platform has been member of the editorial board of the publication, bringing in its expertise on pensions, and the further consequences of pension reforms on retirement of currently young people.
4 million young unemployed
The Youth Forum points out that youth unemployment in Europe continues to be high, and an increasing number of young people face long-term unemployment right after their education. Internships, short-term work or other forms of non-standard contracts inhibit them to acquire social rights such as the right to pension benefits from their first work experiences on.
Pension reforms requiring higher job stability
The increasing precariousness of young people has life-long consequences also with regards to recent pension reforms. In the last decade, benefit levels of pensions have been reduced and indexation mechanisms have been less tied to the growth of wages and prices. In parallel, member States hope to develop more occupational and private pension plans, often based on defined contributions. Precarious starts into the career mean that young people may not be covered by collective agreements that give rights to company pension schemes, that they might not stay in employment for the same employer long enough to acquire rights under an occupational scheme and that they have less available income to save privately for their old days. Due to very long accrual rates for young people, this has a disproportionate impact on savings at the time of retirement.
The effects of precariousness and pension reforms also bear the risk of increasing inequalities, especially between currently young men and women. The current gender gap between men and women is already at 40% and many young women than men spend time out of the labour market due to care for their children and/or grandparents. A higher dependency on occupational and private contributions to pensions means that women are more disproportionally affected by pension reforms than men.
Intergenerational equity in pensions
The Youth Forum calls for more intergenerational equity, which means creating pension systems that ensure both the well-being of currently older people through adequate pensions and manageable contribution rates for the currently young. At the same time, contribution systems have to account for new life-courses in terms of non-standard contract and times spent outside the labour market because of care duties.
Long-term care: an issue for social protection systems
The Youth Forum report also contains a section on long-term care. With the ageing of society, more services are needed to fulfil the needs and to support the autonomy of older people – a lack of such systems will transfer the care responsibilities on the shoulders of younger family members, who will have to reduce employment to cater for these needs. However, fees for long-term care have often been raised and countries which have a care system predominantly focussed on the family have not triggered the needed investments to build up a formal care infrastructure for the future.
AGE Platform Europe welcomes the report, which shows that challenges for current older people are also important to resolve the question of adequate pensions for the currently young. AGE Platform also welcomes the method of the Youth Forum, including many other social organisations in the editorial board of the report.
European Youth Forum: European welfare states are failing young people