1Project B8: Demographic Change and public sector labour market

Reinhold Sackmann

Social Protection: Is There a Growing Generational Inequity?

1. Introduction2. Institutionalized Generational Relations3. Situation in the Mid 1990s4. Situation in the Middle of the First Decade in 21st Century5. Future Ways

Presentation at the Colloque “Les jeunes dans une Europe vieillissante. Regards franco-allemands”, Paris 5th March 2007

Corespondence: reinhold.sackmann@soziologie.uni-halle.de

2Project B8: Demographic Change and public sector labour market

Introduction

Social protection is the core idea of the German welfare state.

Key question: Is generational inequity the neglected interest conflict that endangers the discursive hegemony of social protection?

3Project B8: Demographic Change and public sector labour market

1. Institutionalized Generational Relations

= Connections that are set by institutions and may not be directly experienced by a person. Relation of conditions of life and collective experience between historical generations, cohorts, age groups.

Examples: pay-as-you-go pension schemes; seniority rules in labour markets.

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2. Situation in the Mid 1990s

Pension policies and labour market policy, before and after.

5Project B8: Demographic Change and public sector labour market

Pension policies

Pay-as-you-go 1957. Adaptation mechanisms: Minor: wage linkage; contribution adaptation. Major: pre-retirement policies 1970s, 1980s, 1990s.Retirement age fell: WG 61.8 cohort 1904 to 58.9 cohort 1924. EG 62.5 in 1989 to 58 in 1997 (men). + prolongation of life. → increase 5 yrs. duration. Legitimacy crisis by series of minor reforms since 1980s.Generational inequity real problem: early retirement + adaptation by contribution + threatened collective good.

6Project B8: Demographic Change and public sector labour market

Labour market policies

Normal employment contract + workers‘ councils strengthened in the 1970s.

Modest flexibilization of labour market law: fixed term contracts in the 1980s.

Youth unemployment rate near adult rates by apprenticeship system. Generational tensions low: Rise of unemployment rate is problem, not generational inequity.

7Project B8: Demographic Change and public sector labour market

4. Situation in the Middle of the First Decade in 21st century

Pension policies: Break with early retirement path:adaptation by contributions blocked + permanent pension deductions for early retirement.Real retirement age rose: WG 59.6 1996 to 60.9 2005; EG 58 1996 to 59.7 2005 (men).But still legitimacy crisis.

Labour market law.

8Project B8: Demographic Change and public sector labour market

5. Future ways

Security was a major guiding idea.Pension policies: Early retirement put it under stress. Generational equity influenced reorientation towards a prolongation of working life.Lesson: A change of the retirement entrance age is a powerful instrument for a successful adaptation of pension systems. A development towards an automatic minor adaptation mechanism of continuous changes of entrance age might be an interesting option. To stop the de-legitimization of the public pension system.

9Project B8: Demographic Change and public sector labour market

Labour law: Minor revisions. Generational inequity was not a major issue.A change in the bulk of standard employment regulation would be a major alternative.

10Project B8: Demographic Change and public sector labour market

Résumé:

Generational inequity is a major unintended side effect of a welfare state guided by protection. Generational equity inspired reforms in pension policies set first steps toward reorientation. Flexicurity seems to be a guiding idea for a renewed welfare state.

Thank you for your attention!