The Neo Liberals Offers
Deconstructing the argument “demographic”
The demographic argument raised the neoliberals is simply an excuse to justify reforms, not to guarantee the sustainability of public pension system, but to favor capital.
Professor Vicente Navarro explains very well the neoliberal fallacy of the argument. First, the fact that it has increased life expectancy (4 years in the last 20 years) is due largely to demographic effect caused by the reduction of infant mortality, so this increase in the hope life does not mean that people die 4 years later, in fact, discounting the effect of child birth, die on average 2.3 years later.
It is a mistake to assume that since people live longer, so people can continue working after 65 years with the same capacity and vitality of job you have at 65. It is assumed therefore that age live longer also slows aging. Hence it is considered (wrongly) that if now people reaching the age of 65 live 2.3 years more than twenty years ago, such people will have 2.3 years more of healthy life, delaying old age of 2.3 years. But this unfortunately is not.
Furthermore, this increase in life expectancy is not equal but depends on social class, so that, for example, a businessman living 10 years more than a precarious worker. Therefore, the extension of retirement age it does is force the precarious worker to work two more years to enable the employer to collect their pension over 10 years.
Neoliberals say that the current pension expenditure represents 9% while in 2050 will account for 15%, resulting unsustainable. However, this expense in 1970 represented only 3% of GDP, but not for having tripled the percentage of current spending is unsustainable, quite the contrary since the Social Security even has a surplus. How is this possible? In much of the increased productivity that makes each worker generates more wealth. Therefore, the future productivity gains will be sustainable spending 15% of GDP. Moreover, according to the estimation of V. Navarro, an increase of 2% annual productivity would cause GDP in 2050 was more than double the current spending so that even a 15% pension would leave a greater amount than the current available for other expenses. What is more, at present the pension expenditure in Italy and represents 15% of GDP in France and Austria is about 14%, and by no means have broken their public as threatening will happen in Spain (in fact If the above entities as BBVA forecasts had been true, the Spanish public system should have already broken).
Now, what happens is that capital wants to fully exploit the benefits of increased productivity, ie the surplus generated by the work. This is simply the class struggle and has nothing to do with demographics but with political will. And here is the debate, where we want to spend the wealth generated by the work, to further enrich a minority or ensure a dignified life to the whole population? While the PSOE, the PP, the economic and neoliberal international organizations (EU, IMF, OECD) bet on the first option, since the Communist Party and from the United Left Clearly we will always defend the interests of the working class, although this not “reassure” the markets.