The union of Greek industrialists (SEV) has painted a dire picture of the state of the Greek pension system, saying basically that it is running on empty, and that the country’s beleaguered private sector has taken on a disproportionate share of the burden to support pensioners and the public sector.
Given Greece’s low birth rates and rising life expectancy, the pension system is set to come under immense pressure in the coming decades.
In its weekly report published on Thursday, SEV said that each private sector worker supports 2.8 people who are either unemployed or work in the public sector.
Moreover, just 43 percent of women and 14 percent of people aged between 15 and 24 have work, compared to respective average figures of 61 and 33 percent for the European Union’s 28 member-states.
“Retired people are facing the future with increasing insecurity as their pensions are being reduced,” the SEV report said, adding that out of a population of 10.8 million, a staggering 806,000 people work in the public sector.
The report put the number of people who work in the private sector at 1.6 million, while self-employed professionals, farmers and others amount to 1.3 million.
People receiving retirement, disability and other pensions amount to 2.6 million (plus 150,000 outstanding pension applications).
As things stand now in Greece, the number of people aged below 15 and over 64 (i.e. those who don’t work, including mothers, children, seniors, the unemployed) will almost double by 2050.
To make matters worse, Greece’s population is declining and getting older.
By 2050, the population will have dropped to 9 million, with one in three people (34 percent) aged 65 and above, compared to 22 percent in 2020.
Moreover, by 2050, there will be one worker for each pensioner. A lack of pension reserves will force workers not just to support themselves and their families, but to pay taxes to prop up senior citizens.
According to SEV, in order to reverse these trends, there must be a higher participation of women and young people in the workforce and a well thought out immigration policy, as well as support for active aging – the idea of longer activity, with a higher retirement age and working practices adapted to the age of the employee.
But this presupposes a healthy environment of economic growth, which, through private investment, will create jobs.
Technological advances and their impact must also be factored into the equation as they are expected to create many discontinuities and new requirements in the labor market.
The report recommended a strategy that will include tackling the country’s brain drain, raise birth rates and promote active aging in order to put the brakes on the unfolding pension crisis.