The debate on age
By Sivia QoroTuesday
www.fijitimes.com - April 07, 2009
Currently 33 per cent of our population are under 15. This youth population is projected to decrease to 18 per cent by 2045-50.
I read with interest the unequivocal stand taken by the interim Government, which is now under much discussion, to reduce the retirement age to 55 and, amongst other reasons, to save much needed cash required for capital works and, as a by-product to provide employment for younger recruits who are actively seeking employment.
These goals although commendable are often short lived if not looked at within the context of social, economic and policy environment that exists both now and into the future.
Such major policy decision must be based on quantitative research and findings, and comparative analysis undertaken with other PICs and developed countries.
There must be very close consultations with the Ministry of Employment, Bureau of Statistics and the Ministry of Commerce in particular the Micro-Enterprise Development Unit.
Available statistics reveal that the formal sector in Fiji and other major Pacific Island countries represents between 25-40 per cent of the economically active labour force.
This is due to the low realised investments and how the formal sector employment has failed to meet the burgeoning supply of new job seekers.
The private sector has only been capable of absorbing approximately one-half of the new labour market entrants yearly in previous years. Based on the 2000 - 2003 figures of the 17,000 persons seeking employment each year, about 8000 are expected to succeed in gaining formal sector work.
This is assuming that the formal sector employment would grow at a rate of 2 per cent per annum or a total of 2400 new jobs created annually combined with the expected natural attrition rate and replacements for emigrating persons.
With the current political situation and ADB's recent analysis of the worsening economic trend and growth in Fiji the situation would be reaching critical levels now.
Consequently it is the informal sector, representing between 60-75 per cent, that should be the focus of any government policy decision.
It would continue to absorb the bulk of the job seekers who annually enter the labour market and particularly for countries like Fiji where the bulk of its workforce is still employed in the traditional agricultural occupations including those in the informal sector.
In total 9000 are expected of those seeking employment to enter the informal sector.
It, therefore, stands to reason that reducing the retirement age to 55 does not in any way have a major impact on the national figures in as far as the 'flow' of labour supply and demand situation is concerned.
Especially when one considers that those proposed to be retired are still able to work given their physical and mental abilities and would be expected, with some exceptions, to join the long line of job seekers.
So on the one hand one is 'successful' and is able to absorb the new graduates in numbers, the equivalent number representing those over 55 years retired, due to new compulsory retirement, will again try to re-enter the job market by joining the long line of job seekers especially in the informal sector.
One, therefore, asks the question what should be the appropriate retirement age?
Earlier media statements have underscored a number of reasons to keep retirement age at 60.
It is important to highlight that the proposed low retirement age of 55years, as is the case here, is often perceived as a partial solution to youth unemployment - retiring persons are replaced by unemployed youths - but statistics abound worldwide that demonstrate that this does not happen in practice.
Retirement age must also be set to avoid persons retiring when their skills are still needed.
This is critical for Fiji when seen in the context that so many skilled workers have left for greener pastures overseas due largely to the political instability in this country.
Such policy must also be looked at in line with the demographic trend in Fiji.
Currently 33 per cent of our population are under 15. This youth population is projected to decrease to 18 per cent by 2045-50.
Under this scenario the problem of unemployment will gradually diminish so the issue would be maintaining a work force which can produce output for the entire population.
The effect of population ageing needs to be also researched and factored into the framework if the policy is to be meaningful and enjoy some form of continuity.
Such policies in my view cannot be introduced 'willy nilly' without extensive consultations with the major stakeholders.
It must be taken in the context of other developments taking place in other sectors.
Such policy must not reflect the nature of the tenure of the government, be it interim.
It must be designed for long term solutions keeping the very interests of our people in mind and to form a firm foundation on which other policies can be built upon.
