In 2011, the 'Baby Boom' generation will begin to retire. Bythen, the stark reality of the 'greying' of the population inNorth America and Western Europe will have brought the inadequacies ofthe state and private pension systems home to all levels of society,and the pension crisis will be actual rather than impending.
In The Political Economy of Pensions, Richard Deatonexplores the factors involved in this high-profile issue of publicpolicy and shows the insufficiency of recent reform initiatives inCanada, the United States, and Britain.
Four converging considerations explain the imminence of the pensioncrisis. First, while it is commonly assumed that 70 percent ofpre-retirement income will be sufficient for a one-earner couple tomaintain its standard of living, few pensioners receive this amount,and polls show that those not yet retired expect or want full incomereplacement. Second, the proportion of elderly people in the populationwill dramatically increase in coming decades; the number of employedworkers for each retired person will fall from seven to three, whilethe costs for elderly dependants rise. Third, the majority of workersin all three countries have no coverage under employer-sponsoredprivate pension schemes, the percentage of those covered has beendropping in recent years, and many of those who do have privatepensions receive only partial or unindexed payments. Finally, thecorporate sector and the state have been appropriating pension funds asa source of investment and social capital to meet their financialrequirements.
The pension system now occupies a strategic economic position inadvanced market economies. Consequently, the conflicting interestsunderlying the pension crisis could generate a heightened awareness ofpower and politics in capitalist countries and increase social tensionsmanifesting themselves through intergenerational, sectoral, political,and industrial relations conflicts.
The Political Economy of Pensions identifies personalproblems and structural issues which may have significance in terms ofpower, politics, and social change in the future. This timely andprovocative comparative, interdisciplinary study will be of interest tothose involved in social policy, gerontology, economics, industrialrelations, or social work, and others concerned with pensions and agingor with the social impact of public policies.
