Germany:
The Return to the 19th Century:
Social Security Retirement Age Goes from 65 to 67

Apr 2, 2007

On March 9, the Bundestag, the German Parliament, passed a law raising the retirement age from 65 to 67. The vote passed by a large majority of 408 to 169 with 4 abstentions.

This measure was put forward by both the “left-wing” Social Democratic party, along with its partner in a “great coalition” since 2005, the right-wing Christian Democrats. Only 11deputies from the Social Democratic Party dared oppose it this reform, even though it is going to mean a considerable worsening in workers’ conditions.

The legal age of retirement is going to increase in steps from 65 to 67 beginning in 2012. Only workers who made contributions to Social Security for 45 years will be eligible to retire before age 67 ... but that will affect very few in the years to come. For each year a worker falls short of the needed 45 years of service, they’ll get 3.6% lower benefits.

In reality, despite the government’s plans to push work for those over 50, no boss really wants to employ older workers. Furthermore, many people actually retire at around 63. Even the labor commission of the Social Democratic Party uses the expression 60+, estimating that in “60% of businesses in Germany no one over 50 years old is employed.”

So older workers will be facing reduced Social Security benefits if they don’t have the 45 years or they can’t pay for the missing years of tax contributions out of their own pockets. Further, Social Security benefits have not increased since 2004 and will not increase until at least 2009. Thus, every year inflation lowers their real purchasing power.

Social Security retirement pensions were first introduced in Germany in 1889 by Bismarck. At that time, the legal retirement age was fixed at 70. In 1916, it was lowered to 65. In 1957, when Germany still hadn’t totally recovered from the destruction of the war, when there was a large housing shortage, and even according to official statistics a million families lived in misery, Chancellor Konrad Adenauer, who was considered far from being a progressive, introduced a “dynamic” pension. That tied Social Security pensions to wages and significantly increased pensions from the poverty level that had been established under Bismarck. They were raised to 70% of the average wage earned by the worker. At that time, pensions rose by 65.3% for blue collar workers and 71.9% for other employees.

Fifty years later, Germany is one of the major economic powers of the planet. It is the biggest exporter in the world. It has an abundance of wealth, yet the rulers pretend that it’s no longer possible to finance Social Security pensions at the same level. Officials claim that this is because of the “catastrophic” increase in the number of those going to retire in the decades ahead. In fact, the real reason is that, after the bosses have exploited their workers for decades, they no longer want to finance even a half-way decent retirement. And politicians of every political stripe, including those who pretend to be on the left, have shown how ready they are to do the bosses’ bidding.