Extension of retirement age beneficial to society
Updated: 2015-02-09 07:36
By Eddy Li(HK Edition)
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Taking into consideration the suggestions of the Steering Committee on Population Policy, the HKSAR Government recently announced plans to encourage extending the retirement age.
They plan to do this by first extending civil servants terms of service by five years. The retirement age for all newly employed civil servants will be raised from 60 to 65, with immediate effect. Those already in service will be entitled to delay their retirement.
As far as I'm concerned, Hong Kong has come to the point where an immediate decision is crucial in tackling the problem of the aging population and labor shortages. So this is a timely announcement. It will encourage more private companies to follow the government's lead and retain experienced employees. This can undoubtedly reduce the waste of human resources and boost the economy.
Over the decades, Hong Kong's demographic composition has completely changed. In the 1970s to 1980s, when the city was enjoying its economic launch, more than half of the population was aged under 30. According to the Census and Statistics Department, the median age of the population in 1991 was 31.5. Within 20 years, this number had risen to 36.7 in 2001 to 39.6 in 2006 and even further to 41.7 in 2011.
By the year 2041 it is estimated that the median age would reach 50. Therefore, the age of the population is a huge challenge for Hong Kong. It directly influences competitiveness due to a reducing working population.
The Steering Committee on Population Policy predicted in 2013 that those aged 65 and over would increase from 980,000 in 2013 to 2.55 million in 2041. This equates to one in every three people being elderly. As for the work force, it will likely drop from 3.55 million in 2018 to 3.38 million by 2031.
In fact, Western countries are already dealing with the problems of an aging population. In the United States, Germany and France, the legal retirement age is above 60, while in the United Kingdom the government even forbids companies to enforce retirement at 65 years of age.
As longevity increases worldwide it has become a tendency internationally to extend the retirement age.
Under such circumstances, there are many benefits to the extension of the retirement age - it is beneficial for the company retaining the services of experienced workers, it is beneficial for employees as they are able to continue earning, and it is also beneficial for the government as it alleviates the burden of social welfare. Moreover, it also enhances the return rate from expenditure on education.
It is acknowledged that raising a child in Hong Kong costs the parents a minimum of HK$4 million. And as a former member of the University Grants Committee, I'd say this is a low estimate.
Apart from 12-years of free primary and secondary education, the government annually spends an average of HK$200,000 on each college student. It is difficult to determine a fixed figure, but it is conceivably a considerable cost.
Judging simply from economic principles, the longer college graduates serve society, the higher the rate of return. But it is shameful that the higher the level of education a person receives, the fewer years he stays in the workforce to pay society back.
In future, society will still consider people of 50 years of age to be young, because half of the population will be older than them. Therefore, with the improvement of modern medical science, 65-year-olds will still be vigorous and youthful enough to make a contribution to society, should they so wish.
I welcome the government's policy proposal and hope it will win universal support throughout society.
(HK?Edition?02/09/2015 page10)