Is there an end to poverty anyway?

Age todayPoverty in old age

We want to see it positively: Currently, 82.8 percent of those over 65 are not affected by old-age poverty, 78 percent are never threatened by poverty. But unfortunately this also means that 17.2 percent of those over 65 are at risk of poverty, and that 13.1 percent are repeatedly or even permanently poor.

The risk of poverty among the elderly is growing faster than that of all other age groups. In Baden-W├╝rttemberg it has been above the poverty risk rate for the general population for several years. It is also alarming that the exclusionary effect of material poverty in old age is reinforced by the fact that this phase of life is associated with physical, health and social restrictions and that social participation is becoming increasingly difficult.

In addition, the elderly are an increasingly large part of our society. Since fewer and fewer employees will have to finance more and more pensioners in the future, the pension law has been changed since the turn of the millennium. The pension reforms from 2001 onwards have caused statutory pensions to fall. This process is still going on at the moment. Both the existing pension law and the current reforms favor those who have earned average to good earnings for 45 years. Those who have below-average earnings, who have worked part-time for a long time, who have mixed career histories due to family phases, illness and unemployment, can no longer achieve adequate pension levels.

The statistical figures are taken from the State Poverty Report BW 2015

Poor people are punished

The risks of poverty in the earlier phases of life limit people's development opportunities. At the moment, people are being punished with old-age poverty who have had poor chances in the job market for the rest of their lives.

For many people, poverty in old age is the continuation of a poverty biography.

It is thought-provoking that old-age poverty is almost irreversible. If you want to avoid old-age poverty in the future, you have to use a balanced labor market and employment policy to ensure that people also have the opportunity to build up good old-age insurance from their working life.

Income from work and the pension benefits generated from it are the basis for almost all old-age insurance. At the turn of the millennium, politicians decided to limit the benefits of the statutory pension insurance in order to keep the contributions stable. To this end, the old-age provision has been partially privatized and the individual responsibility has been transferred. This individual pension is offered by companies that are active in the international financial market. Private old-age provision has now turned out to be the wrong path. It just excludes the low-wage earners who cannot afford such protection. And it harbors financial risks, including negative returns.

We learn from our neighbors Austria and Switzerland

  • that the old-age security is only a real security for all people if it takes place within the framework of the pay-as-you-go system of the statutory pension insurance.
  • that it is possible to include all employed persons - employees and self-employed, salaried employees and civil servants - in the pay-as-you-go system of the statutory pension scheme and thereby keep the contribution amount at an acceptable level for everyone.
  • that it is possible to introduce a minimum pension and also a maximum pension and thus to organize social security as a real solidarity system.
  • that it is possible to provide additional support to female recipients (it is actually mainly women) of low pensions through (staggered) top-up payments from the state budget, so that old-age poverty is avoided.

We want to see it positively: Nobody has to live in poverty in old age, not with us anyway. We live in one of the richest countries in the world and would have the opportunity to distribute our prosperity in such a way that old people in particular are adequately cared for and protected against poverty.

Text:
Klaus Kittler Consultant Poverty / Unemployment Assistance - Department of District and Church District Diaconia, livelihood security