If the trends of aging population and declining birth rates cannot be reversed, it will be difficult for future retirees from the 1980s and 1990s to enjoy the same annual increase in retirement pensions as current retirees.
It is precisely in this context that delaying retirement has become an increasingly viable solution to address the shortfall in pension funds. However, the key prerequisite for delaying retirement is that the job market can provide an adequate number of employment opportunities. This ensures that older individuals can continue to occupy job positions while younger people also have employment opportunities. Otherwise, if a large number of young people are unable to find employment, it will instead create a greater impact.
Currently, the employment market situation seems to be increasingly severe, with the youth unemployment rate reaching a historical high of 20.4%, and even major internet companies conducting large-scale layoffs. If a significant number of elderly individuals delay retirement in the future, employment opportunities in the market will become even scarcer. The pressure on the job market adds more uncertainty to the option of delaying retirement. Should more retirement benefits be provided to older individuals? Or should more employment opportunities be offered to younger people? There doesn’t seem to be a perfect answer to this dilemma.
According to a report from the Office of the National Working Commission on Aging, it is projected that by around 2035, the proportion of elderly people in China’s total population will exceed one-fourth, and by around 2050, it will exceed one-third. With the increasing proportion of elderly individuals, retirement pensions not only affect people’s livelihoods but also have an impact on the economy. If the proportion of elderly people in the national population exceeds 30%, it means that the importance of the silver economy for Chinese consumption is growing. If a large number of retirees receive decreasing pension amounts, it also implies a decline in the purchasing power of one-third of the population.
As China’s elderly population continues to grow in the future, both from the perspective of people’s livelihoods and the economy, it is necessary for retirement pensions to continue to increase. This would not only ensure a more dignified life for retirees but also contribute to some extent to economic growth, although achieving this is not easy.