Young people "without a future" but also "without a pension". To raise the alarm is the National Youth Council who presented a Research created together with Eures on "Contributory situation and pension future of young people".
The message is clear: young people will be forced to work to old age, well over 70 years old, with no possibility of early releases, unlike previous generations. This situation arises from switch to a fully contributory pension system, combined with ever lower salaries (in 2021 young people under 25 earned only 40% of the overall average salary) and precarious and discontinuous careers, with fixed-term and atypical contracts now reaching almost 40% of the total.
In Italy, compared to the current retirement age, it will be need to work 9 more years, while in Denmark it will be 8,5 years, in Greece 4 years. The European Union average is 1,7 years, with France and Germany just below it (1,5 and 1,3 years respectively), while in countries such as Spain, Austria and Sweden there will be no difference between those born in 2000 and who was born 50 years earlier.
Retired over 70
The research conducted reveals that a young person who entered the world of work in 2020 at the age of 22 will achieve the retirement age at 71 years, a figure that is not only the highest among the main European countries but which will still lead modest pension benefits. This scenario is the result of the combined effect of discontinuous careers and low salaries, in a context in which pension benefits will be calculated exclusively on a contributory basis.
In detail, in 2021 young people under the age of 25 earned on average only 8.824 euros, corresponding to 40% of the average salary, while those between 25 and 34 earned an average of 78% of the average salary. At the same time, the percentage of fixed-term and atypical contracts has increased over ten years, reaching almost 40% of the total.
Under 35: retired at 74 with a check for 1500 euros
The projections for the employees under the age of 35 indicate that, if they continue to work until 2057, the training camp it will happen to almost 74 years (73,6), with a gross pension allowance of 1.577 euros per month (1.099 net of IRPEF). This amount is 3,1 times higher than the social allowance.
For the VAT registered workers, projecting up to 2057 and a withdrawal at 73,6 years, the pension allowance would be 1.650 euros gross per month (1.128 net of IRPEF), equal to 3,3 times the amount of the social allowance.
“An estimate – he explains Alessandro Fortuna, Councilor of the Presidency with responsibility for employment and social security policies – which highlights the serious distortion of the pension system, as currently defined, which not only projects income inequalities over time, renouncing any redistributive dimension, but is even punitive towards workers with lower incomes, forced to remain in the labor market (apart from the seniority of contributions) for three or even six years longer than their peers with higher incomes and greater job stability.
The effects of precarization
" increasing precariousness and job discontinuity, associated with low wages and lack of social guarantees, affects young people and women in particular, making their path to entry into the labor market, contractual stability and wage levels more difficult", said the president of the Cng, Maria Cristina Pisani.
“The demographic issue and the transition to the 'pure contribution' system further jeopardize the sustainability of our pension system. This trend forces citizens to work longer to receive less generous pensions than in previous generations,” Pisani underlined.
According to the Eures analysis, continues the president of the National Youth Council "the combination of job discontinuity and low wages for workers under 35 will determine a retirement from work only for old age, with pension amounts close to that of a social allowance. A situation that will be socially unsustainable”.
Pension expenditure in Italy reaches 17,6% of GDP, second in Europe
According to the latest Eurostat report, the pension expenditure in Italy in 2020 it represented the 17,6% of GDP, ranking as the second highest in the EU27 after Greece. This value is significantly higher than the EU27 average, which is 13,6%.
“Even the OECD estimates confirm the trend of increasing the retirement age which will increasingly lengthen the working life of young people”, adds Pisani. "For young people who entered the world of work in 2020 at the age of 22 in Italy, it is expected that they will only reach retirement age at 71, the highest figure among the main European countries".
Il purely contributory model it proves to be sustainable only within a labor market characterized by wage stability and growth.
“In the light of these data, as a National Youth Council – continues Fortuna – we continue once again to demand the introduction of a guarantee pension for young people which provides for tools to support and cover the contributions for the periods of training, discontinuity and wage fragility of young people.
To avoid the risk of poverty that threatens entire generations, it is necessary accompany interventions with structural changes ensuring stable and high-quality access to the labor market. These actions will also make it possible to restore sustainability to a pension model based on generational exchange.
Need for an open debate
The current situation is having a significant impact on the pension future of young people, and the transition towards a “contributory pure” pension system risks further jeopardizing the sustainability of the Italian pension system. President Pisani thus urged to have a more in-depth discussion on the issue that takes into account the needs of the younger generations.
“We need a more open and inclusive national debate on pensions. It is a question of intergenerational justice and the sustainability of our social system.”
