Raising retirement age could increase unemployment to 1 million


[vc_row][vc_column][vc_video link=”https://www.youtube.com/watch?v=FfWrTE7utvk”][vc_column_text]Why raising the retirement age will lead to higher unemployment? Will Belarusians flee to Russia in search of a better life? These and other questions were discussed by Uladzimir Kavalkin, project manager of “Price of Government.”

– Why was the retirement age raised three years rather than five? Was this figure motivated politically or economically?

– Three years is a compromise. If something goes wrong, the government reserves the moral right to raise the retirement age for another 2 years. That is, for women – 60 years and for men 65 years old.

– Will these measures allow to improve the situation in the economy and in the pension fund?

– Partly, they will. Now the pension fund receives about Br 2 trillion from the state budget to cover the deficit hole. The pension fund and social security fund do not have enough money for payments. Raising the retirement age on the one hand will contribute to business development, as there will become more labor, unemployment will rise and wages will fall. But on the other hand, this increase will not improve the lives of the average person and thus increase the pressure on the government. Authorities are at the same time solving the problems in the economy and creating social pressure, since there will be a huge number of people without means for existence, and they will require from the state some help.

– Could this trigger labor migration from Belarus?

– If you look at the dynamics of employed and laid-off workers in 2015, the number of jobs in the country decreased by 70,000. If we add to this figure those who cannot find work and cannot retire, you get about 270,000 work places that you need to create in order to employ these people. The government will not spend money on pensions, but rather on unemployment benefits.

Now the real unemployment rate is 8-10% of the working population (about 60% of the total population, or 500-600 thousand Belarusians approx. Belsat.eu). In the case of raising the retirement age to 60 and 65 years, we can expect unemployment to rise to 20%. There is a lot of young unemployed people. Half of Belarusians approaching retirement age cannot find a job. Some of the Belarusians of the age 30-45, who are in demand in Russia will leave.

 belsat.eu

TWITTER