Traditional socialists it seems would prefer that the elderly not work for longer. They should should leave the work-place, sit-out their days in an old-age home and die out quietly without making too much fuss. “Self-employed” has always been a dirty word in the socialist lexicon and the new Swedish government is training its sights especially on the elderly self-employed.
As it is, the age discrimination that is endemic in Sweden makes it virtually impossible for the elderly (>65 years old) to get employment. About the only real possibility for the elderly to work is to employ themselves and to be self-employed. The new government in Sweden wants to make it even harder for the elderly to be employed (by others) and to milk them for extra taxes when they do. The special payroll tax is to be increased by 8.5%. Employers must pay the extra and if the elderly are self-employed then they will have to pay the extra themselves. When the discrimination is built into the tax code then it must count as institutionalised age-discrimination.
It seems such a waste of experience and knowledge. The evidence shows, and common sense says, that it is not the elderly who take jobs away from the young. The elderly – when they are employed – are usually employed for the depth of their experience which is not an area of competition with the young. The previous government had managed to increase the employment of the over-65s by 1.5 percentage points. But the new government clearly wants to change that.
Of course the key point is that when over-65s lose their jobs, they do not – statistically – swell the ranks of the unemployed. And the new socialist government wants to milk whatever taxes it can from the elderly – especially if they are self-employed.
But in the long term the demographics dictate that with increasing longevity, society will have to encourage that people remain gainfully employed – on average – much beyond the age of 65. By 2050, this will need to be at least 70 years. The left will have to lose their antipathy for the elderly.
From Swedish Radio:
The red-green government is making it more expensive to hire seniors. From next year, the fee paid by employers for workers over 65 will be raised. Finance Minister Magdalena Andersson says that the government needs the money.
The government wants to increase national revenues by 18 billion kronor next year. More than two billion will come from the increase in the fee paid by the employer to employ people over 65 years, the so-called special payroll tax.
It thus becomes more expensive for firms to hire the over-65s from 1st January 2015.
The previous Alliance government had lowered the special payroll tax in 2007, and given the over-65s higher earned income tax credit. This resulted in more over-65s working according to a study by the Institute for Labour Market Policy Evaluation, IFAU.
“These reforms led to an increase in employment by 1.5 percentage points”. says researcher Lisa Laun at IFAU. The study could not determine what impacedt employment most; the lower payroll tax or the higher tax credit. But both reforms together gave more jobs for the over-65s.
Lars Calmfors is a Swedish economist and Professor of international economics at the Institute for International Economic Studies at Stockholm University. He spoke to Swedish TV:
“It does not seem wise, if one wants to get older people to stay and work. We know that we have large departures in many professions, not least in health care and the teaching profession. One is keen to keep people at work here so the measure is probably ill advised”. So said Professor Lars Calmfors after the government proposed that the payroll tax for the elderly over 65 years will increase by 8.5 percent from the year-end. It is a tax paid by the employer for each employee. The self-employed must pay the tax themselves.
Lars Calmfors sees two reasons why the payroll tax is now being raised for the elderly; first that the government needs more tax revenue, and second, that the government might think that fewer older people will take away jobs from the young – something that is not at all supported by research.
“There’s very little support for the theory that higher employment of the elderly leads to lower employment among young people. Most indications are that in countries that have high levels of employment for the elderly there are also high levels of employment for young people. They don’t seem to compete against each other” said Lars Calmfors to SVT.
Tags: Age discrimination, over-65s, payroll tax, red/green government, socialists
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