[lp4v4n]

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions.

For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europe's economic future, they're always dismissive about the problems Europe faces. They're stuck in the 70's, 80's or 90's it seems.

[jraph]

IMHO, we do want retirement (it is essential that past a certain age, you are not forced to work anymore - at least because you are too tired to work, at best so you can enjoy life full time as you see fit - retired people also babysit and run a lot of important stuff thanks to their free time, so they still work but outside wage labor in a way - so much so that many things would break if they didn't).

This being established, retired people obviously need money to live. You have basically two existing systems for this:

1. You make the working class pay for currently retired people

2. You make each people put money aside for later

The first choice is a collective solution to a collective problem, and also provides guarantees.

The second choice is liable to economical crises, mistakes and is an individualistic solution to a collective problem. The risk is having people who don't have any money and who are forced to work at the end of their life (if they can still find a position and are still healthy enough for this).

Of course, 1 is not perfect: there are laws defining the minimum amount of work you need to do in your like to have a good pension. If you don't work "enough" in your life, no good retirement for you. But that's a problem both options have.

It's unclear what benefit that second solution brings to the table, in both cases there's some amount of money that needs to be set aside for stuff to work. Only, in the first solution, that's safely managed for you, you pretty much don't have to worry about it.

Pensions don't seem that fat as well.

As someone currently working, I'll take the "Europe pays the pensions" aka "We, the working class, pay the pensions", aka the first option, any day. I'm happy to pay for the retirement of my retired fellows.

I would worry more about the ultra-riches stealing money from everyone and digging the inequality gap.

[barrkel]

The second mode is another way of doing the first, actually.

Either way, working people's output today needs to support the non-working people today (unless you let them starve). Whether that is done via taxation or via wealth accumulation, one way or another, more and more young people will be supporting old people.

And it's not even clear the wealth accumulation angle is good. It requires young people to own a lower amount of wealth so that old people can dangle it in from of them to keep them supported.

[jraph]

> The second mode is another way of doing the first, actually.

The two major differences are that in the first, no money is stored, has to undergo inflation or risk disappearing. It's also not your individual money coming back to you.

I agree with the rest.

[nec4b]

Why would you limit yourself to only those two options? E.g. You could also have a collective system of pension funds where money you pay for your future pension would accumulate (invest) instead of pay as you go system, where the money is immediately spend by the state.

[jraph]

I'm sure there are plenty other options, those are the ones I know exist (there are variants).

I'm not sure what benefits your proposal brings.

Whenever you have an amount of money you don't spend immediately, you have to worry about inflation and investing (that's also of course true for the second option)

And the first option force pensions to be in the country's annual budget. For the better and the worse.

[patrickmcnamara]

I don't know why everyone is being so dismissive. Pensions in Europe nowadays are just transfers from young and poor to older and wealthier. The average French pensioner (not working) has a higher income than the average French worker (working).

[jraph]

> The average French pensioner (not working) has a higher income than the average French worker (working).

That doesn't seem true. End of 2023 the mean retired net income in France seems to be 1 541 € [1] while the mean net salary of a worker is between 1 940 € and 4 630 € depending on whether the person works in the public sector and depending on the class.

> I don't know why everyone is being so dismissive

Because that's mostly unsubstantiated random feeling that has implications that look quite bad. What do you want, when you stress that retired people earn too much (which seems mostly wrong, as we just saw), blaming this as major¹ cause of a European decline? Do you wish we would just stop providing income to the retired people?

¹ because if it's not a major cause, why even mention it?

[1] https://drees.solidarites-sante.gouv.fr/publications-communi...

[2] https://www.insee.fr/fr/statistiques/7457170

[patrickmcnamara]

https://www.ft.com/content/d419bd2d-a6ba-44a5-a93a-1276f3e5d...

This is the article I was thinking of. I don't think we can pretend that pensions are not a problem, and not a massive strain on government budgets. Incomes of pensioners have increased a lot more than incomes of working-age people, and French over 65 earn more than French working-age (slightly different claim than I made).

> What do you want, when you stress that retired people earn too much

I want to pay less into unsustainable pension system and to be able to save for my own future instead. I would love more of Europe to get a system similar to Australia's superannuation system.

[jraph]

> I don't think we can pretend that pensions are not a problem, and not a massive strain on government budgets

Indeed we can't. Now, you have to prove that the alternatives wouldn't be worse. And you have to prove that they are unsustainable as is.

> I want to [...] be able to save for my own future instead.

No thanks. But I suspect our disagreement here comes from having very different perspectives.

[hnmullany]

You might want to look up the value of those "fat pensions" - a lot of them are substantially less than US Social Security.

e.g. in Ireland, the state contributory pension (aka what you paid egregious social security taxes for) maxes out at about $18,000 per year. The equivalent pension from US Social Security is about $45,000.

[shevy-java]

This depends on the country. Austria is doing quite well here.

Why are there so many homeless people in the USA? If your assumption were to work, it would not be the case. You are simply making an incomplete analysis here.

See: https://www.forbes.com/sites/andrewbiggs/2019/03/15/u-s-reti...

It is from 2019, but things are still somewhat similar today.

[littlexsparkee]

5 European countries have higher homelessness rates than the US, total EU numbers also dwarf the US (1.3m vs 750k)

https://ourworldindata.org/data-insights/how-common-is-homel...

https://www.notus.org/us-news/homeless-report-hud-president-...

https://www.dw.com/en/eu-sees-rise-in-homelessness-amid-hous...

[frm88]

900 k for the EU: https://de.euronews.com/my-europe/2023/09/05/bericht-fast-90...

You third link uses different metrics than the other two.

[bob001]

> Why are there so many homeless people in the USA? If your assumption were to work, it would not be the case.

Are you somehow assuming homeless people are all old retired people eligible for pensions? I literally cannot follow your logic here in any way no matter how much I try.

[DrBazza]

I'm not sure what this obsession is at the moment with 'fat pensions'. Pensions are far from 'fat', and (european) governments have been very dishonest about what will happen state pensions for decades. Governments simply don't have the nerve or honesty to tell the population what's going to happen and get the message across to everyone. And at the same time, youth unemployment is really high. So what do you want, old people to retire 'early' to make way for young people to work, thus requiring a 'fat pension', or do you want them to never retire, and thus not need a 'fat pension'?

Europe's problems can be summed up by Hanlon's razor: Never attribute to malice that which is adequately explained by stupidity.

Which is the next part:

> The older people I talk to show no concern about Europe's economic future, they're always dismissive about the problems Europe faces. They're stuck in the 70's, 80's or 90's it seems.

As an 'older' person in the UK, I've always been 'concerned' about the economic future of the continent, but we've elected increasingly incompetent politicians. When you get older you'll have the same opinions. Politics has gone from being a job trying to manage the country, to being an all expenses paid job with little risk other than re-election, and little responsibility because everything is 'the EU', or a quango (quasi-governmental organization - basically still the Government but not really sackable either).

Consider the UK - ARM was 'ours'. Could you imagine the US allowing it to be sold off to a foreign country? Well, you can guess what ukgov did.

Sabre Engines wanted a tiny amount of Government funding, who said no, so they closed and sold off some incredibly useful tech.

Maggie Thatcher sold off, and perhaps had to sell off, public utilities such as water, with little extra thought as to 'what happens next'. Well, that's 'gets bought out by foreign companies and channels profit abroad instead of reinvesting'.

Then there's the very European union-centric industries that often shoot themselves in the foot and ruin entire industries (UK car manufacturing spent more time on strike in the 1970s than building cars and can you guess what happened).

[ismailmaj]

I can talk about France specifically, the working age population feels squeezed currently because a big portion of their wages goes to pay pensions, let's be specific:

for a 100k paid by your employer, 46k goes to you after all taxes, 45k goes to social contribution, of those 20k specifically to paying current pensioners[1].

It doesn't look so bad, unless you take into account the inversion of the demographic pyramid, the workers will get progressively more squeezed as older folks enter retirement, and are unlikely to get themselves good retirement given that there isn't enough kids to support them when they will be old.

And so, the rational move is to save more to fund your retirement while already getting pressured by relatively low wages and low saving potential due to the taxes, and France doesn't really have a growth lever to pull to get us out of this situation as we're already at a very high debt-to-GDP ratio.

So that's why some workers are unhappy with what they call "fat pensions", what also doesn't help in France is that the country is very centralized around Paris and rent is now another channel where money flows from workers to (often) pensioners.

As 2027 elections approaches, it seems we have the options of being even more fiscally irresponsible (the extremes), and the center seems to lean for austerity measures (Edouard Philippe) and none of these are making me optimistic about the future.

[1]: https://code.travail.gouv.fr/outils/simulateur-embauche

[bildung]

> I'm not sure what this obsession is at the moment with 'fat pensions'.

Pretty sure it's a concerted effort to force the EU countries to adopt private/financialized pension schemes and abandon the still dominant socialized model. The huge new inflow into the financial markets would make some people very very rich, and conveniently would also transform low pensions from a societal problem into a problem of bad personal foresight instead.

(Not accusing GP in particular, they probably just picked it up in the media)

[pjc50]

Now wondering: is the US "richer" because its pensioners are "poorer"? Because that doesn't quite seem to be the case. I'm not familiar with US pensions discourse. I suspect if you count Medicare (14% of Federal spending, 3% of GDP) as a type of "pension" the situation looks different.

[surgical_fire]

Which country exactly has "fat" retirement payments in Europe?

I do have a private pension, and the country where I live a retirement payment can barely pay for a room in a shared apartment in the capital city. Not exactly what I call fat.