The decision to raise Singapore's re-employment age from 65 to 67 will give an additional two years' lease of working life to healthy and productive employees when a new law comes into effect by 2017. There are sound economic reasons for this move. Employers should continue tapping experience while redesigning work to meet evolving needs. And workers ought to remain active in the workplace as long as health permits.
Rising standards of living, particularly in healthcare, are making people live longer and healthier and lead mentally more active lives than their predecessors. The recognition of this reality has inaugurated a fundamental change of mindsets in advanced economies, where ageing is seen less of a burden on society and more as an opportunity for countries to tap the mature energies of a significant segment of their populations.
Indeed, extending the retirement age makes sense precisely because the longer a person is at work, the lower the fiscal burden on the young who must support a greying demography. The Organisation for Economic Cooperation and Development minces no words in noting that, in a rapidly ageing era, policies, practices and attitudes that discourage work at an older age have "passed their sell-by date" and are costly for business, the economy and society. Outdated attitudes threaten living standards by placing pressure on the financing of social protection systems. Older workers stabilise the economics of ageing societies.
Thus, it makes eminent sense for a company to utilise the resilience and experience of seniors, instead of falling into the easy trap of believing that productivity cannot keep pace with wages that rise with age. In that vein, former Nominated Member of Parliament Kanwaljit Soin made an eloquent case recently for building "a society for all ages" by treating older workers as assets. She cited a study which argued that "age and experience beat youth and inexperience".
Creating economic opportunities for older workers not only gives them financial security but also expands a society's economic capacity by utilising its unused labour potential. Employers who write them off the employment map take a myopic view of economic possibilities. Singapore's measured approach to re-employment reflects the understanding that employers require time to readjust their practices. The two-year time-frame for the new law gives them more than enough time. Keeping older workers in employment acknowledges the demands of unions, while the need to ensure profitability accepts the very rationale of business.
The State, acting as an honest broker between labour and capital in a tripartite system, needs to intervene continuously and judiciously if some employers procrastinate because they have grown too comfortable with the status quo.