General idea
This last week we have learned about the proposal of the social security minister to delay the retirement age and reward those who apply for it later.
This proposal comes in order to reduce our public deficit (which is currently running out of control) and in view of the huge problem of pensions in our country.
What is happening?
Most of you will know that we are at a point where pensions are becoming unviable, as there is more expenditure than income in the social security system, and this is precisely the reason for Escrivá’s proposal, to achieve a greater number of people contributing and reduce the number of people receiving pensions.
In response to these statements, Yolanda Díaz (Minister of Labour) criticised the proposal, claiming that if older people belong longer in the labour market, it will reduce the opportunities for many young people who could be occupying these positions.
However, in this post we would like to explain why Yolanda Díaz’s statements are not at all accurate, and that is that the flaw lies in the fact that our labour market is not a game where there is a specific number of squares to occupy, but quite the opposite.
An increase in the number of people in work generates its own demand, increases GDP and creates new jobs. Why? Some of you may ask.
The worker is not only a provider of services, but also demands goods and, in turn, services. If this provider had no income, he would spend less and therefore demand less.
If you will allow me, let us repeat again. These jobs produce an increase in GDP and an increase in offers related to the services demanded by these suppliers, offers in this case demanded by young people.
Conclusion:
Therefore, the more people work, the more demand, and in this case the jobs are complementary, not substitutes, since, in addition, there are functions performed by senior workers that cannot yet be filled by young people (due to lack of professional experience or other reasons).
