Trade unions will push for a fundamental rethinking of social protection financing at this week’s OECD Social Policy Ministerial Meeting in Paris, warning that simply raising retirement ages or cutting benefits would only worsen inequalities.
When Social Ministers gather for the meeting on Friday, they’ll face mounting pressures from demographic change and labour market transformations. Current demographic trends are dramatically transforming population structures across the OECD region. By 2065, there will be nearly twice as many people aged 65+ per 100 working-age people compared to today, while birth rates per woman have fallen well below the so-called “replacement rate” of 2.1 in most countries. These demographic shifts demand broader, better solutions than simply extending working lives. In a statement addressed to participants, TUAC provides several pathways to improve social protection financing.
"The demographic crisis facing OECD countries isn't just about numbers—it's about the kind of society we want to build. Rather than forcing workers to bear the burden through longer working lives and reduced benefits, we need a more equitable approach that includes taxing capital fairly, boosting employment, and focusing on job quality."
Among other things, trade union leaders will argue for a broadening of the current main resource base for social protection financing – labour income – including by more progressive taxation on capital and enhanced employment levels by improved labour market integration of disadvantaged groups. TUAC’s statement also demonstrates how the declining labour share has cost workers an estimated USD 2.4 trillion annually compared to if the labour income share had remained stable since 2004, creating substantial gaps in the financing of social protection. There is a broad range of policies that governments have at their disposal to fill these gaps, but raising the retirement age should not be one of them.
"Raising the retirement age for all workers is a fundamentally unfair way to enhance social protection financing. Rather than unilaterally raising retirement ages, we should focus on enabling voluntary longer working lives through better working conditions and opportunities for job mobility throughout working lives."
Supporting this approach, TUAC’s statement demonstrates how enhanced labour market and education policies can support better transitions, with examples including Sweden’s new transition and retraining support providing one year of study for workers. Such policies enable voluntary job mobility while supporting longer working lives through upskilling and reskilling.
Recent crises have underscored the importance of getting these reforms right. The statement outlines how the pandemic and ongoing cost-of-living challenges have demonstrated the vital importance of robust social protection systems. In fact, the recent crises would have been far worse, and inequality and poverty levels far higher, without income support systems such as sick pay, unemployment benefits and short-time work programmes. The trade union delegation will underline that while demographic changes do create real financing challenges, solutions must promote both sustainability and social justice.
TUAC will particularly stress the need to tackle rising precarious work and strengthen collective bargaining coverage. The statement warns that labour market flexibilisation not only jeopardises households’ income security but undermines the sustainability of contribution-based social protection systems.
The ministerial meeting presents a critical opportunity to chart a new course for social protection in OECD countries. Trade unions are clear that the path forward must combine expanded coverage with sustainable financing – not through cutting benefits or extending working lives, but through fair taxation, quality employment, and stronger collective bargaining rights.
For more information, see TUAC’s statement to the OECD Social Policy Ministerial Meeting.
Image credit: Marcel Crozet / ILO
