there is The proposal has potential implications for the country’s workforce, economy and society.
According to the Bureau of Statistics, in 2020 the labor force participation rate for individuals aged 55 to 64 was 67.5% and for individuals aged 25 to 54 it was 81.5%. By encouraging older workers to stay in the workforce, countries can increase overall labor force participation.
An improvement in the labor force participation rate leads to an improvement in economic productivity. A 1% increase in Malaysia’s labor force participation rate could boost per capita gross domestic product by 0.5%, according to a World Bank report. The report also notes that increased participation of women in the labor force could have significant benefits for the country’s economy and society.
Additionally, individuals who continue to work past the age of 60 have more years to save for retirement and can help build a bigger nest egg.
According to the 2020 Employee Provident Fund (EPF) survey, the average retirement savings for EPF members aged 54-59 was RM240,800 and the average retirement savings for those aged 60-69 was RM307,500. This suggests that individuals working over the age of 60 may be able to accumulate extra retirement savings.
Additionally, as more people remain in the workforce past age 60, the need for social welfare programs such as old-age pensions may decrease. This can reduce the burden on governments and taxpayers.
However, raising the retirement age also presents potential challenges. Older workers may face age discrimination in the workplace, making it difficult to find or retain employment.
In the context of raising the retirement age to 65, some employers may see older workers as less productive and capable than younger workers. This perception can lead to discriminatory practices, such as employers refusing to hire older workers or reducing career advancement opportunities.
Some employers may also be concerned about the higher costs of hiring older workers, such as health care and pension benefits. This may lead employers to choose to hire younger workers who are perceived to have lower hiring costs.
Additionally, age discrimination can also come in the form of harassment, where older workers can be the subject of comments and jokes about their age, or stereotyped that they can’t keep up with the pace of work. This can create a hostile work environment and make it difficult for older workers to be valued and respected for their work.
These forms of discrimination discriminate against older people, even if they are highly qualified and experienced, especially if they need to work longer to supplement their retirement income or want to stay in the workforce for other reasons. It can make it difficult for workers to find and retain employment. .
It is important that employers recognize the value older workers bring to the workplace and avoid discriminatory practices that may limit employment opportunities.
On the other hand, some older workers experience a range of common health issues, including physical and cognitive health issues as well as mental health issues that can make it difficult to continue working beyond the age of 60. There is a possibility. It can also lead to burnout and depression.
Conversely, older workers staying in the workforce longer and delaying retirement may reduce employment opportunities for younger workers. This can be a challenge for young workers entering the workforce or looking for new job opportunities.
Malaysia’s youth unemployment rate has increased in recent years, rising from 10.8% in 2019 to 13.8% in 2020 for those aged 15-24, according to data from the Bureau of Statistics. This marked a significant increase that could be partially attributed to the impact of the Covid-19 pandemic on the labor market.
The same concerns are reflected in a World Bank report highlighting Malaysia’s youth unemployment rate as a persistent challenge, with the youth unemployment rate standing at 10.9% in 2018. The report notes that this is higher than Malaysia’s overall unemployment rate, which was 3.3% in 2019.
Declining job prospects for young workers could lead to increased competition for job openings, lower wages and reduced benefits for these workers. This can have long-term effects on your financial stability and career prospects as you have to struggle to establish yourself in the workforce and advance your career.
Ultimately, any decision to raise the retirement age must be thoroughly considered based on the country’s economic needs and workforce, including worker well-being.
It is important to consider the impact on all sectors of society and ensure that appropriate policies and measures are in place to support workers of all ages.
Dr. Paul Anthony Mariadas and Dr. Uma Murthy Lecturer in Accounting and Finance, Taylors Business School, Taylors College of Business Law. Comment: letters@thesundaily.com
