- 6 months ago
- #considerthis
In recent weeks, a proposal by Minister Azalina Othman Said to raise Malaysia’s retirement age from 60 to 65 has reignited national debate. While the Prime Minister himself has called for a careful study of the idea, the backlash online was swift—with many Malaysians, voicing fears about youth career progression, delayed rest, and government motives. But behind the outrage lies a real policy dilemma: Malaysia is ageing rapidly, set to become an aged nation in fifteen years. What would raising the retirement age actually mean for Malaysian society, and how should such a policy be designed for fairness, dignity, and choice? On this episode of #ConsiderThis Melisa Idris speaks with Dr Amjad Rabi, Social Security Economist with Universiti Malaya’s Social Wellbeing Research Centre.
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00:00hi welcome back to consider this i'm melissa idris let's continue our discussion about the
00:15proposal to raise malaysia's retirement age from 60 to 65 and of course this has sparked fierce
00:24online backlash but joining me now to help us consider this issue with more nuance is dr amjad
00:31rabbi who's a social security economist with university malaya's social well-being research
00:36center i'm dead thank you so much for being on the show with me um a lot of the current discourse
00:41uh about raising the retirement age focuses a lot on kind of the government's fiscal sustainability
00:48always talks about it in terms of labor productivity for the economy but because you are a social and
00:54human security development economist i'm curious to know how you come at it what how do you look at it
01:01from a life course and longevity standpoint thank you very much melissa for having me and i'm glad
01:12that you started with this question because we tend to focus so much on as you mentioned on
01:17sustainability on productivity you know like the hard language but at the end of the day it is also
01:24psychological situation many people they they see themselves through what they do you know work
01:30define who we are who we are and when you retire at quite relatively young age because now 60 is you
01:37know you see people are very healthy and they can work for many years their cognitive abilities are still
01:43very sharp so it's actually it has psychological uh pressure on them when they all of a sudden
01:50they retire and they lose many people they feel they lose their sense of identity now i wanted to link
01:55it also to pressure on families as well and the argument is not either or it's not you know young people
02:03versus old people it's actually there is a sandwich generation under pressure and this is based on evidence
02:09we collected in social well-being research center now many as you know melissa we discussed this many
02:14times many malaysians they don't they even not in epf they don't contribute to saving and those who
02:22contribute to epf they reach the age of just right before the age of withdrawal at 55 with median uh
02:31median saving is about 44 000 ringgit 44 000 and you would imagine you know how how much it will last
02:39and you would also link it to increased in life expectancy when epf started in back in 1950s
02:47life expectancy was around that number around the 55. now if you reach the age 55 if you reach the age
02:5455 you are expected to live another 24 years and does the 40 000 44 000 ringgit can last no we know that
03:05so what they do people uh in that age what they uh they they you know they and we have evidence that they
03:13use the money takes them to up to 60 by 65 only five percent they have epf saving well then they go to
03:21their children the adult children on average melissa the other children uh they have on average uh or
03:30people above the age 60 on average receive 526 ringgit a month from their adult children here one senior
03:39citizen so two senior citizens will be 1000 so 526. it's not a small amount of money for many wage earner in
03:46malaysia it's actually the me one one-fifth of the median income for that year imagine goes to your
03:53old folks now you are sandwiched because you have your own children to take care and take care of
04:01so it's actually this old age uh or young or the age of retirement at 60 it puts it pressure on the
04:09sandwich generation that they need to fill up the gap that their parents did not accumulate enough saving
04:15so it's not really only sustainability but it's pressure on families right i mean that's a good
04:21point and i think that um we should probably look at how uh raising the retirement retirement age affects
04:31intergenerational relationship right it helped me think that this through because in many malaysian
04:36families older adults take on caregiving roles as well vital caregiving roles like looking after
04:42grandchildren looking after those with um you know dependents uh family members how might raising the
04:50retirement age also affect the intergenerational uh caregiving patterns kind of gender roles family
04:58well-being in general because as you said while it does alleviate some of the pressure of um the sandwiched
05:05generation there's also this kind of um implicit contract of caregiving duties post-retirement how
05:12do we think that through amjan that's very good point and i i think it also has gender dimension usually
05:19the ones they are involved in the you know like providing whether it's daycare for their grandchildren
05:25or support to somebody with disability or health need usually women and if you would think about women
05:31participation rate in the labor market for that asia group let's say the age 55 or 60 to 64 let's say
05:40since we talk about increasing the age of retirement it's actually 20 percent so it's quite uh uh or read
05:47you know it's low uh for the asia group we're talking about so in any case they're not in the labor market
05:54and and they uh it's also before that they are low participation late in the labor market among them
06:01so it's in in in one hand it's already the exiting the labor market which is not good and likely most
06:08likely it has to do with also like providing family care and support to those in need now for men and
06:16it's also again coming back to the age of retirement we talking about only the formal sector that will be
06:24impacted right so because this is like who will be impacted by the retirement because majority actually
06:3149 percent of male uh in the in age group 60 to 64 already in the labor market they're not retiring and
06:39this is half so half of half of the 49 percent does some data they still participate in the labor market so
06:46this discussion about increasing the age of retirement does not affect half of the population because they
06:52already work until 65 so the male uh and the female likely already are because of family responsibility
07:01we will see some adjustments so obviously uh um yeah i mean there wouldn't be one answer that
07:08winner losers you know it's actually there is you know there are many shades to the uh to the
07:15color for this one no i mean that's a very important point to remember that the conversation
07:21that the public discourse about raising the retirement age excludes half of the kind of working
07:28population in the informal sector but if we were to look at this in terms of the fact that
07:34the structure of retirement must must soon evolve to match longer healthier lifespans
07:42what principles do you think ought to guide Malaysia's reform in this space very important to do it in
07:49face approach this is very very important you know like you don't want to shock the system in any way
07:55you know five years increase all of a sudden that's i don't think it's what i think to do we just like
08:00maybe one year every three years that makes sense so over you know let's take 15 years to achieve this
08:06and later on we create auto mechanism that links it to uh to increase in life expectancy but at least
08:14over 15 years maybe new entrance to the labor market right away you don't promise them because they're
08:19young you know you don't promise them to retire at 60 but rather you say you know you entering at age
08:2520 to the labor market you expect to work until 65. now the existing members i i would
08:30say one year every three years second principle i very much wanted to highlight this
08:36is not with us not for us and what i mean by this this has to be inclusive dialogue i'm happy actually
08:44to see this uh uh discussion online offline people talk about it this is healthy discussion
08:51you know many people would disagree with me that's fine you know or agree with me or we need this
08:56healthy discussion to arrive at um you know the consensus or the optimal level of uh of uh you
09:03know like policy formulation and that requires to include representatives from the unions both employer
09:10employees what we call it the tripartite discussion where the government can you know facilitate this
09:16discussion we should trust people to make the good judgment you know and let let you know let people
09:22decide and i i guarantee you once we have the information the discussion will arrive at the
09:29optimal policy mix can i ask you for the skeptics out there who um who had a maybe more of a knee-jerk
09:38reaction to this proposal and may not be um for raising the retirement age what would you like them to
09:47consider what would you like what message would you like to leave them with in terms of how to think
09:53this through in a more nuanced way you know like if you look at the 100 bill what's written on it in
09:59god we trust i should add another point to it everyone else needs to show us evidence you know we need to
10:05have evidence right and the reason the main objection to increasing the age of retirement is based on
10:12assumptions first assumption is youth unemployment and this is we really need to look at other evidence
10:19let me clarify there is indeed in 2017 international labor office they published uh work that there is
10:28they might be you know like can slow job transition for youth people but in public sector or in very
10:37rigid labor market but public sector in malaysia is about 10 percent of the labor force so it's not
10:45that big this 90 percent is not public sector the other evidence to say that yeah it can cause some
10:51youth uh slow down in youth employment is in spain and that was 2008 hiring but 2008 to 2013
11:01and at that time it was the peak of the financial crisis youth unemployment reached 60 percent of
11:09course that time you know that's the you know that's not a difficult time but the majority of evidence
11:14that you know many many economists they say there is not fixed amount of jobs if the economy is growing
11:21like what we see in malaysia and you have a flexible labor market like in malaysia there is no evidence i
11:28mean i can list so many studies but the second point related to youth unemployment we really need
11:34to be driven by number if you look at youth unemployment do some data the youth unemployment the age
11:40the highest is the age 15 to 19. this is the age 15 to 19 it goes to especially male it goes to 19
11:51and this is the group usually they don't work in the public sector this is the group
11:55melissa that are with uh lower educational attainment but if you look at the group so
12:02those they will work in the informal sector and likely they will not be affected by the increase
12:07of age of retirement because of low educational attainment it means it most likely correlated with
12:12the informal sector but if you look at the other group 25 to 29 usually those they finish bachelor degree
12:19they look for employment it's actually unemployment rate among this group among males since i compared
12:25with males about two to three percent unemployment which is very low so the youth unemployment concentrated
12:31in 15 to 19 the ones with lack of uh so it's again like i don't see i don't see that that argument
12:38having said that we need to have this discussion it's it's very important everyone to put forward their
12:43insights their criticism and you know we should be able to answer and discuss and learn yeah amjad
12:51thank you so much for speaking with me today i appreciate your time dr amjad rabbi there from um's
12:56social well-being research center wrapping up this episode of consider this i'm melissa idris signing
13:01out for the evening thank you so much for watching good night
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