Norwegian policies towards the 55 + group

Lecture held by the Norwegian Minister of Labour and Social Inclusion, Bjarne Håkon Hanssen, at the Federal Chancellor Willy Brandt Foundation, Berlin, 18 May 2006.

I often receive letters from unemployed people in their late fifties. They all complain that it is very difficult for them to get a new job and many feel discriminated.

As one of them writes: I am 58 years old and I have 20 years of experience within healthcare. I have applied for many jobs. But I never get an offer, not even an invitation to an interview. Some employers have told me they see me as being too old.

Such letters are valuable reminders that labour market policy is not just about statistics. Our mission is to help our elderly people get jobs. We can only do this by developing an effective senior policy for the good of society and the individual.

But first of all, a few facts. What is the current labour market situation for the 55 plus group in Norway? Firstly, unemployment in the 55 plus group is very low, less than 1 per cent. At the same time employment is high by international standards. 63 per cent of the 55-66 plus age group is employed. Norway is not aging as fast as many other European countries. The birth rate is still relatively high by European standards, 1.8 children per woman.

But we still have our problems and challenges. For example, there has been a rise in the use of health related benefits. Approximately a quarter of the working age population receive one or more benefits.  Most of them do not have jobs. They receive benefits due to illness or injury.

Even more worrying, there are a growing number of people leaving work through early retirement schemes from the age of 62. Although  relatively few in the 55 plus group become unemployed, those that do  tend to stay out of work much longer than younger people. In addition, there is a shortage of labour in many sectors.  We fear that this will increase in the future, both in private enterprises and in the health and caring sector.

What steps are we taking to deal with these challenges?

First of all, we are currently reforming the pension system.  The reform aims for a stronger correlation between the length of the career and pension benefits.  We want greater flexibility in regard to the age of retirement. But it must pay to put off retirement beyond the first opportunity. In other words, we have to create a new set of financial incentives. We are also studying possible changes in the disability pension, to discourage any further rise in the use of this benefit.

Secondly, we are cooperating with the social partners. We have a long and successful tradition of tripartite cooperation between the unions, employers and the Government. The social partners have committed themselves to spreading positive attitudes and information. They are also promoting a senior policy at the work places in cooperation with the Centre for Senior Policy, which is an important NGO think tank.   

The social partners and the Government have also committed themselves to focussing on preventive work and on systematic HSE activities in enterprises. The Tripartite Agreement on a more inclusive work place is an agreement based on the idea that the work place is the most important arena for creating a more inclusive work life. We therefore encourage dialogue between the employer and the employee.

Thirdly, we are establishing a new employment and welfare administration. This summer we are merging the two state welfare services. There will be a ‘one stop shop’ service consisting of the former Public Employment Service, the National Insurance Service, and the Municipal Social Assistance Offices.

Through this we hope to achieve better coordination of assistance and better access for the public. Users who are able to work will be transferred to active work-oriented processes at a much earlier stage than before. Better coordination opens the door for a more holistic approach. It will be the needs of the individual user that will decide what actions should be taken.

In conclusion, Norway, like the rest of Europe, is faced with many challenges due to an ageing society. I agree with the OECD. They recommend using a balanced approach to reforms  in an ageing society. This means on the one hand reform of the pension system, and on the other hand measures to encourage employers to keep elderly workers and to employ elderly job seekers.

Ladies and gentlemen, I am optimistic. There is a growing awareness of the need for adjustments and reforms. There is a growing awareness also of the need to encourage elderly workers to stay longer in work. We must strike a balance between the wish for more free time and early retirement, and the need for a labour force to build society, economic prosperity and welfare.

But institutional reforms and frameworks can never be enough. We need to change attitudes and thought worlds as well. Older workers need to be valued, to be appreciated, to be convinced that they should not retire, but ‘stay young at work!’

Thank you for your attention.