Malaysia is once again engaged in an old debate: to raise or not to raise the retirement age from 60. It is 55-to-60-years-old all over again.
Like in 2013, there are people who favour it and people who don't. Begin with those who are for raising the retirement age to say, 63, 65 or even 70.
The Malaysian Coalition on Ageing, which halts at 63 for reasons best known to itself, advances its argument based on many senior citizens' depleted retirement savings. No employer — except the overly compassionate — will be convinced to retain retirees on such a basis.
On the contrary, they will be concerned about such retirees' skills at managing finances. To them, employees with financial worries may not be able to focus on their jobs.
Here is a more compelling argument to continue. Malaysians who are past 60, except for those who are infirm of mind and body, are a capable lot. They have six decades and more of skills cultivated from the seats of their schools, colleges and universities to be unleashed at work.
To let them go at 60 — remember, we are talking of the firm of mind and body — will be a loss to the employers, and by extension, to the nation.
And to the "early" retirees, too. Imagine a bank of skills being idled away at coffee shops and other hangouts. Malaysia mustn't choose to lose its talent like this.
Now for those who aren't in favour of raising the retirement age. Strangely, workers' unions are there. Instead of arguing to extend their members' retirement age, they want to end it at 60.
Even some employers are there together with the unions on this, though uncomfortably so.
They say the Malaysian economy isn't ready to absorb the "retirees" into the workforce. The economy never was ready in 2013, when the retirement age was increased to 60. In fact, there will never be a good time for the economy to be ready.
A more appropriate concern is the threat the increase in retirement age may pose to unemployed Malaysians, especially the youth. Granted, the youth unemployment rate is a whopping 10 per cent. But here, too, the unions and employers may be talking apples and oranges. Perhaps they give the economic theory of substitution a calculated miss.
We can't speak with the authority of Malaysian data, because there is none, but an analysis done by Rene Boheim of Johannes University in Austria and Thomas Nice of Humboldt University in Germany says young workers can't be easily substituted for older workers, as such substitution is governed by similarity in skills.
"Empirical evidence, however, suggests that even workers of similar skills who differ by as little as five years in age are already imperfect substitutes, suggesting that firms would have, at most, a limited ability to substitute young workers for older ones," the analysis points out.
The retirees come with skills, while the youths are new entrants to employment. They aren't after the same jobs.
The employment of retirees isn't a trade-off in the employment of the youths.
If any lesson is to be learned from the 2019 analysis, it is this: keeping older workers in the workforce longer not only doesn't harm the employment of younger workers, but might actually help both.