Globe, Latin America, United Kingdom

Cuts would impact pensioners

Uruguay is one of the most aged countries in Latin America, as, according to figures from 2018, one in every five people is 60 years old or older, which indicates a growing dependence on the economically active population.

 

Hugo Rius

 

This South American country experienced an early demographic transition in the middle of the 20th century, characterised by fertility rates of around three children per woman. However, between 2015 and 2020, it reduced to 1.98.

Five years before that, in 2010, life expectancy at birth was 77 years.

A United Nations report in 2017 suggested that the aging demographic recorded in Uruguay between 1975 and 2011 with a percentage increase up to the current 19.1%, is unprecedented in the region as it presents values that the most developed regions in the world present.

The growth rate of elderly people in the final intervening period (2004-2011) rose to 0.93, a value considerably higher than that corresponding to the total population.

Experts on the phenomenon warned that in the most prosperous areas of the world, the population is decreasing. And in Uruguay, without being part of that advanced line of world economy, it stagnates and decreases.

In 1950, in Uruguay, there were 8 working-age people (WAP) for each person aged 65 or more. Five decades later it was 5 to 1. And in 30 years, it is projected that there will be slightly less than 3 to 1. For the second half of this century, it is forecast that this ratio will continue falling.

When evaluating these prospects, the former president of the Banco de Previsión Social (Social Insurance Bank) and expert in social security, Rodolfo Saldain, commented that exclusively basing retirements on transfers from active generations is impossible in the new demographic reality, without compromising the principle of justice between generations.

Furthermore, retirees, as well as finding themselves with diminished purchasing power, may be the only ones bringing a fixed contribution into unemployed households in times of economic crisis.

The perceived outlook for the elderly is not attractive.

This is how it is considered by members of parliament from the government opposition party, Frente Amplio, and the union movement, who have denounced the governmental project for the five-year budget to cut the fiscal deficit, as it will be at the expense of reducing workers’ real salaries.

The well-known Uruguayan economist, Joaquin Toledo, warned that the project presented emphasises reducing the fiscal deficit to half, from 4.8 of the GDP in 2019 to 2.5 in 2024, and that “it will be financed by reducing wages and pensions”. The PIT-CNT Union Confederation and other sectoral protest movements have protested against the budget cuts that threaten jobs and the purchasing power of precarious wages and of retirees and pensioners.

The first ones to suffer from the cuts will be the most vulnerable social segments, among those are elderly Uruguayans, retirees, pensioners and family dependents. (PL)

(Translated by Donna Davison – Email: donna_davison@hotmail.com) – Photos: Pixabay

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