Uber Vacation Blues
A recent article caught this author's eye because it speaks to why the pension "problem" is likely to be with us for a long time.
The Associated Press reports that an official suggestion to cut back vacations in order to satisfy rising health care and pension costs has been soundly rejected by German workers. (See According to "Less Vacation? Germans Say 'Nein'", August 18, 2006). Apparently, Germans average twenty-four vacation days per year.
A related survey suggests that twenty-seven percent of more than 6,000 respondents take a vacation once a year while more than 1,400 persons claim to rest only once every two to five years.
Vacations provide a great way to recharge and return to work, refreshed, productive and happpy. However, five or six weeks of vacation is arguably generous by most standards and even more so, when funding gaps exist. (Of course, Americans are often accused of "living to work" versus "working to live" and there is certainly a lot to say about living a well-balanced life.)
The U.S. Social Security Administration reports less than ideal conditions.
Sluggish economic growth, high unemployment, and worsening demographics are burdening Germany's public pay-as-you-go pension system, which currently claims monthly government expenditures of about 15 billion Euros (US$19 billion). The Social Affairs Ministry estimates that the pension system will have a deficit this year of 1.5 billion Euros (US$1.9 billion). Continued economic performance next year could result in not only a benefit freeze but additional actions being taken to fill the funding gap that the government estimates will reach 3.5 billion Euros (US$4.5 billion) in 2006.
Without massive reform, there is no way around reduced benefits, higher taxes or both.
