Because the pension is a ponzi scheme. Young people will be squeezed for every penny as the old population also controls the majority of votes. Politicians have known this for decades and done nothing serious to fix the problem.
They have always done something. They kicked the can down the road and blamed the previous people in power for the current siltation. Rinse and repeat.
They do. They vote to raise retirement age. Then the young people protest.
> Population is aging and paying for the retirement money for all existing retirees is already taking up over 25% of government spending. There’s barely money for anything else so taxes and social security payments are poised to go up while already being close to ~50% for most earners.
There are employer contributions in Germany that are recently counted in such calculations to prove a point, while leaving costs for "benefits" in US companies off the table when doing the comparison.
Some like to add the VAT to the "what life costs here", which is a 19% (except for necessities, which are at 7%).
If you refuse to accept such calculations that mix up tax brackets (popular error in that space), that immediately filters out 90% of them.
Social security-like systems require a growing population to sustain.
Labour productivity has gone up (As has labour participation, if you compare it to the 50s and 60s). It should more than counterbalance a demographic-caused dip in labour participation rates. Fewer people, working less, produce more today than they did 40 years ago.
We produce more for less work. Why can't that be turned into a lower labour participation rate, while maintaining the same quality of life, despite demographic shifts?
At the end of the day the contributors have to siphon off part of their earnings to give to the beneficiaries. Believe it or not, there is in fact many scenarios where the entitlements of the beneficiaries exceeds the input from the contributors. Just because we produce more per worker, does not mean we can support any arbitrary ratio of workers to retirees (who become more expensive over time).