There is a normative inconsistency between minimum wage and pension policies everywhere. Public pay as you go pension systems are paternalistic nonsense. They should be scrapped.
The role of the state is not to provide everything. It is to provide a minimum of conditions for people to live, learn, and make their own choices.
This brings us to the minimum wage. Society agrees on a minimum wage. This should ensure a minimum subsistence level for a working adult. Above that, the state does not regulate wages (although it regulates the labor market it stops short of fixing wages or wage scales).
Logically, the pension system should follow the same reasoning. Everyone should get the same from the state. And, here is the cherry, indexed to the minimum wage. Say, 80% of the minimum wage. At retirement. After that, it is up to the individual to save for his retirement, without any participation from the state.
Lets be clear. Politicians get it. The president gets it. Company bosses get it. Toilet cleaners get it. The unemployed get it. All 100% transparent. Payd for from general taxation. Pay as you go. Noone gets one cent more.
The beauties of it: 1) it is universal and completely igualitarian, so the left cannot object. 2) it is absolutely transparent and simple, and keeps government to a minimum, so the right cannot object. 3) it is linked to the population tendencies in a way a child can understand. 4) it is indexed to the minimum wage so that when politicians want to touch pensions they must touch the minimum wage, and when they touch the minimum wage they must touch pensions. Brings everyone down to their senses. 5) it ensures the fundamental role of the state. to guarantee a minimum to all citizens, without favor. 6) because it is simple and transparent, it is much less vulnerable (or completely immune) to political manipulation.
What are you likely to hear in response to such a proposal? That it is not acceptable for the president to get the minimum wage! Of course, this means he/she has not saved another penny during his/her life but why bother with details?
Public pension systems have been used for political purposes creating huge intergenerational injustices and creating financially unsustainable monsters.
It is time we stopped them.
