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Washington wants you to work longer

It's Labor Day, so I'm spending the day doing rather less labor. But my Sunday column fits the theme of the day nicely.

Raising the Social Security retirement age has become as close to a consensus position as exists in American politics. House Minority Leader John A. Boehner (R-Ohio) supports it. House Majority Leader Steny H. Hoyer (D-Md.) has said that "we could and should consider a higher retirement age." And for a while, I agreed with them, too. It seemed obvious: People live longer today, and so they should work later into life. But as I've looked at the issue, I've decided that I was wrong. So let me be the skunk at the party. We should leave the retirement age alone. In fact, we should leave Social Security alone -- unless we're making it more, rather than less, generous.

Start with the basic rationale for raising the retirement age. As Rep. Paul D. Ryan (R-Wis.) has argued, when Social Security was signed into law, the retirement age was 65 and life expectancy was 63. "The numbers added up pretty well back then," he said on Fox News. But that's misleading. That figure was driven by high infant mortality. If you were a white male who'd made it to age 60 in 1935, you could expect 15 more years going forward. If you're a white male who lives to 60 today, you can expect 20 more years going forward.

Moreover, those averages conceal a lot of inequality. In 1972, a 60-year-old male worker who made less than the median income had a life expectancy of 78 years. By 2001, he had gained two years. Meanwhile, workers in the top half of the income distribution had gained six more years. Insofar as the argument for raising the retirement age is that "Social Security beneficiaries live a lot longer today than they did in 1935," it should be restated as: "Social Security beneficiaries tend to live somewhat longer today than they did in 1935, and that's much more true of rich beneficiaries than poor beneficiaries."

And so what? Lurking beneath this conversation is an unquestioned assumption: We live longer, so we should work longer. That's pretty intuitive to members of Congress, who seem to like their jobs and don't seem to like the idea of retiring. It's also pretty intuitive to blogger/columnists, who spend their time in air-conditioned rooms opining about pension programs. But most people don't work in Congress or in the media. They work on their feet. They strain their backs. They're bored silly at the end of the day. By the time they're in their 60s, they want to retire.

You see that reflected in Social Security. Age 66 is when you get full benefits. But most people begin taking Social Security at age 62. They get less, but they can retire earlier. To them, the trade-off is worth it. And remember, the country is much richer than it was in 1935. Adjusting for inflation, our gross domestic product in 1935 was $865 billion. In 2009, it was more than $12 trillion. We have more than enough money to buy ourselves some leisure time at the end of our lives. At least if that's one of our priorities.

Polling suggests that it is. An August survey from Greenberg Quinlan Rosner Research tested reactions to a variety of Social Security fixes. One of the options was raising the retirement age to 70. Two-thirds of respondents opposed it. Another option was eliminating the cap on payroll taxes so that well-off workers pay the tax on their full income, just as middle-income workers do now. A solid 61 percent supported it.

That's almost the reverse of the conversation in Washington, where affluent people who like their jobs propose cutting benefits for the poor (which is, after all, what raising the retirement age would do) rather than lowering benefits or increasing the payroll tax on, well, themselves.

Read the rest...

By Ezra Klein  |  September 6, 2010; 1:52 PM ET
Categories:  Articles , Social Security  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Reconciliation
Next: What wastes money in stimulus?


It's not a social security 'fix'. It has to be an 'adjustment' or 'change'.

'Fix' implies something's broken, and perpetuates the Republicans' narrative.

Posted by: hutchie6 | September 6, 2010 2:44 PM | Report abuse

I'm sort of in-between on this. The concept that we have of "retirement" is flawed: one day you're working full time, then the next you never work at all again.

It would much better to formalize a "ramp down" of work over time, rather than letting important experience just disappear.

Posted by: yerfdogyrag | September 6, 2010 2:50 PM | Report abuse

And here's another thing I'm dead set against: raising Social Security taxes to increase the size of the Trust Fund. We did that in the 1980s and it seemed a good idea at the time. And over the past few years we've heard from (mostly Republican) politicians that the Trust Fund is meaningless and that that money is just, poof, gone. Apparently we raised taxes on working people in order to mask the deficit and pay for tax cuts for rich people and bigger defense budgets.

Well, OK, fooled us once, but ain't gonna happen again. When Social Security revenues fall short of current needed revenue, *that's* when we can consider options like raising the Social Security tax among other possibilities, like raising income tax revenue to pay for it. But I will never again trust a fix that depends on increasing the size of the Trust Fund.

Posted by: robbins2 | September 6, 2010 5:44 PM | Report abuse

Government of the rich, by the rich, and for the rich.

Posted by: AZProgressive | September 6, 2010 6:08 PM | Report abuse

Another point that's overlooked when discussing raising the retirement age is the prevalence of age discrimination in the job market. If you get laid off at age 60, good luck on finding a new job. Just how are people supposed to support themselves, with no health care benefits, until they reach age 67? When do you ever hear of the federal government bringing an action against an employer for age discrimination? And yet they are expecting us to work longer. Ezra seems to think that workers are opting to take Social Security at age 62, with reduced benefits, because they're tired of working. The real reason is that they have no income.

Posted by: davidleetodd | September 6, 2010 6:33 PM | Report abuse

Ezra, since you hang out at the Washington Post now, you might want to take a look around and ask yourself how many 70 year olds are working full time there? It's a mostly non-physical job in air-conditioned spaces and 70 year olds can easily handle the work. Not everyone would want to take the retirement pay cut or can think of ways to fill their days without work, so where are the 70 year olds? The economy is not very good at producing good work for 70 year olds, even if they have skills to offer. I assume like many places, the post has had buyouts for a while, so did those older people who took the buy out land on their feet or did they take a significant pay cut in the after-post-life.

Posted by: windshouter | September 6, 2010 6:36 PM | Report abuse

Try getting a job when your over 55. They say you cant discriminate based on age. But employers will never admit thats why they didnt hire you.

Posted by: jimbobkalina | September 6, 2010 8:41 PM | Report abuse

Once I turned 50, I became convinced that the "brains" who want us all to work until we're 70 are either independently wealthy and it doesn't matter when they sleep; or they are not yet 50 and don't realize how prevalent sleep disorders are at that age. A sleep-deprived worker in a sedentary job is just as physically handicapped as a waitress or a bricklayer whose back and feet are always sore.

Posted by: angelas1 | September 6, 2010 10:00 PM | Report abuse

Once I turned 50, I became convinced that the "brains" who want us all to work until we're 70 are either independently wealthy and it doesn't matter when they sleep; or they are not yet 50 and don't realize how prevalent sleep disorders are at that age. A sleep-deprived worker in a sedentary job is just as physically handicapped as a waitress or a bricklayer whose back and feet are always sore.

Posted by: angelas1 | September 6, 2010 10:01 PM | Report abuse

The other thing that is rarely talked about in the discussion to raise the retirement age, is people have to be able to find work in their 60s that pays enough to support them. Companies often don't want older more expensive (salary and health care). If you work manual labor or physically demanding jobs you probably can't work. These are other reasons so many people take retirement at 62 - it may not be a choice. The punditry and Washington never address this.

Posted by: iag4 | September 6, 2010 11:34 PM | Report abuse

Those who opposed Social Security on principle decided that the best way to kill it is to discredit it. Starting with Reagan, they have been repeating that Social Security will be bankrupt so often that people are taking it for granted. The fact is that the only problem Social Security has is that too many want to spend these funds rather than raise taxes to pay for unrelated expenses, that they want.

My cure for Social Security's problems is simple and straightforward: let the current tax law remain as it is! The Republicans put it in place, so they obviously want tax rates to resort to the 2000 levels. (Actually Republicans should long for the tax rates in Eisenhower's time, since they reminisce about those good times so much).

Actually, I would prefer that the restoration of the tax rates was retroactive, since they obviously only ruined the economy. But retroactive tax rates are very difficult to implement.

Posted by: AMviennaVA | September 7, 2010 8:35 AM | Report abuse

Ezra, Ezra, Ezra.
Would you stop it already with the expression "going forward"? What is the alternative? Going backward? It's like, y'know, OMG, cluttering up your prose!

Posted by: AGentleReader | September 7, 2010 4:18 PM | Report abuse

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