The government wants people to work into their 70s to relieve social security’s debt obligations. But doing so has numerous effects, most dramatically on the young. When older workers prolong their employment, younger ones can’t find jobs or are forced to take those with low wages while in their most productive years. Keeping the younger generation waiting instead of innovating and creating, says writer Thomas Geoghegan, “may be slowing up the ability of the species to adapt.” (“Exit Planning,” by Thomas Geoghegan, The Baffler, No. 31 pg. 81)
Being perceived as a bottleneck could make anyone employed over 60 feel guilty but those older workers have little choice. Congress is slowly unraveling the safety net, making Social Security and Medicare benefits skimpier so that a person has to go on working to make ends meet. Unfortunately, the glut in the number of employable workers lowers salaries and requires everyone to stay on the job longer.
The death of the defined-benefit plan known as a pension, created by Labor unions, is part of the current problem. In the past, workers looked forward to putting in their time and receiving a monthly income when they retired. Few of those defined plans exist today, except for members of Congress. The retirement programs currently available, known as IRAs or a 401(k)s, are savings incentives to which an employer may or may not contribute. (Ibid pg. 80) Unlike the defined-benefit plan which wasn’t voluntary, modern plans are. Workers can chose to save or spend their money. So far that system hasn’t served employees well. The average amount accrued at retirement is around $100,000, far less than needed to sustain a person for long. (Ibid pg. 80.)
Because unions are in decline and the world economy has changed, we can do nothing about the demise of the defined pension plan. But we do need to rethink how we treat Social Security. The agency doesn’t need less funding. It needs more. Feeding the kitty would get older people out of the workforce earlier and provide jobs for the young. One way to ease the inevitable rise in debt would be to increase deductions. The move would be unpopular but it would be necessary. Extracting more money from the golden parachutes of retiring CEOs and the 1%s would help, too. After that, we could merge Congressional retirement plans with Social Security for an addition cash infusion. Unfortunately, those in Congress are unlikely to support this last solution.
(Originally published 6/17/16)