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Like undead zombies or vampires on Halloween, a persistent story about social security, greedy baby boomers, and maltreated youth periodically rises from the grave. But the story is wrong. Exposing the vampires makes them leave, and I hope that shedding light on the facts can help kill this false story. Spending on seniors does not replace spending by younger populations. Societies that care about vulnerable people, regardless of age, are more generous.
My study of 58 nations over 30 years shows that nations that are generous with their elders are also generous with children. There is a strong link between elder care and child poverty programs and spending on education. In caring societies, spending on pensions and education increases together, suggesting that when political forces associate older people and young families, social spending increases from one group to another. A 10% increase in education spending (as a percentage of GDP) is correlated with a 7.3% increase in pension spending. It seems that the countries that make the political decision to improve the lives of the elderly also do so for young people.
But if it's not greedy geezers, what are the policies and trends that really hurt young workers? We can clearly see the trends: stagnant wages, rising debt and high housing costs.
Economist Dean Baker and the Economic Policy Institute (EPI) note that the wages of a typical worker have barely increased in four decades, especially for men. Career prospects with regular salary increases are therefore low. EPI shows that in 2013 hourly wages of young university graduates were lower than in the late 1990s.
And the completion of studies is not a quick fix. Low and stagnant wages affect even those with a four-year university degree. And many young graduates and those who have borrowed but never graduated need to finance more loans as a percentage of their income than young people have ever done before.
In addition, housing costs in large cities where economic growth is strong and young people are looking for work are at record levels. Increases in shelter costs easily outperform inflation in many cities, making life particularly difficult for low- and modest-income households and for first-time homebuyers.
Thus, an unbalanced and sluggish job market, debt and housing costs are the main issues facing the baby boomer's children, not their supposedly greedy parents. In fact, adequate social security and health insurance are a gift for the Millennials and the X Generations. These programs minimize the risk that younger families will need to support their adult parents, aunts and uncles as They are aging.
It is curious to know why this story and the myth of Greedy Geezer persist. We hear repeatedly that seniors and retirees are reptiles, with social security and health insurance being wrongly seen as programs in which "older people eat young people". Dean Baker has collected some notable examples: the Boston Globe had published an article last year titled "baby boomers destroyed everything"Thomas Friedman and the New York Times.
There are exceptions to journalists' misunderstandings about social security: LA Times, Michael Hiltzik, reminds us of how many young people are being lifted out of poverty because of social security. Allan Sloan of The Washington Post provides a similar presentation of reality. And Trudy Lieberman in the Columbia Journalism Review It is difficult to understand why the press accepts too easily that older people have "too well" to the detriment of younger generations.
Is social security too generous? Consider a modern couple with two average employees with a combined annual income of $ 102,600 in 2017 dollars, based on the excellent calculations of the Urban Institute. The lifetime social security benefits provided for a person reaching the age of 65 in 2015 amounted to 624,000 USD, compared with a tax paid for life of 557,000 USD. It's an imbalance, but that's exactly what an insurance program expects to do. In an insurance program like social security, people are not deceived. My health insurance has cost hundreds of thousands of dollars and I hope my health costs are only a fraction of that.
Medicare is expensive, but not because of too generous coverage. The American health care system, including Medicare, is ineffective. Americans pay twice as much for our health care per person as other rich countries without higher health outcomes. We pay too much for prescription drugs and expensive medical procedures. But there are political barriers to change. Polls show bipartisan support for the use of Medicare muscle strength and the federal government to negotiate lower pharmacy costs. But we do not have enough elected officials who want these changes.
Are young people opposed to secure systems for the elderly? No, young people want more security for social security and Medicare, not less. One-third of social security beneficiaries are young people who receive survivor benefits or as disabled or dependent persons with disabilities for dependents. (The high number of direct beneficiaries still surprises me, and I study this job to make a living.) In addition, young people are willing to pay more for social security – about 73% of them estimate that it is essential to preserve social security even if it means: increase social security taxes paid by working Americans.
There are a lot of generational equitable ways to increase social security and health insurance revenues. Social security and health insurance can be maintained and expanded by raising incomes in a rather simple way. We can increase the total FICA tax of employer and employee (divided equally) from 12.4 to about 15% of the payroll. Or we can raise taxes less and increase the annual revenue cap from $ 132,900 to over $ 250,000 or more.
If we do not make such simple and fair changes, we are really irresponsible from one generation to the next. However, providing seniors with decent income and health care does not deprive the youngest of their future. Instead, social security and health insurance, as well as education and other programs for young people, help us unite from one generation to the next, making us mutually dependent. It is the mark of a civilized and fair society.
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Getty Images Royalty Free Photograph
Like undead zombies or vampires on Halloween, a persistent story about social security, greedy baby boomers, and maltreated youth periodically rises from the grave. But the story is wrong. Exposing the vampires makes them leave, and I hope that shedding light on the facts can help kill this false story. Spending on seniors does not replace spending by younger populations. Societies that care about vulnerable people, regardless of age, are more generous.
My study of 58 nations over 30 years shows that nations that are generous with their elders are also generous with children. There is a strong link between elder care and child poverty programs and spending on education. In benevolent societies, spending on pensions and education increases together, suggesting that when political forces combine older and younger families, social spending increases from one group to another. A 10% increase in education spending (as a percentage of GDP) is correlated with a 7.3% increase in pension spending. It seems that the countries that make the political decision to improve the lives of the elderly also do so for young people.
But if it's not greedy geezers, what are the policies and trends that really hurt young workers? We can clearly see the trends: stagnant wages, rising debt and high housing costs.
Economist Dean Baker and the Economic Policy Institute (EPI) note that the wages of a typical worker have barely increased in four decades, especially for men. Career prospects with regular salary increases are therefore low. EPI shows that in 2013 hourly wages of young university graduates were lower than in the late 1990s.
And the completion of studies is not a quick fix. Low and stagnant wages affect even those with a four-year university degree. And many young graduates and those who have borrowed but never graduated need to finance more loans as a percentage of their income than young people have ever done before.
In addition, housing costs in large cities where economic growth is strong and young people are looking for work are at record levels. Increases in shelter costs easily outperform inflation in many cities, making life particularly difficult for low- and modest-income households and for first-time homebuyers.
Thus, an unbalanced and sluggish job market, debt and housing costs are the main issues facing the baby boomer's children, not their supposedly greedy parents. In fact, adequate social security and health insurance are a gift for the Millennials and the X Generations. These programs minimize the risk that younger families will need to support their adult parents, aunts and uncles as They are aging.
It is curious to know why this story and the myth of Greedy Geezer persist. We hear repeatedly that seniors and retirees are reptiles, with social security and health insurance being wrongly seen as programs in which "older people eat young people". Dean Baker has collected some notable examples: the Boston Globe had published an article last year titled "baby boomers destroyed everything"Thomas Friedman and the New York Times.
There are exceptions to journalists' misunderstandings about social security: LA Times, Michael Hiltzik, reminds us of how many young people are being lifted out of poverty because of social security. Allan Sloan of The Washington Post provides a similar presentation of reality. And Trudy Lieberman in the Columbia Journalism Review It is difficult to understand why the press accepts too easily that older people have "too well" to the detriment of younger generations.
Is social security too generous? Consider a modern couple with two average employees with a combined annual income of $ 102,600 in 2017 dollars, based on the excellent calculations of the Urban Institute. The lifetime social security benefits provided for a person reaching the age of 65 in 2015 amounted to 624,000 USD, compared with a tax paid for life of 557,000 USD. It's an imbalance, but that's exactly what an insurance program expects to do. In an insurance program like social security, people are not deceived. My health insurance has cost hundreds of thousands of dollars and I hope my health costs are only a fraction of that.
Medicare is expensive, but not because of too generous coverage. The American health care system, including Medicare, is ineffective. Americans pay twice as much for our health care per person as other rich countries without higher health outcomes. We pay too much for prescription drugs and expensive medical procedures. But there are political barriers to change. Polls show bipartisan support for the use of Medicare muscle strength and the federal government to negotiate lower pharmacy costs. But we do not have enough elected officials who want these changes.
Are young people opposed to secure systems for the elderly? No, young people want more security for social security and Medicare, not less. One-third of social security beneficiaries are young people who receive survivor benefits or as disabled or dependent persons with disabilities for dependents. (The high number of direct beneficiaries still surprises me, and I study this job to make a living.) In addition, young people are willing to pay more for social security – about 73% of them estimate that it is essential to preserve social security even if it means increasing the social security taxes paid by working Americans.
There are a lot of generational equitable ways to increase social security and health insurance revenues. Social security and health insurance can be maintained and expanded by raising incomes in a rather simple way. We can increase the total FICA tax of employer and employee (divided equally) from 12.4 to about 15% of the payroll. Or we can raise taxes less and increase the annual revenue cap from $ 132,900 to over $ 250,000 or more.
If we do not make such simple and fair changes, we are really irresponsible from one generation to the next. However, providing seniors with decent income and health care does not deprive the youngest of their future. Instead, social security and health insurance, as well as education and other programs for young people, help us unite from one generation to the next, making us mutually dependent. It is the mark of a civilized and fair society.
