Saturday, June 25, 2011
Expand Social Security?
The Social Security system provides an important, arguably essential, economic benefit for many elderly in the U.S. As is well known, Social Security appears set to run out of money in 2037. I’ve written about this topic several times (e.g., Ethical Musings: Privatizing Social Security and Ethical Musings: Musings about freedom and rules). Two recent items deserve attention.
First, the Wall Street Journal recently published an interactive website that allows the user to explore the implications of potential fixes for Social Security’s financial problems (click on the “Interactive Graphics” tab at Saving Social Security). Surprisingly, the calculator suggests that one fix for that problem is subjecting all earnings to the social security tax, not just the first $106,800, as is currently the case, while capping benefits to those higher earners at current levels. The cap on earnings subject to the tax has never made sense to me; now it makes even less sense. Only 6% of workers earn more than $106,800 per year.
Second, Thomas Geoghegan, a labor lawyer, makes what I think is a persuasive case for raising rather than cutting Social Security benefits in a New York Times Op-Ed column (“Get Radical: Raise Social Security,” June 19, 2011). Among Geoghegan’s significant points:
· Social Security now pays 39% of the current retiree’s pre-retirement earnings
· A significant number of elderly people live on less than $10,000 per year
· 34% of Americans have nothing saved for retirement.
Geoghegan argues for raising social security payments to 50% of a worker’s pre-retirement income, a level that he contends is affordable, would not cost the nation jobs (he operates his own small business as a lawyer), and would move the U.S. from the cellar to the middle of the pack in terms of how industrialized nations care for the elderly.
Morally, care for the elderly is a basic tenet in most religions (some will speak in terms of respect, but verbally honoring the elderly while watching them subsist on incomes that force choices between food, shelter, and healthcare is not respect). Selfishly, we all hope to join the ranks of the elderly someday – the alternative is an early death, which most of us find rather unattractive.
Taking care of the elderly is an example of reciprocal altruism: my taxes today provide for today’s elderly in the expectation that future generations will provide for me in my dotage.
Some other adjustments to Social Security certainly lack any Christian moral objection, e.g., increasing the full retirement age at which a person can collect full Social Security benefits. As people live longer, healthier lives, increasing the full retirement age can make sense. Idleness too often promotes unconstructive or even destructive behavior. The author of I Timothy warns against youthful widows attempting to “game” the church’s welfare system.
However, Christians should also remember a second basic moral premise: God's preferential concern for the disadvantaged among us. Admittedly, people should exercise some initiative and responsibility in planning for retirement. However, penalizing those who have failed to do so by forcing them to choose between food, shelter, and essential healthcare because they live on less than $10,000 per year is wrong.
Furthermore, not everybody is capable of holding a high paying job nor do sufficient high paying jobs exist for everyone who wants one to have one. Farmworkers, for example, average $10-12 per hour, or $20,000-$24,000 per year, presuming the person works 40 hours per week, 50 weeks per year. Farmworkers provide an essential service (I, for one, like to eat) and have little realistic expectation of ever earning more than that much money. After paying taxes, buying food, providing clothing and shelter, and paying other essential expenses, expecting a farmworker to save a substantial sum for retirement is ridiculous.
In Geoghegan’s words, “Who are we for?” I, for one, am for God's people – all of them. The Social Security system and its associated taxes are a relatively painless way of providing a minimal standard of living for our elderly.