Just in time for Halloween, the financial services firm Standard and Poor's offers a "study" designed to scare us into raising the Social Security retirement age. "Global Aging 2010: An Irreversible Truth", warns that age-related public spending is "Unsustainable without policy change." The report declares that "No other force is likely to shape the future of national economic health, public finance and policymaking as the irreversible rate at which the world's population is aging . . . By the middle of the century, about 1 billion over 65s will join the ranks of those classified as of non-working age." The ratio of that group to "those classified as of working age" (18-54) produces the "aged dependency ratio" that panics so many.
Almost everyone has heard the litany of worsening ratios: in 1950, 16 people at work for each person drawing benefits declining to the current (2010) 3.3 at work for each one drawing benefits with the prospect of 2.2 to one by 2020. That decline persuades many that Social Security cannot survive. But in the real world, the crucial factors for Social Security funding are the number of people at work, what they earn and how much of those wages are taxed. Since World War II, we have seen repeatedly that in a tight labor market, employers put aside prejudice and hire more women, minorities and older people to fill their needs and offer higher wages and arrangements, like child care, to make work more feasible.
More...
0 comments
Post a Comment