Why Raising the Social Security Retirement Age is Stupid, Clueless, and Cruel


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Older manual laborer

Graphic adapted from photo at this fine website: http://didierruef.photoshelter.com/image/I0000yts3b8J61uc

My friend Kenneth Bernstein from Virginia has the self-appointed job of reading the Washington Post opinion page early each morning and alerting hundreds of us when it publishes something that we simply have to read.  He came up with a good one today, so I’m sending it along to you.  It’s Ezra Klein’s explanation about why rich people want to raise the retirement age for Social Security: basically, it doesn’t affect them and they have little understanding of the lives of those of us whom it would affect.

Klein notes that most people don’t wait until the age where they can receive full retirement benefits before they elect to start receiving Social Security.  (He says that that’s 65; I believe that it’s now higher — and scheduled to be higher still in the future.)  Instead, most people start collective at age 62.

When they do that, it means they get smaller benefits over their lifetime. We penalize for taking it early. But they do it anyway. They do it because they don’t want to spend their whole lives at that job. Unlike many folks in finance or in the U.S. Senate or writing for the nation’s op-ed pages, they don’t want to work till they drop.

He quotes Nobel Prize winning economist Peter Diamond (no relation) as saying:

What do we know about the people who retire at 62? On average, shorter life expectancy and lower earnings than people retiring at later ages. If anyone stood up and said, “Instead of doing uniform across the board cuts, let’s make them a little worse for people who have shorter life expectancies and lower earnings,” they’d be laughed at. Anything that reduces benefits is going to hurt everybody. It’s going to hit people with short life expectancies, it’s going to hit people with high life expectancies. But we should not make it worse for those retiring earliest.

That’s what’s galling about this easy argument. The people who make it, the pundits and the senators and the CEOs, they’ll never feel it. They don’t want to retire at age 65, and they don’t have short life expectancies, and they’re not mainly relying on Social Security for their retirement income. They’re bravely advocating a cut they’ll never feel.

But you know what they would feel? Social Security taxes don’t apply to income over $110,000. In 2011, Lloyd Blankfein’s total compensation was $16.1 million. That means he paid Social Security taxes on less than 1 percent of his compensation.

If we lifted that cap, if we made all income subject to payroll taxes, the Congressional Budget Office estimates that it would do three times as much to solve Social Security’s shortfall as raising the retirement age to 70. In fact, it would, in one fell swoop, close Social Security’s solvency gap for the next 75 years. That may or may not be the right way to close Social Security’s shortfall, but somehow, it rarely gets mentioned by the folks who think they’re being courageous when they talk about raising a retirement age they’ll never notice.

Raising the cap on Social Security would keep the system solvent for 75 more years — although it would be nice if Congress didn’t keep trying to borrow from it (as Al Gore accused G. W. Bush of doing in 2000 — that’s what the “lockbox” was all about) and then trying to privatize it so as to avoid the need to pay it all back.  Raising the retirement age completely misses the reality of most people who do manual labor — labor that they become less able to do once they reach age 60, or 50, or 40 — or for, some jobs, 30.  Someone like me can easily work until age 70 or beyond, barring disability; a house painter or a nurse pulling patients into and out of beds, probably not.  Even a cashier, standing for eight hours a day, is wearing down her or his body even if they aren’t getting their pulse into the yellow zone.  The same goes for a truck driver — sitting for that long can damage your circulatory system.  Sure, some people survive — but the ones we see doing so are increasingly outnumbered by the ones who died trying.

The attorneys and business leaders who make up most of Congress and its prominent advisors don’t get it because they don’t do manual labor.  They may play hard on the slopes or the jet skis, but that’s not at all the same thing.  All it does is help them justify the notion that raising the retirement age is not as cruel as it is.  My suspicion is that the punitive nature of this “reform” is part of the point — the more desperate people are, the more pliable they are.

My big encounter with deficit tub-thumpers this year came with the good folks of Rebellious Truths.  So I put this challenge to them: if you’re talking about cutting Social Security by raising the retirement age, or cutting benefits, or one of the other notions that all lead to less money in the pockets of the 99% (or let’s call it the 92%, whichever), but you’re not talking about raising the cap on income subject to Social Security taxes — how is what you’re pushing either rebellious or true?

It’s not even that radical of an idea — not like, oh, imposing payroll taxes on income from investment as well as from labor.  But let’s leave that idea for an undetermined future moment.


About Greg Diamond

Worker's rights attorney now moving into "good governance" litigation. North Vice Chair of Democratic Party of Orange County and occasional candidate. Proud to be prolix. Unless otherwise specifically stated, his writings never speak for the Democratic Party at the local, county, state, national, or galactic level. He tries to either suppress or openly acknowledge his partisan, issue, ideological, and "good government" biases in most of his writing here. If you have a question about any particular writing, just ask him about it and (unless you are an pseudonymous troll) he will probably answer you at painful length. He lives in Brea but generally doesn't blog about it. A family member works as a campaign treasurer for Wendy Gabriella in AD-73; he doesn't directly profit from that relatively small compensation and it doesn't affect his coverage. He does advise some campaigns informally and without compensation, although in 2014 he may receive some compensation for campaign consulting and fundraising for the campaign of Jorge Lopez for Orange County Assessor.