Who says old people deserve to retire?

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In a long post about Social Security, Matthew Yglesias writes:
For some of us, the Social Security debate really is about what the president pretends it's about: How best to provide a dignified retirement for all Americans in a manner consistent with the continued growth of American prosperity.

Maybe I'm just particularly callous, but the reason why we as a community should be interested in providing old people with a dignified retirement rather escapes me. It's certainly true that old people are often sick and therefore unable to work, but that's an entirely different issue from just being old. We've already got programs that provide support for sick and poor people regardless of age. The purpose of Social Security is to find people who just happen to be old.

Sure, it's attractive to be able to slack off a bit after working your whole life, but on the other hand it's attractive to be able to slack off while you're young before settling into a life of work, but the government didn't write me a check every month after I graduated college.1 Now, it's true that the people retiring now have been paying into social security their entire lives and they're entitled to get something back. I'm sympathetic to that argument, but that doesn't explain why we need to continue the program in perpetuity, but merely says that we can't just cut them off cold turkey and need to find some way to close out the system in some gradual kind of way.

1.During college, of course, I slacked off at the expense of my parents, but the government wasn't really responsible for that..

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Yes, you are particularly callous.

Additionally, you probably aren't considering the possibility that many jobs might be too taxing to continue into old age. Coal miner and steelworker, for example. Before you make some silly argument that those particular jobs can be treated separately, consider: truck driver, warehouse clerk, traveling salesman, janitor, security guard, construction worker, and lumberjack. I've got more if you want them.

In general I'd claim that the majority of people now live long enough to reach a state of fragility that disqualifies them from earning an income.

Allan, I think Eric's point is that we should measure the fragility (relative to job), not the age. If you want to use age as a proxy to reduce the cost of administration, then some actual research into the age at which one is to fragile for particular types of jobs is called for. Eric's principal beef here is that people see this as an entitlement.

Fragility is easily measured. When people are too old (or too anything else) to do a job, the value of their marginal product decreases. So, if the concern is with worker "fragility" then you either let people slip sufficiently in wages until they reach some floor, at which they receive a subsidy, or you use age as a proxy (perhaps as a means of avoiding moral hazard issues).

Whether this is a good way to run a society is a separate question, and one which I thought had been answered in the US for about 65 years.

Well, you certainly can use old age as a proxy, but I'm not sure it's a particularly good one, especially because now that people see it as an entitlement and it's therefore gotten so hard to raise the retirement age to match modern medical care.

Allan, I agree that most people probably live long enough to reach a state of fragility that disqualifies them from earning a good income. What's at issue is whether people who reach that state at 50 should be treated differently from those who reach that state at 70?

There's a lot more at stake than whether the social security benefit age should be 50 or 70. Social security pays benefits for full/partial disability, parental & spousal loss, etc.

The bigger issue is that social security is part of a contract between government, labor, and capital-holders. Each of the two major changes (privatization and benefit plan changes) in the President's plan attempt to modify the contract in different ways. One change might effectively limit benefits, but the privatization change is really an attempt to further align the interests of labor with capital holders. Such an alignment is important in the coming years because the Republicans will push for changes to the legal regime which enhances America's global position as a competition state.

I am not in the loop on this, so I will speculate that good Republicans and free-traders want the change to social security not because it changes the age at which retirement benefits acrue. But because, in an environment of increasing global interdependence, changes that align labor with the interests of capital holders will also more closely align political coalitions.

IOW, President Bush's primary goal in changing social security is the entrenchment of the Republican majority's economic values. If he gets it, it might be the most impressive element in his legacy.

I understood the thrust of your argument to begin with, but there's no reason to believe that it would be wise to do "capability testing". If you're less than retirement age, and you can't earn an income, society has ways of assisting you to deal with this exceptional condition. If you're greater than retirement age and you can't earn an income, society has ways of handing this all too typical condition.

The fact that you can take your money early (and get less) or take your money late (and get more) is a dandy way we get to fuzz over exactly what retirement age should be.

Now: raise the age every so often (to cater for improved medical care), and adjust the payroll tax (to account for shifting demographics), index payouts rationally, and do some means-testing for the extremes.

Would that all societal problems be so easy to deal with.


Sorry, but I think you're missing the point. The question here is whether the fact that one has worked for a large number of years and could still work for more entitles one to a comfortable retirement even if you have not made provision for it yourself. As far as I can tell you have not adduced any reason why that should be the case.
Now, it's certainly true that old age is correlated with being to feeble to work and that therefore it might be worth using it as a proxy. I'm not confident that that's true, but it's an empirical question. My point is simply that we don't automatically owe it to able-bodied old people.


I'm not talking about Bush's plan--which strikes me as extremely stupid--at all here. I'm talking about the ethical situation.

My point was to urge you consider that our society doesn't "automatically owe it to able-bodied old people" any more than the Yankees owe payments of a guarenteed contract to a pitcher.

This is not to be confused with an entitlement. No one put a gun to the Yankees management to agree to pay millions of dollars to a pitcher before the pitcher started work. But once the Yankees had agreed to do it, they have to pay.

On the macro-level, I claim Social Security benefits are part of our labor/capital/govt contract that influences voting coalitions. Discussing the retirement age outside of the macro-level negotiations is like trying to decide the optimal number of vacation days for each worker without considering the rest of the benefit package, job security, and the other factors that make each job unique.

Huh? As I said quite clearly, we can't just cut the people off who have been paying their entire lives. That doesn't mean that we shouldn't find some way o terminate the system.

The problem is that many old people aren't actually "sick" or "disabled"--they're simply unable to hold down their career jobs anymore, due to general physical and mental decline. (This is especially true of people in jobs that impose high physical or mental stress levels.) Presumably the right thing to say to a younger worker in that situation is, "go find a job you can handle". But older workers typically find it much more difficult to adjust to a new job, and employers are less likely to be willing to invest in retraining them for their all-too-short new careers. Hence the "retirement" solution--even the more or less able-bodied elderly are assumed unable to work anymore, and given a modest pension.

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