Monday, September 13, 2010

Consequences of raising Social Security retirement age

Today's NYT cites "research" from the left-leaning Center for Economic and Policy Research that shows as many as 45% of elderly workers hold physically demanding jobs.  Workers in such jobs are concerned that they will be physically incapable of working past the current ages of eligibility for partial (62) or fill (66) benefits.  Three reactions:
1) The economy has been shifting out of agriculture, mining, and manufacturing into services for quite some time.  There is every reason to believe this trend will continue.  This means that the jobs held by elderly workers 20-30 years from now (when any big changes in Social Security eligibility made today would take place) will be much less likely to be physically demanding than their jobs today.

2) The research is based on whether a worker says "yes" to any item on a long list of job characteristics, such as bending or twisting, trunk strength, significant time standing, etc.  It does not ask how much time is spent in these activities (5 minutes a day or 8 hours a day) or make any attempt to tease out the magnitude of the demands when they arise (lifting 5 pound bags versus 50 pound bags).  Here are the top 5 "physically demanding" occupations for workers 58 and above, by gender: janitors, supervisors of retail sales workers, retail sales workers, drivers and truck drivers, and carpenters (men); school teachers, retail sales persons, supervisors of retail sales workers, cashiers, and housekeepers (women). 

3) Social Security does provide for disability benefits for those who are physically incapable of working.  Of course, there is no mention of these benefits in today's NYT.

I do not pretend that changing Social Security will be easy.  The real problem is the "one size fits all" design of the program.  Instead of being totally ineligible for benefits until age 62, why not change the system so that more workers qualify for reduced benefits at younger ages? 

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