Republicans are not completely bereft of good ideas for what to do with Social Security.

But
at least one of those ideas raising the retirement age is very, very bad. Unfortunately,
it's also the idea that's been embraced by "centrist" lawmakers and policy activists, along with
GOP presidential hopefuls like Chris Christie and Marco Rubio.
It's a bad idea for two reasons.
First, as Ezra Klein recently tweet-stormed, there's an enormous class injustice baked into the
proposal. Life expectancy for the upper class has shot up in the last few decades, but it's
barely budged for the lower class. For the second group, raising the retirement age would
reduce the modest respite at the end of their lives even further. As Jared Bernstein observed,
"I've only heard the 'raise the eligibility age' argument from those whose life expectancies are
going up."
The second reason, which is related to the first but cuts deeper, is that as the economy
becomes more productive, the sane and decent thing to do is lower the retirement age.
Societies especially free market societies actually learn at a collective level over time.
Some of this is due to better technology, and some of it can be attributed to better business
models and tricks of the trade. Societies build knowledge, and thus get better at doing more
with less: "total factor productivity" economics-speak for what portion of total economic
output cannot be attributed to the inputs of labor and capital has been steadily rising since
we started measuring it mid-century.
Another way to look at it is the output of the economy per worker per hours worked. In 2009,
it took American workers about half the amount of time it took them in the mid-1970s to
produce the same amount of wealth.
This raises the question: What should we do with that bounty? The first option, at one
extreme of the spectrum, is for everyone to work the same amount of hours, but with double
the amount of income. (Now, as the inequality crisis shows, this doesn't necessarily mean
each individual worker's income doubles, just the total amount of income in the economy.)
The second option, at the other extreme, is for total income to stay the same, and we all work
half as much.
This is where you start to get a sense of the importance of the question. There are lots of
valuable and socially constructive things you can do with your time besides work for pay.
You can care for children, clean your home, volunteer at your mosque, travel the world,
throw a BBQ with friends, visit family, help out an aging parent, join a neighborhood play or
orchestra, start a band, work on a hobby or craft, etc.
Needless to say, this is precisely what a lot of Americans do with their retirement.
Of course, most societies do some mix of option one and option two. But the degree to which
America has gone with "more income" is pretty remarkable. Despite being clobbered by the
2008 recession, the labor force participation rate is still higher than it was mid-century.
The average age of retirement for men was a year or two lower in 2011 than in 1962. For
women, it was higher. The number of Americans who complete college has significantly
increased since mid-century, but this delays entrance into the labor force by only a few years.

Finally, in 1950, average annual hours worked per person was 1,908. In 2011 it was 1,703
a decline of less than 9 percent.
And while all this was going on, economic output per worker per hour doubled.
When you lay it out like this, the push to raise the retirement age begins to look more than a
little perverse. Retirement is a valued and time-honored part of American and Western
culture. It's an acknowledgment that people deserve a break after putting in their years in the
economy, and that the elderly among us should have a chance to enjoy themselves, spend
time with their families, and give back to their communities in other ways. Beyond all that,
it's an acknowledgement that there's more to life than a paycheck. You work to live, not the
other way around.
So when the economy is able to give us that same paycheck for less effort, there's something
demented about concluding that the portion of our lives spent in retirement should get
shorter.
The response you usually get from critics is that the ratio of retirees to productive workers is
going to increase as the baby boomers retire, and the economy won't be able to take the
pressure. That ratio dropped from 5 to 1 in the 1960s to 3 to 1 in the 1990s, and by the time
the baby boomer bulge plateaus around 2035, it will be 2 to 1.
But remember productivity? Economist Dean Baker did some useful calculations, and
determined that if productivity increases by 1 percent annually between now and 2035 a
historically low rate, but it might be what's in the country's future the gains to living
standards would be around 25 percent. By contrast, the drag from the increasing ratio of
retirees would be less than 10 percent. If productivity keeps increasing at its historic rate of 2
percent annually, the gains to living standards would top 50 percent.
So in 2035, workers can keep seeing bigger paychecks and we can pay for the retirement of
our elderly. Hell, we could increase the length and generosity of their retirement and workers
would still see bigger paychecks. And anyone who's in good physical and mental health and
enjoys their job would be free to keep working as long past the official retirement age as they
want.
The only way this wouldn't happen is if Americans decide that, no, they want even more
income, and they're willing to shorten and impoverish the retirements of the elderly in order
to get it. This is where inequality comes back into the picture. Time spent not working but
still enjoying a decent standard of living is essentially the flip side of the income from time
spent working: you can't redistribute one without redistributing the other. So a society in
which everyone has access to a decent retirement will inevitably be a more egalitarian society
as well.
Conversely, thanks to how horribly unequal wealth ownership is in this country, the drive to
privatize retirement through stock instruments such as 401(k)s and the like is effectively a
drive to redistribute access to a decent retirement up the income ladder.
So if your first-order goal in American politics is to insure that, for a small class of elites, the
sky's the limit on how much wealth and status they can accrue, then yes: you're going to find
it hard to provide everyone a decent retirement.

Discussions of Social Security and Medicare tend to focus on the cost of the programs
without considering the bigger picture: the many ways these programs help people and
boost the larger economy. What would happen if we were to expand these valuable
programs instead of cutting them?
Right now America has high unemployment overall but an especially severe youth
unemployment crisis a huge setback for an entire generation, with terrible economic
effects for them and the country. At the same time, older people are clinging to jobs,
waiting until their retirement benefits kick in. Plenty of them could and would happily
take a rest with just a bit of help. Wouldnt lowering the retirement age open up badlyneeded jobs for younger workers?
But theres more. Moving unemployed younger people into jobs would lower our
safety-net costs as fewer people relied on public benefits to make ends meet reducing
government spending. Getting people working also increases tax revenue and
contributions to Social Security and Medicare. And getting people working also
increases consumer demand, which gets more people working and increases tax
revenue. So moving people into jobs attacks Americas deficit problem from both ends.
But wait, theres more! High unemployment creates a buyers market for labor, which
brings wages down. If lowering the retirement age creates enough jobs
to significantly reduce unemployment perhaps wages would finally begin rising again.
What happens to health care costs if we lower the retirement age? Its a sad fact of life
that the older people get, the more health care they need. So the oldest people in the
private-insurance pool are the most expensive. This means that lowering the age of
eligibility for Medicare takes the most expensive people out of the private insurance
pool, reducing premium costs for everyone else. At the same time it adds relatively
inexpensive people to the Medicare pool, lowering Medicares overall cost-per-person.
On both ends of that equation lowering the age of eligibility for Medicare to 55 helps the
countrys economy. The people over 55 that move into Medicare are no longer paying
health-insurance premiums, which frees up disposable income giving them more
purchasing power. With relatively expensive people over 55 moved to Medicare
everyone under the age of 55 would pay lower health-insurance premiums, boosting
their purchasing power as well. This has a stimulus effect, boosting growth, which
would in turn boost revenues and lower the deficit.
Of course many people have insufficient savings to retire even with full Social Security
and Medicare. Others like their jobs and wouldnt want to leave them. But many older
workers are counting the days until they qualify for Medicare and Social Security.
Other Economic Benefits
Lowering employment and driving up wages means fewer people defaulting on student
loans and mortgages.
And we should consider that the travel, hospitality and tourism industries would greatly
benefit from a surge of relatively young retirees.

In other words, if a dollar spent on a program brings back a dollars worth of benefits
or more somewhere else in the economy, do you really save money by cutting that
program?
Our governments policies are supposed to reflect things the public wants. So what do
opinion polls tell us about the idea of expanding Social Security and Medicare? Its
difficult to locate polls in which the public is even asked about lowering the retirement
age. However, universally negative reactions to the idea of increasing the retirement age
or cutting benefits at least implies that Americans would probably favor lowering it. The
following is just a sampling of polls that gather opinions on Social Security and
Medicare.

January 2013, National Academy of Social Insurance, 84 percent believe current

Social Security benefits do not provide enough income for retirees, and 75
percent believe we should consider raising future Social Security benefits in
order to provide a more secure retirement for working Americans
December 2012, Politico-George Washington poll, 64 percent oppose raising
the retirement age for Social Security benefits
Nov 2012, Washington Post-ABC poll, Q: Do you support or oppose raising the
age for Medicare coverage from 65 to 67? 30 percent support, 67 percent
oppose
March 2011, Wall Street Journal/NBC News, 54 percent no cuts to Medicare, 77
percent consider cutting Social Security mostly or totally unacceptable.
July, 2010, National Committee to Preserve Social Security and Medicare
Foundation poll, 78 percent of Americans oppose raising Social Securitys
retirement age.

The best reason to do this, of course, is that it helps people. Cruel budget cuts that tear
peoples lives apart should not even be on the table. Investing in our people to increase
our prosperity should be the highest priority.
None of this is to suggest that the cost to government of lowering the retirement age
would be covered dollar-for-dollar by the resulting cost decreases in other programs.
But it would have an overall positive social impact. Makes you think, doesnt it?
PS: I wrote to economist James K Galbraith, who offered a caveat. He wrote,
I would not do it permanently. It will be more effective as a strategy if you make the
option more attractive for a brief window say three years. You could then lure quite a
few people who are ready to quit out of the workforce, open up jobs, and at the same
time leave people who want to continue working alone.

ne of the most powerful forms of stimulus we could apply to our economy right now would
be to lower the current Social Security retirement age from the current 65-67 to 55, and
increase the benefits back to where they were in inflation-adjusted 1960s dollars by raising
them between 10 to 20 percent (so people could actually live, albeit modestly, on Social
Security).
The right-wing reaction to this, of course, will be to say that with fewer people working and
more people drawing benefits, it would bankrupt Social Security and destroy the economy.
But history shows the exact reverse.
Instead, it would eliminate the problem of unemployment in the United States. All those
Boomers retiring would make room in the labor market for all the recent high-school and
college graduates who are now finding it so hard to find a job.
If enough Boomers left the job market, it would even flip the current dynamic of too-manypeople-chasing-too-few-jobs upside down, and create a tight labor markets. Tight labor
markets drive up wages.
And as wages go up, tax revenues which are paying for Social Security (among other
things) would increase.
Additionally, these new-into-the-workforce people can then pay off student loans, buy new
houses and cars, and otherwise drive the economy from the bottom up. Which will further
increase tax revenues further strengthening the Social Security system.
To further tighten the job market and drive up wages (and tax revenues), modify the Fair
Labor Standards Act of 1938 which tightened the labor market and reduced
unemployment by establishing the 40-hour work week - to include all hours worked by a
person. We could also, like in France, drop the 40-hour maximum-workweek threshold to 35
hours (used by the Mitterrand government to successfully lower unemployment and stimulate
the French economy). A final step would be to emulate the rest of the developed world and
require by law that every worker get at least two to four weeks a year of paid vacation
further tightening the labor market.
In Uganda, Joseph Okwakoi gets it. Hes the president of the National Youth Council in that
nation, a group that has considerable political power (and an affiliated Member of Parliament,
the Central Youth Partys Joseph Kasozi).
Earlier this month, Okwakoi called on Parliament and President Museveni to lower the age of
retirement for government workers (the countrys largest employer) from the current 60 years
of age to 55. This single act would instantly create about 15,000 job openings in the country,
which could be filled by currently unemployed young people.
President Museveni replied that hed consider it seriously, pointing out that, The retirement
age was actually 55 when we came but because of manpower shortage we put it at 60. Now
that the manpower shortage has eased, wages are falling, and unemployment is rising, he
noted, We shall study it.
What Joseph Okwakoi understands is that there is a marketplace for labor. When the supply
of labor exceeds demand, the price of labor (wages) falls. On the other hand, when the

demand for labor is at or greater than the supply of labor, the price of labor - wages increases.
This is the main reason why the labor movements of the 18th and 19th centuries fought so
hard against child labor; they knew that if children were removed from the labor marketplace,
then the supply of labor (the number of people available to work) would decrease and the
price of labor (wages) would increase. And, sure enough, thats exactly what happened - and
it began the creation of a blue-collar middle class.
Its also why the labor movement pushed for an 8-hour day and a 40-hour maximum
workweek. By reducing the amount of labor available from each worker from the average 60
hours a week or so people were working before 1938, the labor market tightened up,
increasing the number of people who could be employed and raising wages.
Of course, this is the exact opposite of American labor policy ever since the
Reagan/Bush/Clinton/Bush era. Reagan drove down wages by busting unions (which tighten
a labor marketplace); declared an amnesty for millions of then-illegal immigrant workers to
increase the supply of labor and depress wages (particularly whacking the carpenters and
other construction trades unions); and began the process (completed in a big way by Bill
Clinton with NAFTA and GATT/WTO) of dismantling tariffs, taxes, and laws that made it
expensive or illegal to export American jobs.
Reagan also put into the chairmanship of the Fed Alan Greenspan, who openly declared that
his most important job as chairman of the Fed was to prevent wage inflation a term
which he exclusively applied to working-class people. Greenspan is still preaching that nowdiscredited and anti-American philosophy he learned from Ayn Rand, in fact.
Having already largely wiped out the ability of a blue-collar single-wage-earner family to
have a middle class lifestyle over the past 30 years, Greenspan now wants to go after whitecollar workers by eliminating limits on H1B visas for skilled workers ranging from computer
programmers to physicians to scientists. The investor class would always be protected, in the
Greenspan world, but the working class regardless of skill level should always be the
working poor.
In September of 2007, in an interview on C-SPAN for Book TV, Greenspan said:
We pay the highest skilled labor wages in the world. If we would open up our borders to
skilled labor far more than we do, we would attract a very substantial quantity of skilled labor
which would suppress the wage levels of the skilled, because the skilled are essentially being
subsidized by the government, meaning our competition is being kept outside the country.
Its shocking that ideologues like Greenspan, Reagan, and Clinton believe this, but they do.
And the only way to reverse the past 29 years of Reaganomics/Clintonomics is to tighten up
the labor market again. While a great start would be to pull out of our insane trade treaties
and begin again protecting American manufacturers, that will take a decade for the impact to
be truly felt even if we were to go back to our 1980 tariff levels today.
But providing space for a good chunk of the 16 percent of the American workforce over 55
years old will immediately take us to nearly zero unemployment and dramatically stimulate
the economy. Then we can begin to bring our manufacturing jobs back home from China and

the other important steps (Medicare For All and Card-Check for unionization) to restore the
strength and integrity our nation and national economy once had.

1. It could be good for your health.

A 2002 study of British civil servants, for example, found that retiring at age 60 had no effect
on the subjects physical health and that those with higher-level jobs saw an improvement in
mental health, possibly because they were no longer subject to work-related stress (and had
better pensions than lower-ranked workers). Other studies, however, have suggested that
retirement can be hazardous to your health, as well get to in the next section.
2. Youll enjoy more time for travel. The earlier you retire, the more years youll have
before health issues begin to limit your mobility.
3. Its an opportunity to start a new career. If you dream of switching fields or starting
your own business, sooner may be better than later. Youll be a more desirable job candidate
to many employers the more years you have ahead of you. And if you want to be your own
boss, youll have more time to get your business off the ground. A business you launch at age
60, for example, could easily keep you intellectually challenged and out of mischief for
another 20 years or more. See Don't Retire Early - Change Careers Instead.

Read more: The Pros and (Mostly) Cons of Early Retirement | Investopedia
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Working can be enjoyable, but most people prefer to devote time to their families and hobbies.
Employees (and self-employed) working at a late ages are not as productive as they used to be. If
retirement age was lowered, those jobs could be occupied by younger people who are likely going to
be more productive. This could be a way to reduce unemployment rates which is another
important side effect of the crisis. Justice is another argument. People that have worked in lowerpaid tough jobs tend to die earlier than those conducting better paid jobs. Thus, raising retirement
age would impact mostly working classes. Finally, in countries with aging population, immigrants
could occupy the jobs and contribute to make pension systems sustainable.