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Recession Blather Hides the Real Economic Crisis |
The nation’s talking heads still are debating whether the country is in a recession. Such noise is a distraction from the real issue: The short- and long-term decline in living standards experienced by the vast majority of us is real. (The long list of short-term trends includes word today that annual retail prices shot up 5 percent in June, the biggest 12-month change since May 1991, a time when high gas prices from the Gulf War skewed the annual figure.)
Two studies out this week show the far-reaching consequences of two trends that preceded the current economic mess—the ongoing decline in wages and the widening income gap between the extremely wealthy and everyone else.
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The first study finds that rising economic inequality can be correlated to life expectancy. While life expectancy has increased across the United States between 1980 and 2000, the degree to which people live longer has become increasingly connected to their socio-economic status, according to the nonprofit Economic Policy Institute (EPI).
In 1980, those with the highest socio-economic status had a life expectancy 2.8 years higher than those with the lowest status (75.8 versus 73.0 years, respectively). By 2000, that gap had grown: Those in the top decile had attained a life expectancy of 79.2 years—4.5 years more than those in the bottom decile.
The next report highlights why it’s essential the next president strengthens Social Security—and does not “privatize” it and gamble with our retirement in the volatile stock market. In a telephone news conference July 14 sponsored by Americans for Secure Retirement, Tom Neubig of Ernst & Young said most middle-income Americans earning between $50,000 and $100,000 a year are at risk of being unable to maintain their standard of living in retirement.
Neubig’s comments accompanied release of a new study by the Americans for Secure Retirement that finds middle-income earners’ standard of living in retirement could be reduced by as much as one-third. According to the Daily Labor Report (subscription required), the decline in guaranteed pension benefits means more and more workers are increasingly vulnerable when they retire. But the report points out that Social Security provides on average 40 percent of retirement income.
That’s 40 percent more income than many retirees can count on. And while the report makes a great point that future retirees should purchase an annuity using their private savings to bolster their retirement income, the fact remains that without Social Security, the trend of sinking wages and growing income disparity would mean tens of millions of U.S. workers would have to work until they die.
Which is why Sen. John McCain’s disparaging comments about Social Security—he called it a “disgrace“—are so clearly out of touch with the reality of America’s working people.
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Before Social Security we did work until we died. If the system had kept up with the increasing life expectancy the retirement age would be somewhere around 76 years old right now. Social Security was created as an insurance plan for a surviving spouse not a retirement plan for senior citizens. I don’t’ care if someone lives 4.5 years longer than me. If everybody wants to live to 100 they better figure on working until they are at least 85 so lets get to the gym
Dude, you’re wrong about SS not being a retirement plan for Senior citizens. It was intended as a retirement plan and also as a survivors insurance. The original bill, in fact, included Aid to impoverished families and Unemployment Insurance. You want to work on an oil rig or drive a truck or hoss packages in a warehouse or UPS ’til you’re 85, go right ahead. Work ’til you drop dead. The boss and the criminal class in pinstripes on Wall Street and the financial districts, and schmoozing on their yachts in the Carribbean and Mediterranean, will love you for it, but they won’t pay you extra.
Finally dialog with some thought behind it, thank you. Don’t you think that we have to seriously consider making some realistic projections in retirement age? Back in the day most people engaged in more physical activity in the work place. I am certainly not in the same condition as I was 2 years ago working as a mechanic, now I have a desk. It is my responsibility to maintain some degree of health to live a long life if I choose. The mindset that troubles me is that the state will take care of me no mater how I live my life. That is socialism, America is not about socialism it is about achievement. How did this country become so great? From people leaving their native lands and working hard to become successful. They worked through hard times and built businesses and raised families on their earnings. That is the American Dream. That is why so many people still want to come to this country. Maybe I am wrong now they want to come to this country because of the hand outs.
“Social Security was created as an insurance plan for a surviving spouse not a retirement plan for senior citizens.”
Perhaps you would benefit from reading some of the history of the Old-Age, Survivors, and Disability Act. (Initiated in 1935 as the Social Security Act). You can find it at http://www.socialsecurity.gov/history/35actinx.html
Mihalovitch is totally correct about the original reason for SS, and probably more than 100% correct about the behavior of the criminal class called corporate supervisors.
I was wrong, thanks for the info.
Social inequalities that mean economic and cultural poverty, poor health and death must end! An essential and reasonable demand for all working people. But even some Democrats are bitterly opposed to it! Here is an eleoquent article today on this very topic:
“Equality is not good”
Barney Frank and the putrefaction of American liberalism
By Bill Van Auken
18 July 2008
“Equality is not a good thing.” Such a statement stands in diametrical opposition to a long and central tradition in American political thought that—however much it was violated in practice by chattel slavery and the workings of the capitalist system—held equality to indeed be a “good thing.”
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For Thomas Jefferson and the other founders of the American republic, inspired by the revolutionary spirit of the Enlightenment, the equality of man was not just a “good thing” but, as Jefferson wrote in the Declaration of Independence, a self-evident truth.
Here is the full article … worth reading!
http://www.wsws.org/articles/2008/jul2008/fran-j18.shtml
Great article. That is why I am so baffled by organized labor’s love for the Democrats. I have been a proponent of a third party for many years and will continue to vote that way. Thanks
No matter how much people try to take care of themselves many will fall victim to ill health and accident before retirement age no matter what they do.What needs to happen with SS is for the government to stop using it’s funds for everything make everyone pay in no matter what their income level,oh yeah don’t let congress have a separate retirement fund make them use SS and see how fast it gets better.
There have been and are many, many people who have worked hard all their lives with no adegaute sources of income when they become old, or disabled. Many people have had no adequate pensions, as most small businesses never offered them. Social Security has been a tremedous safety net for millions of Americans for many decades. It has been the one sure thing that has enabled millions of people to survive when they were no longer able to work to earn a living. Call me a staunch
Democrat or a Socialist, or whatever, but I truly believe it is our government’s responsibility to protect its citizens when they reach old age or are disabled, ESPECIALLY when they have worked so hard all their lives (as many have and continue to do so). The Republicans want Americans to set up their own retirement plans (privatization), but most plans are based on mutual funds and the health of the stock market. I know many, many people who have lost all of their money in their retirement plans. My spouse has a a very small retirement plan, which is not earning much at all. There are two reasons for this. We cannot afford to put a lot of money in it, and two, with the current state of the economy, the little that is in there is dwindling, not growing. I receive a very small retirement from my employer and Social Security disability.
By having Social Security deducted from our paychecks, it at least guarantees survival income when we can no longer work. Even with my Social Security and pension, I would never be able to survive on my own, and I would need to depend on my spouse’s Social Security ’survivor’ benefits should it come to that.
The bottom line is that, if anything, Social Security should be strengthened, not destroyed, and American citizens, by the fact that they are citizens and pay taxes all their lives are entitled to a decent quality of life from the moment they are born until they die. This is a true definition of a civilized society.