Cash for Geezers?

[zadok]

Lower the Retirement Age to 55 Now!

One 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-many-people-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. He’s 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 Party’s Joseph Kasozi).


Earlier this month, Okwakoi called on Parliament and President Museveni to lower the age of retirement for government workers (the country’s 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 he’d 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, that’s exactly what happened – and it began the creation of a blue-collar middle class.


It’s 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 now-discredited 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 white-collar 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.”


It’s 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.


http://www.thomhartmann.com/2009/08/...age-to-55-now/

[don]

Re: Cash for Geezers?

Reality, however, is running in the opposite direction. (4% of French Geezers are still working past retirement age- see below. Damn Frogs!)

September 3, 2009

A Reluctance to Retire Means Fewer Openings

By CATHERINE RAMPELL and MATTHEW SALTMARSH

To the long list of reasons American companies aren’t hiring — business losses, tight credit, consumer retrenchment — add the fact that many of their older workers are unable, or afraid, to retire.

In other parts of the developed world, people are retiring as planned, because of relatively flush state and corporate pensions that await them. But here in the United States, financial security in old age rests increasingly on private savings, which have taken a beating in the last year.

Prospective retirees are clinging to their jobs despite some cherished life plans.

As a result, companies are not only reluctant to create new jobs, but have fewer job openings to fill from attrition. For the 14 million Americans looking for work — a number expected to rise in Friday’s jobs report for August — this lack of turnover has made a tough job market even tougher.

Consider Barbara Petrucci, a dialysis nurse who had expected to stop working soon, or at least scale back to part time. Now that her family savings have been depleted by market declines, she expects to stay on the job for a long, long time.

“Retirement is kind of an elusive dream at this point,” says Ms. Petrucci, 58, who works at an Atlanta hospital while her retired husband, Ned, 61, interviews for jobs (unsuccessfully, so far). “We tease at work about someday having to go around at the hospital with our walkers.”

The diverted life plans of families like the Petruccis are an unintended economic consequence of the nation’s sprawling 401(k) plans. These private retirement savings vehicles, designed 30 years ago as a supplement to traditional corporate pensions, have somewhat haphazardly replaced the old system, like an innocuous weed that somehow overgrew the garden.

As is apparent in this downturn, the economic effects of such an ad hoc system can be perverse. In boom times, when companies need more workers, the most experienced employees may decide to retire, taking comfort in their bloated 401(k)s, whose values typically fluctuate with the financial markets.

Today, the reverse is happening in the first deep recession since the new accounts became so pervasive. A Pew Research survey scheduled for Thursday release found that nearly four in 10 workers over age 62 say they have delayed their retirement because of the recession. (Though the data omits some people who have retired and includes some who are still working, the Social Security Administration said that about 2.3 million people that age started collecting benefits last year.)

“One unappreciated side effect of the 401(k) system is that it’s a sort of reverse automatic stabilizer,” says Teresa Ghilarducci, an economics professor at the New School.

The recent retirement losses have prompted policy makers to discuss whether Americans need a stronger social safety net, not just in health care and unemployment benefits, but in retirement as well.

Economists say there are advantages to reducing the financial risk for individuals. Pooling investments, in some cases, allows workers to switch jobs more easily and helps lower fees associated with investment decisions, for example.

Alternatives include creating incentives for saving and for less risky investments through tax laws or other regulations. The Obama administration has proposed an opt-out retirement savings system, for example. And even before the crisis, some states developed plans for pooling private savings into voluntary, portable retirement accounts.

Though their pension systems may be strained, people in many countries with stronger safety nets are still exiting the labor force in lockstep despite the global recession. Last year in the United States, almost a third of people ages 65 to 69 were still in the labor force; in France, just 4 percent of people this age were still working or looking for work.

After all, Europe isn’t just the land of “socialized” medicine. It is also the land of “socialized” retirement plans, and like other automatic stabilizers, pensions help cushion the blow of an economic crisis.

Retirement income typically comes from a combination of three buckets: state pensions, corporate pensions and individual arrangements. In many other industrialized countries, that first bucket — state pensions — supports a large amount of retirees’ income.

The typical American receives just 45 percent of his preretirement wage through Social Security, according to the Organization of Economic Cooperation and Development. By contrast, a worker in Denmark, which has one of the most comprehensive and generous retirement arrangements in the world, can retire with a state pension that is 91 percent of his salary.

“The financial crisis hasn’t affected me,” says Jens Erik Soerensen, a 63-year-old in Hellerup, Denmark, who works as a researcher at Chempilots, a Danish company that develops polymers for use in the medical device industry.

Mr. Soerensen has calculated that when he retires, the combined disposable income that he has with his wife (Lone, also 63, who retired this year from her job in TV production) will fall by about 20 percent. The couple will also continue to benefit from universal health coverage.

“I think we can survive without changing our lifestyle, at least until 75,” he said. After that, he might have to dip into personal savings.

Of course, such a system comes with tradeoffs. To help pay for generous state pensions, Danish workers have one of the highest tax burdens. The population is also aging, meaning that there will be fewer working people to pay for the pensions and care of a graying society.

In response, some nations have been trying to encourage people to stay at work longer. In France, suggestions to raise the retirement age above its current level of 60 have met fierce opposition from unions, although the government intends to push ahead. Britain has had a bit more success, announcing plans to raise the retirement age to 68, from 65 — in 2044.
Along with raising the retirement age, some European countries have been shifting more financial risk to individuals.

In the United States, where the practice is decades old, the question is whether people can be freed from making their own financial decisions, an act they may not feel qualified to do and may not want to do.

One study found that nearly a quarter of Americans ages 56 to 64 had more than 90 percent of their 401(k) balances invested in stocks instead of bonds, against financial advisers’ standard advice for people nearing retirement age.

“Employees are just not capable of making these decisions,” said Rick K. Shapiro, a member of the army of financial planning professionals that America’s private retirement system (and private health care and college education financing systems) has spawned. “Maybe they can learn, but they’re distracted, and they’re not incented to learn until the thing blows up.”

Even conscientious investors — like the Petruccis, who keep an updated spreadsheet of their investments — lose money.

“We thought we were conservative,” said Mr. Petrucci, noting that he and his wife lost about 35 percent of their life savings in the crisis and have made only a little of it back.

Still, the American preference for self-reliance, instead of more socialized financial protections, remains strong, even among those who lost big.

“I don’t want to depend on anybody else in my retirement,” Mr. Petrucci said. “Not family members, not our children, and certainly not the government, for that matter.”

http://www.nytimes.com/2009/09/03/bu...K0sgmWR9OVuXQA

[Starving Steve]

Re: Cash for Geezers?

The putz from Princeton doesn't want to cut labour a break. He wants higher unemployment to keep wages down. This in turn will put a lid on inflation. That allows the putz from Princeton to keep printing money. The printing bails-out the govn't and the banks. And the geezers can die-off, to keep a lid on healthcare costs; this helps enrich the private insurance companies.

You have to understand REPUBLICAN PARTY ECONOMICS, and write-down exactly what these rats are doing. Don't trust the economists or historians in universities to record what is happening now. Don't trust the American media to report what is happening.... Each of us will have to record the history of this depression, day-by-day, as it is unfolding before our eyes.

Yes, Alan Greenspan and his deciple, Ben Bernanke engineered this depression. In that way, for sure, this really is a conspiracy.

[Spartacus]

Re: Cash for Geezers?

[BigBagel]

Re: Cash for Geezers?

I myself am approaching geezerhood but I find the proposal crazy. America is basically a gerontocracy. There is a massive wealth transfer from younger workers to geezers. Now we have a proposal for millions more to get their monthly government check. When will the looting end? America is already going to have a difficult time meeting it's obligations to it's aging hypertensive, obese, diabetic, renally impaired population.

[jtabeb]

Re: Cash for Geezers?

Don't trust the American media to report what is happening.... Each of us will have to record the history of this depression, day-by-day, as it is unfolding before our eyes.

I put about 300Meg/week on my computer doing exactly this. Great advice. I just keep every meaningful article that I come across.

[don]

Re: Cash for Geezers?

When I first read the title of this thread I thought it was a tie-in with the Ukrainian body parts biz :eek: Turns out in a way it is ;)

[zadok]

Re: Cash for Geezers?

[Master Shake]

Re: Cash for Geezers?

In Uganda, Joseph Okwakoi gets it. He’s 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 Party’s Joseph Kasozi).

LOL! We should follow the lead of freaking Uganda?

This argument also assume that the younger workers have the necessary skill sets to do the jobs the older workers are leaving. I don't think so.

[don]

Re: Cash for Geezers?

Book Recommendation:

Hans Fallada's Little Man, What Now?

Set in Weimar, it portrays through the central character the unwinding of society under the economic pressures of the postwar world in Germany. Here's a couple of Amazon comments:

The story of the life of the little man Johannes Pinneberg and his love in the Weimar Republic (Germany before Hitler). It accurately presents the hardship of people in the worldwide economic crisis in the 30ies. Pinneberg is a salesman who believes himself above the proletarians. He strives for a bourgeois kind of lifestyle. But after marrying his struggle for survival begins with his social decline. Pinneberg learns: you have to work like an animal or you won't work at all. The book is a story about money, hardship and the constant threat of failure.


This is an excellent book. I read it in 1934 when it was selected as a Book of the Month Club selection. It has continued to haunt my mind as I watched the rise of the National Socialist party rise to power in Germany. It explained the plight of the German psyche after the Treaty of Versailles and the human cost of the repatriation demands creating the human bondage. It was a great lesson learned by the United States and other allies in creating the Marshall plan for the allies former enemies. I was incredulous on learning that Amazon.com was able to provide this most out of date novel.

[cjppjc]

Re: Cash for Geezers?

Book Recommendation:

Hans Fallada's Little Man, What Now?

Set in Weimar, it portrays through the central character the unwinding of society under the economic pressures of the postwar world in Germany. Here's a couple of Amazon comments:

The story of the life of the little man Johannes Pinneberg and his love in the Weimar Republic (Germany before Hitler). It accurately presents the hardship of people in the worldwide economic crisis in the 30ies. Pinneberg is a salesman who believes himself above the proletarians. He strives for a bourgeois kind of lifestyle. But after marrying his struggle for survival begins with his social decline. Pinneberg learns: you have to work like an animal or you won't work at all. The book is a story about money, hardship and the constant threat of failure.


This is an excellent book. I read it in 1934 when it was selected as a Book of the Month Club selection. It has continued to haunt my mind as I watched the rise of the National Socialist party rise to power in Germany. It explained the plight of the German psyche after the Treaty of Versailles and the human cost of the repatriation demands creating the human bondage. It was a great lesson learned by the United States and other allies in creating the Marshall plan for the allies former enemies. I was incredulous on learning that Amazon.com was able to provide this most out of date novel.

You read it in 1934! If I may be so rude, how old are you Don?

[ThePythonicCow]

Re: Cash for Geezers?

You read it in 1934! If I may be so rude, how old are you Don?

Don stated he was quoting a couple of Amazon comments here.

But my first reaction was the same as yours .

[don]

Re: Cash for Geezers?

It does open up some options.

The Sage...

or

The Old Fart...:eek:

(I, too, wondered- how old is that reviewer!)

[cjppjc]

Re: Cash for Geezers?

Don stated he was quoting a couple of Amazon comments here.

But my first reaction was the same as yours .

Good job PC.