Saturday, June 25, 2016
Are Greedy Elders Taking Advantage of the Young? Not In U.S. - But Perhaps in the U.K.
In a WSJ piece from several months ago ('When Older People Do Better Than The Working Age', March 21, p. A2) a number of claims were made concerning economic advantages reaped by seniors not shared by the young working contingent. All of these bear closer examination, especially in the wake of the Brexit vote (previous post).
According to the authors (Jason Douglas and Jon Sindreu):
"Seniors in the U.S. have recently enjoyed healthier income gains than their younger counterparts, census data show...The average person 65 years and older in the U.S. earns 77% of the income of the average citizen up from 69% in 2008".
Okay, several points, since the earlier claim - preceding this statement is that "the divergence is exacerbating generational imbalances in government pension systems".
In other words, geezers are supposedly profiting at the expense of the youngsters who have to pay into "entitlements" like Social Security to support them. This is confirmed as the authors later write (ibid.):
"As the elderly population increases, younger workers face a rising bill for the extra tax dollars needed to fulfill past government promises to retirees".
So....according to the WSJ duo, it's evidently the fault of the parasitical seniors for bleeding down the pay and resources of the young - keeping them poor and on a losing treadmill.
Of course this is bollocks. Apart from the fact no account is taken that those on "government pensions" had already put in their working years (decades, in fact) - thank you very much - there is no attention paid to the fact what those pensions don't exactly provide a princely sum. To shed needed light we can thank Nancy J. Altman and Eric Kingson, authors of 'Social Security Works' .
As the authors observe (p. 40):
"It is false that most older Americans are on "easy street". A very small percentage are, many more are poor or near poor, while some maintain a modest, middle class life style, often struggling to make ends meet."
In the graphic shown on page 47, the authors present the actual income distribution for the elderly which shows nearly three out of four senior households have incomes below $50,000 - which is not a majestic sum considering health costs, etc.. Not when a senior might be one bad fall from a nursing home stay that will suck up $70k a year. Or, one major medical catastrophe can savage frugal savings. (Dunned by continuous zero interest rates for years.) These are problems the young don't have, and the young always have time to get back on their feet - most seniors do not - say after a major medical calamity.
Anyway the income distributions are indicated a follows:
- 72.5% have less than $50,000 /yr.
- 18.5% have from $50,000 - 99,000
- 5.3% have $100,000 - 149,999
- 2.0 % have $150,000 - 199,999
- 1.9% have more than $200,000
In other words, barely 9 percent of elderly - or 1 in 11, has more than what is regarded as a middle class income. So we (they) are not exactly living on "Easy Street". Other objections to seniors' benefits as being "too much" I already skewered in this blog post, which I invite people to read:
Interestingly, the situation may well be different with respect to oldsters in the U.K., especially in the wake of the Brexit vote. As noted in the same WSJ piece, seniors in the U.K. "earn 89 percent of the average citizen's income". And yet these older folks found it necessary to vote "leave" in the Brexit vote, thereby taking away opportunities in work, travel, and advancement for the 18-34 age set.
As expressed in opinions of some of the younger U.K. demographic in today's New York Times ('Among Young Britons, A 'Bad Feeling' On Result', p. A1:
From Louise Driscoll, a 21-year old barista in London:
"What do we do now? I am very scared!"
And from Lewis Phillips, 27 of London:
"We're the ones that have to live with it for a long time but a group of pensioners have managed to make a decision for us."
From Dan Boden of London:
"Truly gutted that our grandparents have effectively decided that they hate foreigners more than they love us and our futures."
Hannah Shaw, 25, who works at the National Health Service, had this to say:
"I'm already part of a generation stuck in rented property, unable to buy a house. The older generation seems so happy with the result, almost smug like it's some sort of victory completely unaware of the chaos they've caused for my generation. I'm dreading what will happen to employment, worker's rights, the environment and our economy"]
Which are certainly valid worries for those her age, given the narrowing of opportunities expected now that England likely recedes to merely being an island state again.
The outrage of the U.K. youthful segment is perhaps best summed up, NY Times p. A8:
"They have expressed astonishment, anger and despair that their parents and grandparents would seek to limit the travel, exposure to other cultures and opportunities to work and study that being part of the European Union afforded them".
Thus, the Brexit vote effectively took away their acquired European identity, feeling part of a whole culture and continent as opposed to merely citizens of a provincial island nation.
From the level of their rage it will be a long time before they get over it, if ever. Meanwhile, the geezers in the U.K. need to ponder now what they have done by actually limiting the work and educational opportunities of the young which bears no comparison to anything oldsters have done in the U.S.
But to be sure, Neoliberalism has wrought havoc in the States too. But this is not the fault of oldsters who are equal victims of its excesses, in terms of extreme increases in prescription drug prices, further increases in Medicare premiums - while cutting S.S. COLAs, and having to support their offspring and often their offspring, because the Neoliberal state has found it expeditious to retain a service -oriented, low wage society with little or no chance of upward mobility.
The populism expressed in the Sanders' -- and to a lesser extent Trump campaign- have touched on these divisive issues, but there may yet be more unsettling events to come.
An analysis by The Financial Times in the wake of the Brexit vote found that only 36% of 18 to 24 year olds actually cast a vote in the election. In effect, these complacent young voters contributed to their own demise, much as they have tended to do by not turning out in U.S. off year elections.