Monday, July 5, 2010

Being Tired and Retired

Here it is the 5th of July and the 4th is over. Watched the fireworks and cooked brats on a charcoal grill like a good American. Listened to Bruce Springsteen sing "Born in the USA" and Satchmo sing "America the Beautiful." Of course I also watched a Spaniard beat a Czech in the Wimbledon tennis final in England followed by a little watching of bicyclists from all over the world racing across Belgium in the Tour de France. Got to the baseball thing in the afternoon and had the lump in the throat when Wayne Messner sang "The Star Spangled Banner." Also got a lump in the throat when the Cubs went on to lose 14-3, but that was a lump of a different sort altogether.

On the 4th of July most Americans come together to celebrate that which makes us a nation and to be proud of it. Then on the 5th of July we have all gone our ways again and that which divides us becomes apparent once again. Our nation and our world have been in a serious financial downturn for more than two years now. The unemployment rate in the U.S. continues to hover just below 10%. The stock market continues to make people, dependent on its health, wonder if they'll ever be able to retire and public retirement systems wonder how they're going to pay for the retirement of a generation of aging citizens who are expected to live very long lives. The Baby Boom generation is becoming the Retirement Boom generation.

In the U.S. the age for full Social Security benefits has been raised to 67. You get a bump in benefits if you wait until you're 70. In Germany, the age for state pensions has been raised to 67 as well. In the UK the traditional age has been 60 for women and 65 for men. Now the age is being raised to 66 for all workers and there is talk of raising it to 70 eventually. Meanwhile the French public is up in arms because their retirement age has been raised to 62. What a hardship.

There are a number of issues here. At one time a person could expect to work for a company for most of their adult life and that company would provide a pension check for the rest of their lives. Mind you, most people only lived until their early 70's and so the burden wasn't as large as it currently is. Then companies, intent on cutting costs, set up 401K plans for their employees and the burden for providing for eventual retirement began to shift from employer to employee. Didn't put enough into your retirement savings? Better hope the Social Security system remains solvent, and the Republican Party doesn't manage to privatize Social Security or allow opting out or doesn't do away with it altogether. For that matter, does anyone actually believe that you can survive in a reasonable fashion on what Social Security pays?

There is much ado in the press recently about the outsized pensions of government employees and how they are sucking up the resources of the states, counties, and municipalities of America. A sizable number of these government employees who are receiving these pensions are educators who dedicated their lives to teaching other people's kids, for peanuts, compared to what they would make working in private industry. Part of the package used to attract people to the profession has always been the reasonable retirement package. Now it turns out that huge numbers of people don't want to fund these pension systems. Some of them are on the verge of bankruptcy, and a lot of the people who paid into these systems, depending on them did not pay into Social Security. If their pensions dry up, they have no Social Security coming in to fall back on.

Social Security, government pensions, school teacher pensions all are partially funded by employee contributions and partially by employer contributions. In the case of the latter two, the employer is the government and so that means taxes pay for at least part of these pensions and that seems to stick in the craw of a lot of Americans who don't want to pay for someone else's retirement. In the case of Social Security there are a good many wealthy Americans who don't worry about their own retirement and it seems to stick in their craw that they are subsidizing Social Security for the working class through their own payments into the system.

What we're talking about here is that an awful lot of Americans have a "What's in it for me" approach to life. People are perfectly willing to contribute to their own welfare, but the idea of a societal welfare that must be subsidized through taxes makes people angry. It brings out a "Screw you. I got mine. Get your own" kind of response. Frankly, unless the rich are willing to wall themselves off in gated communities while the masses of elderly are tossed out in the streets to fend for themselves this is a bit of a short-sighted approach to life.

Furthermore, the less able people are to retire and exit the workforce, the fewer jobs will be around for the younger citizens to acquire in the workforce. Jobs are finite. This in turn begs the question, what if companies didn't export all the jobs to third world countries in order to increase their already massive profits? Would there be more people to buy stuff, thus providing more jobs to produce stuff, more people to pay into the system, and thus more funding to allow people to retire at a reasonable age?

Perhaps it is just the old liberal in me, but I have to think that a society has to provide certain basic necessities in order to thrive. It has to educate its citizens. Everybody has to help pay for this. An educated society is in everybody's best interest. We have a duty to see that every citizen can receive adequate healthcare. Everybody should help pay for this as well. The alternative is paying for the unhealthy when they are no longer able to care for themselves due to lack of healthcare. Finally, we have a duty to see that contributing citizens can be assured of a reasonable standard of living when they are no longer able to contribute, due to advancing age. We all have a duty to see that this is funded as well. It's called civilized.

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