Pundits on the right broadly proclaim that since life expectancy has increased, it is a natural conclusion that Social Security qualification age should increase, as well. But once again, their science, and their math, is off.
A cursory examination of numerical data does reveal a sharp increase in American life expectancy at birth from 1850 to 2000, but when life expectancy is evaluated after the attainment of adulthood, the numbers are eye popping. In 1850, average newborns could expect to live into their late 30’s. In 2000, that number had doubled as the newborns could, on average, look forward to life into their mid-70s.
But if data is measured from a rough starting point of adulthood, 20 years of age, the average life expectancy of men and women in 1850 was almost 60 years. By 1940, just a few years after Social Security became law of the land, a 20 year old woman could expect to live to 70; a 20 year old man, 67. In 2000, average 20 year olds could expect to live into their late 70s.
Simply put, the life expectancies of people who had reached working age did not remarkably increase over 150 years. Most salient is the graphic example of the 60 year old male in 1850 compared to his 2000 counterpart. BOTH could expect to live into their 70’s and only since 1980 has that number approached 80 years of age.
Further, in the Social Security Amendments of 1983, Lawmakers increased the age of obtaining full Social Security benefits via a graduated table of implementation. If you were born in 1960 or later, you will not receive full Social Security benefits until you are 67 years old.
If this leaves you scratching your head just a bit, here is a snapshot: A woman who was 60 in 2000 can expect to live to be a little over 83 years of age. Qualifying for full Social Security benefits at 65 ½, she can expect approximately 18 years of Social Security. The 40 year old woman in 2000 would qualify for full retirement benefits in 2027 at 67 years of age. Her life expectancy, (based on projecting the life expectancy table gradient gradually upward in following historical trend lines), would be approximately 85, thus also projecting 18 years of Social Security benefits.
But life expectancy is NOT increasing for some Americans.
For some sub-groups of the American population, there has been a marked decline in life expectancy over the past generation. For both white men and white women who have not completed high school, their average life expectancy has decreased by 4 years since 1990.
“…Researchers said they were baffled by the magnitude of the drop. Some cautioned that the results could be overstated because Americans without a high school diploma — about 12 percent of the population, down from about 22 percent in 1990, according to the Census Bureau — were a shrinking group that was now more likely to be disadvantaged in ways besides education, compared with past generations.
“…the group was now smaller, but said the magnitude of the drop in life expectancy was still a measure of deterioration. “The good news is that there are fewer people in this group,” he said. “The bad news is that those who are in it are dying more quickly.”
Most notable is that lower education levels translate to lower earning capacities, and when these folks do retire, Social Security is likely to be their primary income.
The Simple Fix
After $110,100 in earnings, the taxpayer pays no more in Social Security taxes for the year. That means CEO Mark Parker of Nike, who makes approximately 96k a day, would be done paying into Social Security by his first coffee break on his second working day in January. Social Security’s solvency through the rest of the century could be assured if this cap was cracked or even snapped wide open.
The working class has earned it and deserves it.