Business The truth about "greedy" older people and the "war"...

The truth about “greedy” older people and the “war” between generations

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CHICAGO (Reuters) – Former United States Senator Alan Simpson summed up the argument well: seniors fighting social security benefit cuts were nothing more than “greedy gluttons” robbing young people “who are going to be gutted”. The memorable phrase of the Wyoming Republican of 2012 is a good example of the colorful language of the so-called intergenerational war: facing generations against each other with zero-sum economic arguments.

FILE PHOTO: Fishermen gather at a mooring during sunset in Yevpatoriya, Crimea, October 23, 2019. REUTERS / Alexey Pavlishak // File photo

That kind of rhetoric might be useful for some politicians, but it is economic nonsense. Families do not live in economic silos, separated from each other, and some recent evidence shows that a large segment of the elderly population is all but greedy. In fact, they are struggling to cover basic living expenses, and economic pain also affects the younger members of the family.

Consider the results of a recent survey conducted by AARP. (bit.ly/38hFuTn) It was found that one third of middle-aged adults with at least one living parent (32%) provide them with financial support, usually for living expenses, such as food and medical costs. More than half of the middle-aged adults (54%) provided $ 1,000 or more to their parents in the past year; Within that group, 34% provided assistance of up to $ 5,000 and 13% provided assistance of up to $ 10,000.

“I think some people have an image of the previous generation that lives on top, depleting the coffers of the United States by spending their Social Security on cruises to the Bahamas,” said George Mannes, senior editor of AARP magazine. “But many older people really live near the bone.”

The results of the AARP survey are disturbing, but in reality they only hint at the number of older households facing financial stress.

A more detailed measure is the Elder Index, produced by the Institute of Gerontology at the University of Massachusetts Boston (bit.ly/2SyIbcE). The index measures the cost of living of older people living as a couple or alone, but independently of children. It is based on the typical budgets of the elderly.

“It’s very stripped, it doesn’t include anything that anyone considers remotely unnecessary,” said Jan Mutchler, a professor of gerontology at the university. That means expenses such as food, housing and public services and minimum levels of transportation, and of course, health care costs.

The index is calculated for each county in the United States, which means that it takes into account regional variations in the cost of living.

The university recently released new data for 2019, and shows that 50% of Americans over 65 who live alone have incomes that are below the index; In other words, they lack the resources to pay for their basic life needs. For couples, who generally benefit from two Social Security checks and are more likely to have other income, the comparable figure is 23%.

Those figures are shocking, and they are much more serious than the federal poverty measure used to establish eligibility for many state and federal assistance programs. For example, a measure used by the US Department of Health and Human Services. UU. He defined poverty for single people last year with annual income of $ 12,490 and $ 16,910 for couples (bit.ly/31JuDPI). That translates into poverty rates of 18% for singles and 5% for couples, much lower than the Elderly Index suggests.

These elders live in what Mutchler calls a “gap.” “They are not poor enough to be considered poor by the federal government, but they fall below what they need to survive and are struggling.”

REMEDIES

The best way to relieve this economic stress is by strengthening our two key social security programs. “Strengthening and stabilizing Social Security and Medicare is very important,” said Mutchler. “And then, we must strengthen and expand support for the housing needs of the elderly.”

To which I would add, not only to the elderly today. The strengthening of our social security programs will be even more beneficial for young people, who will reach retirement with smaller retirement accounts and much less likely to claim a traditional defined benefit pension. [nL2N27A0PP] (reut.rs/38i4cTL).

Social Security reform has been a hot topic in the presidential campaign this year, with Democrats competing for pole position as defenders of expanded benefits.

A review of the positions of candidates in Social Security reform by the Center for Retirement Research at Boston College (bit.ly/2tU74r6) found that several Democrats support the general expansion of benefits, and a greater number which favors increases aimed at vulnerable older people. The latter include increasing the special minimum Social Security benefit, which aims to keep low-income workers out of poverty in retirement; expand Social Security benefits for caregivers; and increase benefits for surviving spouses.

Specific increases enjoy broad bipartisan support. A 2016 commission on retirement security organized by the Bipartisan Policy Center (bit.ly/2vmBXok) approved several such ideas.

“It is completely appropriate to focus on parts of the population where current benefits are inadequate,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center. “People with low incomes can work a long career and still get benefits below the poverty line, or not much higher. We have to make sure that older people who have worked for many years are not forced to live in poverty during retirement. ”

President Donald Trump ran in 2016 opposing any cuts to Social Security benefits and promised to “protect” Social Security in his recent speech on the State of the Union. But he also recently hinted that he could press to cut benefits in a second term in an interview with CNBC. And its budget plan for 2021, presented this week, contains a series of cuts to social security programs and safety nets, including the most stringent eligibility requirements for the Social Security disability program. [nL1N2AA0HI] (reut.rs/2OMqXaH)

No moderator has raised a question about Social Security to the candidates in any of the presidential debates so far. Perhaps they think it is a topic of interest only to geezers, or “OK ​​boomers.”

But they could be wrong.

For more information on intergenerational dependence, check out my podcast interview this week with Jan Mutchler of the University of Massachusetts Boston. (bit.ly/2uJ6DA2).

Mark Miller’s report in Chicago; Edition by Matthew Lewis

Our Standards:The principles of trust of Thomson Reuters.

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