Tuesday, April 26, 2011

Screw the Poor: Social Security Edition

When someone suggests that we raise the age on Medicare or Social Security benefits, it seems like such an intuitively fair solution. Surely it affects all of us equally, right?

As it turns out, this is just another way that the poor are going to suffer in order to save everyone else a tax increase. You see, the poor are living longer but not nearly as long as the rich! The life expectancy for those in the top income brackets has been increasing at twice the rate as that of lower income workers.

Below is the Social Security Administration's calculation for median* life expectancy based on birth year. The figures are given for those in the bottom half of the income distribution and the top half.

Birth yearBottom 50%Top 50%

In the end, low income Americans are subsidizing their richer neighbors. Every year of benefits we shave off further distorts the "fairness". Add to that the fact that many of the low paying jobs are also more physically demanding (a lawyer can eek out a longer career than a coal miner) and you are left with not a fair policy but a cruel one.

*- approximated as "first age at which less than half the sample of male Social Security-covered workers is alive"

ht: Paul Krugman

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