June 16, 2005

Retirement Ages, Once More

Well this is an angle I've never considered:
In fact, Ghilarducci argues, allowing the pension system to deteriorate serves a long-term interest of business: avoiding future labor shortages when the baby-boom generation moves into retirement. "All this retirement policy is really a labor policy," she asserts. "It's motivated by these experts who say, Hey, wait, we're going to need to do what we can to encourage people to work longer. A whole range of economists and elite opinion makers is talking about a labor shortage where, God forbid, wages would increase. That's what they're worried about--making sure there isn't a corporate profit squeeze, that skill shortages and upward wage pressures are checked."
Now I've never heard any experts say this, and I pay fairly close attention to the debate here. But as conspiracy theories go, this one makes sense! Speaking of which, though, for a while I've wanted to bring up the strange case of the "notch babies," namely, those people born just after January 1, 1917. Thanks to some fiddling with the Social Security benefit formula, the "notch babies" were all scheduled to receive substantially smaller benefit cuts than those born just prior to that date. Everyone expected that these poor workers would all have to work longer, past their nominal retirement age, and hence, would suffer poorer health than their predecessors. As it turned out, though, the "notch babies" all enjoyed much better health than those born six-months earlier. Perhaps, the theory goes, this was because many of these "notch babies" responded to their benefit cuts by working longer or finding part-time jobs, which helped them avoid isolation and inactivity, both of which tend to be unhealthy things.

Now that's not an argument for cutting Social Security benefits. Nor is it an argument for extending the retirement age: working later into life isn't healthy for all workers, especially if, say, you're shoveling coal or welding stuff. What it is, though, is an argument for finding ways to let seniors work longer or take on part-time jobs if they want, which could in turn have all sorts of splendid little health benefits. Figuring out how to eradicate age discrimination, along with setting up worker re-training for seniors, and even some health care reforms, could do the trick. This way the needs of the elderly and the needs of Ghilarducci's dastardly "experts" who want to get people to work deep into old age could become aligned, and all would be well in magic-happy land.
-- Brad Plumer 3:53 AM || ||