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SURVIVING SOCIAL SECURITY
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This week I’ve decided to worry about jobs, which seems to be the thing to do
if you want to be in the swim and part of the scene. I personally don’t have
one and I get along fine, but I can understand how some people are concerned
when they don’t have one and worry quite a bit about getting one. If this
sounds a bit unfeeling, that’s just me being funny again and is not meant to be
taken seriously. I worked at one job or another for more than forty years and
I haven’t forgotten any of it.
If I were to lose interest in the question of unemployment, one man whom I
read regularly would be sure to wake me up about it. This is John Crudele, who
writes a newspaper economics column twice a week and never fails to deal with
the employment question. He has never once professed himself to be satisfied
with the level of employment in this country. That is because he has never
been able to bring himself to believe the employment statistics produced by the
government Bureau of Labor Statistics. There are too many “seasonal
adjustments” and too many presumptions about the number of businesses that have started
up and hired workers, and other accounting maneuvers that bother him greatly
and undermine his faith in the system.
So whatever figures the government may put out, Mr. Crudele is likely to
insist that they are under-reporting unemployment and it’s actually much greater
than the figures show. I’ve been reading this for years, so that finally I
overcame my reluctance to write to newspapers and sent an e-mail to him as
follows:
Dear Mr. Crudele:
I’m afraid I don’t understand the furor over unemployment. Out here on Long
Island where I’ve lived for the last five years, every major store has had
a Help Wanted sign permanently on display. This means Wal-Mart, Home Depot,
Kohl's, supermarkets, etc., etc. The jobs they offer may not be the greatest,
but still they’re jobs and they’re going begging.
Also the roads continue to be jammed with traffic, practically all of which
is job-connected for sure. Both these conditions were the same in Westchester
County, where I
used to live before coming here.
Mr. Crudele answered me the same day. He said things were the same in the
New Jersey suburb where he lived, but even so he heard from a lot of recent
college graduates complaining that they couldn’t get jobs, and also remained
convinced that there was a large cohort of people who had grown discouraged looking
for work and had taken themselves off the labor market. As for the service
jobs being rejected, he thought that came from people being used to high pay
and being unable to adapt to lower pay. They preferred unemployment
compensation.
Okay. November will tell us who’s right. If there really is a job shortage,
George Bush will go down in flames. John Kerry will take over and by
borrowing money will create jobs, only they’ll mostly be for drug counselors and case
workers, as I’ve said before. Government jobs, in other words. The modern
equivalent of the leaf-raking and shovel-leaning that Roosevelt and Harry
Hopkins provided for the clients of the WPA in the Great Depression.
Accepting what Mr. Crudele says about the problem of low pay, it’s clear that
not just any jobs will satisfy the jobless, they will have to pay enough to
at least lift the worker above the poverty line. The other day a discouraged
worker was quoted in the local paper as saying “Yeah, I’ve been offered jobs,
but they all paid $10 an hour and that doesn’t make it on Long Island”.
Well, maybe not, but there is a way to fix it. A person making this kind of
money, especially if he/she has any dependents, will pay a minimum of income
tax and may even pay a negative one through receiving an Earned Income Credit.
However there will still be an immutable pay reduction in the shape of Social
Security tax. At $10 an hour this amounts to $3,182 altogether. (The rate for
2004 is 7.65% for the employee and the same for the employer). If it were
included in his paycheck instead of going to the government, it would give the
worker an extra eight weeks pay yearly. And that’s just what it should do.
Clearly a man making $10 an hour needs money now, not in the sweet by and by.
Now, when his children tell him they want some butter to put on their bread, we
tell him to answer “Sorry, kids, Social Security says that I’m not to use my
money today, but instead I have to save it for my old age, so that I won’t be
a burden on my children. Doesn’t that make you feel better? Isn’t that
better than...butter?”
We pass over the kids’ answers. After all, children have such a narrow
horizon they can’t visualize 2040, when Dad will be beginning to dodder and Social
Security will come to the rescue. This is very shortsighted of the children.
Or is it? Is it perhaps only common sense that tells them it’s ridiculous to
concentrate obsessively on saving for the future while the present goes to
hell? Can’t there be a balance?
Of course there can. We can remove the iron collar of the SSA from the
working people by creating a class of low-pay employees who are forgiven their
contributions until (a) they reach a pay level at which they can afford to start
contributing again; and (b) they reach an age at which it becomes necessary
for them to contribute if they are to receive a worthwhile benefit when they
retire. Actuaries can work out these questions, on the understanding that people
will only be phased back into the SS system in such a way as not to penalize
them for improving themselves and climbing into a higher bracket. This means
their restoration to the SS system should not entail a return to the level of
take–home pay that caused them to drop out in the first place.
Dropping temporarily out of the system should be a matter of choice. If a
parent thinks, like the creators of SS, that it’s more important to keep
squirreling money away for a happy old age than to give in to unreasonable demands
for butter from his children, that is his right. He will, after all, be
complying with the original intent of the Act as it was written. Where the
excitement about SS came from has always been a mystery to me. It was obviously only a
device to force people to save for their dotage whether they wanted to or
not. They didn’t get one extra penny in their pockets from it, but the way they
carry on about it, you would think that Roosevelt and company had given every
American 100 shares in a newly discovered gold mine. This belief is so
strong no politician has ever tried to discourage it. They glide right over the
fact that the money put in comes out of the worker’s paycheck, very much
including the equal share the employer pays into his account, which he would
otherwise have included in said paycheck.
Doing tax returns I’ve found people love “forced savings”, i.e., refunds.
Asked about more take-home, I recommend against refunds. No takers. I don’t
expect many for this idea either.
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