In France, millions march against the Sarkozy plan to push the age of eligibility for full retirement benefits from 65 to 67. “We can no longer afford” to pay for workers’ retirements at age 65, Sarkozy says. Similarly, rumors swirl in Washington and beyond that Obama’s special Deficit Reduction Commission is tilting toward similar changes for Social Security here.
What a dishonorable way to “reduce government deficits.” It amounts to reneging on commitments made to working people. For many decades they contributed to Social Security, and made decisions about their savings, expecting and counting on the Social Security retirement age promised to them for all those years.
Sarkozy and Obama don’t consider reducing government budget deficits by taxing business or the rich. That would be “inappropriate in a time of economic crisis,” they say, as if they ever did or ever would support it in any other time.
What about postponing retirement benefits in the US? Here’s why that’s “inappropriate in a time of economic crisis.” Millions of Americans will respond to that postponement of retirement benefits by staying in the workforce. Older workers are more likely those with seniority and thus able to keep their jobs. Postponing retirement postpones opening up jobs for the unemployed and the young people just entering the labor force. Postponing retirement is the opposite of a program to reduce unemployment. What the government budget gains by postponing payments to retirees will be lost by having to pay much more in unemployment benefits (plus all the other social costs of unemployment) than would have been necessary if unemployed people had gotten the jobs retirees left.
One of the reasons that millions of young French people have joined the mammoth demonstrations against Sarkozy’s plan to postpone retirement is this: they have recognized that their chances to find jobs are directly damaged by his plan.
Here’s another reason why it is “inappropriate” to do what Sarkozy is attempting and what Obama seems to want to follow. If US workers see the government taking away one Social Security benefit by postponing retirement eligibility, millions will conclude that they can no longer count on Social Security for their livelihoods after a lifetime of labor. They will start to save much more money to make up personally for what the government’s retirement system is taking away. That will further reduce consumption expenditures by Americans, leading US employers to lay off the workers they no longer need to produce what American consumers no longer buy. It will thus deepen the recession and worsen unemployment.
Here’s still another reason. Retirement provides millions of people with time to do all sorts of important tasks with significant economic consequences. For example, retired people provide their families and others with baby-sitting and child-care services that are crucial in a country that provides too little of these and often at unaffordable prices. Already squeezed young families with children will lose such services when grandparents have to wait additional years before retiring with Social Security benefits. That loss has serious economic costs attached. To take another example, retirees provide crucial staffing as volunteers in countless social service agencies across the country. US presidents have been urging such volunteer efforts for years as an urgently needed supplement to the insufficient services government provides for people. Postponing retirement will deprive those agencies of millions of such volunteers at just this time of crisis when need for them is greatest. Where is the accounting for the social costs of depriving these agencies of the volunteers they rely on?
A smart as well as decent policy would be to lower the retirement age. Here’s how and why. Suppose folks between 2 and 3 years below the current retirement eligibility ages were provided with the following incentive: you can retire and get your Social Security retirement benefits now if you agree to perform 10 hours per week of work in a social service agency you can select from a long list of options. Your obligation would last for just as long as the difference between your early retirement and the traditional retirement age. This would free up many paying jobs for the unemployed and new entrants into the labor market, and it would increase staffing in social service agencies.
The attack on Social Security is another skirmish in the war on the US working class. It tests, yet again, how far that class can be pushed before it begins seriously to push back. The government, having bailed out the rich, now needs to pay for the bailout by taking money from average people. Pushing back the Social Security retirement age is one way to do that.
Imagine if Americans took a page from the French working class’s book. Imagine if millions went into the streets to say no, this crisis has already hurt us more than enough. Suppose those millions charged the government with bailing out those most responsible for the crisis. And just think if, with quiet determination, Americans told the government that enough was enough. Henceforth, they might then say, government policy would be switched into the reverse of what it has been: from now on, average people would be bailed out and the rich would pay the cost.
The movement toward this historic reversal is underway in France. It is time for us to catch up.
Richard D. Wolff is a Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York. He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications. Check out Richard D. Wolff’s documentary film on the current economic crisis, Capitalism Hits the Fan, at www.capitalismhitsthefan.com. Visit Wolff’s Web site at www.rdwolff.com, and order a copy of his new book Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It.