Want to Stimulate Economy? Lower Retirement Age to 55...

[Ben]

Want to Stimulate the Economy? Lower the Retirement Age to 55 Now!

by Thom Hartmann
One of the most powerful forms of stimulus we could apply to our economy right now would be to lower the current Social Security retirement age from the current 65-67 to 55, and increase the benefits back to where they were in inflation-adjusted 1960s dollars by raising them between 10 to 20 percent (so people could actually live, albeit modestly, on Social Security).

The right-wing reaction to this, of course, will be to say that with fewer people working and more people drawing benefits, it would bankrupt Social Security and destroy the economy. But history shows the exact reverse.

Instead, it would eliminate the problem of unemployment in the United States. All those Boomers retiring would make room in the labor market for all the recent high-school and college graduates who are now finding it so hard to find a job.

If enough Boomers left the job market, it would even flip the current dynamic of too-many-people-chasing-too-few-jobs upside down, and create a tight labor markets. Tight labor markets drive up wages.

And as wages go up, tax revenues – which are paying for Social Security (among other things) – would increase.

Additionally, these new-into-the-workforce people can then pay off student loans, buy new houses and cars, and otherwise drive the economy from the bottom up. Which will further increase tax revenues further strengthening the Social Security system.

To further tighten the job market and drive up wages (and tax revenues), modify the Fair Labor Standards Act of 1938 – which tightened the labor market and reduced unemployment by establishing the 40-hour work week – to include all hours worked by a person. We could also, like in France, drop the 40-hour maximum-workweek threshold to 35 hours (used by the Mitterrand government to successfully lower unemployment and stimulate the French economy). A final step would be to emulate the rest of the developed world and require by law that every worker get at least two to four weeks a year of paid vacation – further tightening the labor market.

In Uganda, Joseph Okwakoi gets it. He’s the president of the National Youth Council in that nation, a group that has considerable political power (and an affiliated Member of Parliament, the Central Youth Party’s Joseph Kasozi).

Earlier this month, Okwakoi called on Parliament and President Museveni to lower the age of retirement for government workers (the country’s largest employer) from the current 60 years of age to 55. This single act would instantly create about 15,000 job openings in the country, which could be filled by currently unemployed young people.

President Museveni replied that he’d consider it seriously, pointing out that, “The retirement age was actually 55 when we came but because of manpower shortage we put it at 60.” Now that the manpower shortage has eased, wages are falling, and unemployment is rising, he noted, “We shall study it.”

What Joseph Okwakoi understands is that there is a marketplace for labor. When the supply of labor exceeds demand, the price of labor (“wages”) falls. On the other hand, when the demand for labor is at or greater than the supply of labor, the price of labor – wages – increases.

This is the main reason why the labor movements of the 18th and 19th centuries fought so hard against child labor; they knew that if children were removed from the labor marketplace, then the supply of labor (the number of people available to work) would decrease and the price of labor (wages) would increase. And, sure enough, that’s exactly what happened – and it began the creation of a blue-collar middle class.

It’s also why the labor movement pushed for an 8-hour day and a 40-hour maximum workweek. By reducing the amount of labor available from each worker from the average 60 hours a week or so people were working before 1938, the labor market tightened up, increasing the number of people who could be employed and raising wages.

Of course, this is the exact opposite of American labor policy ever since the Reagan/Bush/Clinton/Bush era. Reagan drove down wages by busting unions (which tighten a labor marketplace); declared an amnesty for millions of then-illegal immigrant workers to increase the supply of labor and depress wages (particularly whacking the carpenters and other construction trades unions); and began the process (completed in a big way by Bill Clinton with NAFTA and GATT/WTO) of dismantling tariffs, taxes, and laws that made it expensive or illegal to export American jobs.

Reagan also put into the chairmanship of the Fed Alan Greenspan, who openly declared that his most important job as chairman of the Fed was to prevent “wage inflation” – a term which he exclusively applied to working-class people. Greenspan is still preaching that now-discredited and anti-American philosophy he learned from Ayn Rand, in fact.

Having already largely wiped out the ability of a blue-collar single-wage-earner family to have a middle class lifestyle over the past 30 years, Greenspan now wants to go after white-collar workers by eliminating limits on H1B visas for skilled workers ranging from computer programmers to physicians to scientists. The investor class would always be protected, in the Greenspan world, but the working class – regardless of skill level – should always be the working poor.

In September of 2007, in an interview on C-SPAN for Book TV, Greenspan said:

“We pay the highest skilled labor wages in the world. If we would open up our borders to skilled labor far more than we do, we would attract a very substantial quantity of skilled labor which would suppress the wage levels of the skilled, because the skilled are essentially being subsidized by the government, meaning our competition is being kept outside the country.”


It’s shocking that ideologues like Greenspan, Reagan, and Clinton believe this, but they do. And the only way to reverse the past 29 years of Reaganomics/Clintonomics is to tighten up the labor market again. While a great start would be to pull out of our insane trade treaties and begin again protecting American manufacturers, that will take a decade for the impact to be truly felt even if we were to go back to our 1980 tariff levels today.

But providing space for a good chunk of the 16 percent of the American workforce over 55 years old will immediately take us to nearly zero unemployment and dramatically stimulate the economy. Then we can begin to bring our manufacturing jobs back home from China and the other important steps (Medicare For All and Card-Check for unionization) to restore the strength and integrity our nation and national economy once had.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People: A Call To Take Back America," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle Class and What We Can Do About It," and "Cracking The Code: The Art and Science of Political Persuasion." His newest book is Threshold: The Crisis of Western Culture.

[Nalos6]

Ifenough Boomers left the job market, it would even flip the current dynamic of too-many-people-chasing-too-few-jobs upside down, and create a tight labor markets. Tight labor markets drive up wages.

And as wages go up, tax revenues – which are paying for Social Security (among other things) – would increase.

So this kid wants to grab the chemistry set, throw more chemicals in to the mix and make a bet with his buddies on whether it's going to fix the problem or blow us all to kingdom come. I doubt he even crunched the numbers.

Fact of the matter, we're not going to make it out of this depression nice and easy, the US dollar is going to come crashing down like a tower of cards in the next year if we can't keep up our financial obligations without constantly printing new money.

It's better be safe than sorry than wait on some fuckheads in Washington to fix it. Put your savings into tangible commodities (iron, crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminum, rice, wheat, gold and silver) so you can actually secure the wealth you've accumulated.

Hang on, it's going to be one hell of a ride.

[dj4monie]

Ifenough Boomers left the job market, it would even flip the current dynamic of too-many-people-chasing-too-few-jobs upside down, and create a tight labor markets. Tight labor markets drive up wages.

And as wages go up, tax revenues – which are paying for Social Security (among other things) – would increase.

So this kid wants to grab the chemistry set, throw more chemicals in to the mix and make a bet with his buddies on whether it's going to fix the problem or blow us all to kingdom come. I doubt he even crunched the numbers.

Fact of the matter, we're not going to make it out of this depression nice and easy, the US dollar is going to come crashing down like a tower of cards in the next year if we can't keep up our financial obligations without constantly printing new money.

It's better be safe than sorry than wait on some fuckheads in Washington to fix it. Put your savings into tangible commodities (iron, crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminum, rice, wheat, gold and silver) so you can actually secure the wealth you've accumulated.

Hang on, it's going to be one hell of a ride.

These are largely low cost ideas.

We have the highest productivity in the world, along with the least amount of time off, less than 10% has Passports and because they have disconnected SS from Inflation, many Seniors can't afford to retire.

These are mostly adjustments in our labor force, they don't cost much of anything at all.

Reducing the work week to 35 hours would save energy and allow more employees for starters.

More time off would lead to happier productive workers

SS was started so people could retire with dignity. How many retirees do you see as the Greeter at Wal-Mart???

These are ongoing problems and its about time we did something about them and it would increase the amount of available jobs by lowering the retirement age. You also tend to be in better health at 55, than 65 so you could also travel more, do more things, whatever.

Why should I invest in the very thing that crashed the Economy? Sorry but I joined a Credit Union, no Bank will ever see my money again. If No Interest Banks ever came around here, I would use those. This Economy is setup to benefit the top 2% the most and the leftovers to those who can take advantage of it, the next 20%.

That leaves 80% unable to take part in Crash For Clunkers, they make too much for Medicaid, they are preyed on by RTO businesses and the ridiculous PayDay Loan businesses that should be outlawed, its called usury. To put in a term you can understand - Loan Sharking, only I rather get a loan somebody that might break my arm, the interest would be less.

Don't bring money into this discussion, this is about social policy here, not MONEY.

[hippifried]

Being semi-retired already, I'd love to retire fully & start drawing social security immediately. Not going to happen though. Arizona changed it's drinking age from 21 to 18 back in '72, a couple weeks after I turned 21. I figure the retirement age will drop the day after I turn 65. It's a plot, I tell ya!

As for the arguments pro & con: I'm not buying any of it. The math is fuzzy no matter which side of the ideo-political spectrum you come from. In fact, all the economic math is fuzzy. Economists spend all their time trying to explain what's already happening in relation to what happened before, & trying to guess what'll happen next. Out of all the economists in the world, the one who guesses right gets the Nobel prize & an automatic book deal. The rest end up on the talk show circuit. I'm beginning to think that the "law" of supply & demand is just an arbitrary meme that Adam Smith pulled out of his ass.

This shit don't work. Time for a full rethink.

[tslvrnyc]

Want to Stimulate the Economy? Lower the Retirement Age to 55 Now!

by Thom Hartmann
One of the most powerful forms of stimulus we could apply to our economy right now would be to lower the current Social Security retirement age from the current 65-67 to 55, and increase the benefits back to where they were in inflation-adjusted 1960s dollars by raising them between 10 to 20 percent (so people could actually live, albeit modestly, on Social Security).

The right-wing reaction to this, of course, will be to say that with fewer people working and more people drawing benefits, it would bankrupt Social Security and destroy the economy. But history shows the exact reverse.

Instead, it would eliminate the problem of unemployment in the United States. All those Boomers retiring would make room in the labor market for all the recent high-school and college graduates who are now finding it so hard to find a job.

If enough Boomers left the job market, it would even flip the current dynamic of too-many-people-chasing-too-few-jobs upside down, and create a tight labor markets. Tight labor markets drive up wages.

And as wages go up, tax revenues – which are paying for Social Security (among other things) – would increase.

Additionally, these new-into-the-workforce people can then pay off student loans, buy new houses and cars, and otherwise drive the economy from the bottom up. Which will further increase tax revenues further strengthening the Social Security system.

To further tighten the job market and drive up wages (and tax revenues), modify the Fair Labor Standards Act of 1938 – which tightened the labor market and reduced unemployment by establishing the 40-hour work week – to include all hours worked by a person. We could also, like in France, drop the 40-hour maximum-workweek threshold to 35 hours (used by the Mitterrand government to successfully lower unemployment and stimulate the French economy). A final step would be to emulate the rest of the developed world and require by law that every worker get at least two to four weeks a year of paid vacation – further tightening the labor market.

In Uganda, Joseph Okwakoi gets it. He’s the president of the National Youth Council in that nation, a group that has considerable political power (and an affiliated Member of Parliament, the Central Youth Party’s Joseph Kasozi).

Earlier this month, Okwakoi called on Parliament and President Museveni to lower the age of retirement for government workers (the country’s largest employer) from the current 60 years of age to 55. This single act would instantly create about 15,000 job openings in the country, which could be filled by currently unemployed young people.

President Museveni replied that he’d consider it seriously, pointing out that, “The retirement age was actually 55 when we came but because of manpower shortage we put it at 60.” Now that the manpower shortage has eased, wages are falling, and unemployment is rising, he noted, “We shall study it.”

What Joseph Okwakoi understands is that there is a marketplace for labor. When the supply of labor exceeds demand, the price of labor (“wages”) falls. On the other hand, when the demand for labor is at or greater than the supply of labor, the price of labor – wages – increases.

This is the main reason why the labor movements of the 18th and 19th centuries fought so hard against child labor; they knew that if children were removed from the labor marketplace, then the supply of labor (the number of people available to work) would decrease and the price of labor (wages) would increase. And, sure enough, that’s exactly what happened – and it began the creation of a blue-collar middle class.

It’s also why the labor movement pushed for an 8-hour day and a 40-hour maximum workweek. By reducing the amount of labor available from each worker from the average 60 hours a week or so people were working before 1938, the labor market tightened up, increasing the number of people who could be employed and raising wages.

Of course, this is the exact opposite of American labor policy ever since the Reagan/Bush/Clinton/Bush era. Reagan drove down wages by busting unions (which tighten a labor marketplace); declared an amnesty for millions of then-illegal immigrant workers to increase the supply of labor and depress wages (particularly whacking the carpenters and other construction trades unions); and began the process (completed in a big way by Bill Clinton with NAFTA and GATT/WTO) of dismantling tariffs, taxes, and laws that made it expensive or illegal to export American jobs.

Reagan also put into the chairmanship of the Fed Alan Greenspan, who openly declared that his most important job as chairman of the Fed was to prevent “wage inflation” – a term which he exclusively applied to working-class people. Greenspan is still preaching that now-discredited and anti-American philosophy he learned from Ayn Rand, in fact.

Having already largely wiped out the ability of a blue-collar single-wage-earner family to have a middle class lifestyle over the past 30 years, Greenspan now wants to go after white-collar workers by eliminating limits on H1B visas for skilled workers ranging from computer programmers to physicians to scientists. The investor class would always be protected, in the Greenspan world, but the working class – regardless of skill level – should always be the working poor.

In September of 2007, in an interview on C-SPAN for Book TV, Greenspan said:

“We pay the highest skilled labor wages in the world. If we would open up our borders to skilled labor far more than we do, we would attract a very substantial quantity of skilled labor which would suppress the wage levels of the skilled, because the skilled are essentially being subsidized by the government, meaning our competition is being kept outside the country.”


It’s shocking that ideologues like Greenspan, Reagan, and Clinton believe this, but they do. And the only way to reverse the past 29 years of Reaganomics/Clintonomics is to tighten up the labor market again. While a great start would be to pull out of our insane trade treaties and begin again protecting American manufacturers, that will take a decade for the impact to be truly felt even if we were to go back to our 1980 tariff levels today.

But providing space for a good chunk of the 16 percent of the American workforce over 55 years old will immediately take us to nearly zero unemployment and dramatically stimulate the economy. Then we can begin to bring our manufacturing jobs back home from China and the other important steps (Medicare For All and Card-Check for unionization) to restore the strength and integrity our nation and national economy once had.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People: A Call To Take Back America," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle Class and What We Can Do About It," and "Cracking The Code: The Art and Science of Political Persuasion." His newest book is Threshold: The Crisis of Western Culture.

He loses me when he props up Uganda as having an economic model that the US should emulate.

[Mugai_hentaisha]

Can't say it would work

1. Social Security is Broke....or nearing it. if you all of sudden dumped all 55 and 55+ people into that system...it would implode. Why do you think they keep raising the Mandatory Retirement Age? To keep people from flooding the system.

2. yeah we have a gov't mandated 40 hour work week. Most places where people are employed have theirs set at 32 hours a week or less for full time, so your idea is already being implemented in a roundabout way.

However you may be on the right track on the first idea concerning 55 year olds....here is mine "Carousel" you Scifi fans out there should know of what I speak....

[SarahG]

This is the main reason why the labor movements of the 18th and 19th centuries fought so hard against child labor; they knew that if children were removed from the labor marketplace, then the supply of labor (the number of people available to work) would decrease and the price of labor (wages) would increase. And, sure enough, that’s exactly what happened – and it began the creation of a blue-collar middle class.

That's wrong. The heart of the child labor issue in the 19th century (19th since we're talking about the US here) was the fact that employers were hiring children, but not adults because they could get away with virtually not paying the children because they were children who would take any factory job offered to them, even if the pay was virtually non-existent.

Part of the reason why working class families pumped out so many children in our industrialized cities was because until child labor reforms they were the ones who brought home all the money. The dad wouldn't typically be able to find work as easily, and to make up for it he made a dozen kids in factories to equal what would have been his standard pay.

The same basic problem was very much present during the great depression- an employer would refuse to hire adults and make some sob story to justify it like "well if I hire you, since you have a wife in kids I am morally bound to pay you more... which I can't afford, so I'll hire this highschool kid/just out of high school kid who has no family and no real obligations and pay him less." Was there an over supply of labor? Not really, the employers just knew that adults cost more to employ (and in the case of factory work, children were really better employees anyway since their small hands & size made them more apt in working around tight machinery).

Having already largely wiped out the ability of a blue-collar single-wage-earner family to have a middle class lifestyle over the past 30 years, Greenspan now wants to go after white-collar workers by eliminating limits on H1B visas for skilled workers ranging from computer programmers to physicians to scientists. The investor class would always be protected, in the Greenspan world, but the working class – regardless of skill level – should always be the working poor.

That argument doesn't hold. If it is true that we have a labor over-supply, then refusing to issue visas for skilled labor should create a market place shortage that would boost the employment of native American citizens.

[franks]

good points on both sides. I do believe this much, that there should be some form of mandatory retirement. Especially when one is "dispensable" I know that might sound like a bad word to some, but here's an example: 85 year old educator that is no longer making a connection with his student or faculty, yet is collecting top pay. Force retirement, give that job to a 25-year old, pay that person one-third and voila! you've saved 70,000. Another "elevator guy" hired to press buttons and ride up and down elevator makes 60,000. Force retirement, or if he's too young, give him a job where he does some real work and give the job to an 18 year-old who would be more than happy to do it for a third. Also eliminate bullshit titles for jobs in every sector.

[SarahG]

good points on both sides. I do believe this much, that there should be some form of mandatory retirement. Especially when one is "dispensable" I know that might sound like a bad word to some, but here's an example: 85 year old educator that is no longer making a connection with his student or faculty, yet is collecting top pay. Force retirement, give that job to a 25-year old, pay that person one-third and voila! you've saved 70,000. Another "elevator guy" hired to press buttons and ride up and down elevator makes 60,000. Force retirement, or if he's too young, give him a job where he does some real work and give the job to an 18 year-old who would be more than happy to do it for a third. Also eliminate bullshit titles for jobs in every sector.

So you want people making less money? That doesn't make much sense, because having more money means being able to spend more money.

That 80 year old professor getting 70 grand a year is pretty vital to a consumer based economy if he's using that money to treat himself to expensive suits, big luxury cars and so forth. Plus since presumably he is working and can pay for his own health care, its less that we will have to pay for as a country. If he has a nice house, then him paying a big job to pay for that big house is important because it gives his town vital school taxes, and so on.

Which brings us to the big elephant in the room; if we seriously cared about our country's future then we would turn our disaster of a public schooling system into a public education system and fix the numerous problems with it. If we want to be competitive in an increasingly industrialized world we need to get back to pumping out specialists; doctors, scientists, professors, engineers and so on. Simply having more people employed and lowering the unemployment rate is meaningless if most peoples' jobs are crappy jobs. Having more unskilled youths in min wage jobs isn't the answer, we need salary white collar professionals and a strong middle class (because that's the class that's so important when it comes to the basics of the economy; employment and consumer spending) who are self sufficient (not requiring gov bailouts in the form of health care et al).

[rockabilly]

My cousin sells pot , he retired at 39.