Tag Archives: Social Security

Shortchanging Our Paychecks


Income and benefits for most Americans have stagnated over the past four decades despite steady economic growth.

By Salvatore Babones

Back in the “Happy Days” of the 1950s and 1960s, most young American couples graduated from high school or college, got married, and immediately bought the most expensive house they could afford. They bought their houses on credit, their cars on credit, their appliances on credit, their furniture on credit, and even their baby clothes on credit. They didn’t have credit cards, but they sure did have debt.

Those young families in the 1950s and 1960s were perfectly rational in loading up on debt. It made sense for them to borrow as much as they could because they expected paying it off to get easier and easier every year. Between 1870 and 1970 the median male U.S. income rose on average 2 percent per year. In the 1950s and 1960s it grew even faster, at around a 2.5 percent clip.

In addition to this broad income growth, any individual could count on his or her income to rise with seniority. Add in another 1-percent yearly raise tied to seniority, and a typical American man could expect his paycheck to annually grow by 3.5 percent. Over the course of a 40-year career, he could expect his wages to quadruple — even after adjusting for inflation.

It made perfect sense to follow a “borrow now and pay later when you make four times as much” plan back then.

Today, everything has changed. Median male income hasn’t just stagnated since 1970. Wages for American men have actually declined.

The Baby Boomers kept on buying and borrowing, but many of them learned that one income wasn’t enough to pay their debts. That’s why the proportion of women with children who had jobs outside the home climbed from one in three in 1975 to two in three in 2008. For a while, women saved the American Dream.

Not anymore. Over the past decade women’s participation in the labor force has maxed out. Even if more women want to work, there aren’t any new jobs for them. The situation facing today’s indebted families is bleak. Wages overall are declining. Even if a worker does get a 1-percent annual seniority raise, that’s a 50-percent increase in income over a 40-year career — nothing like the 300-percent increases previous generations experienced. The money just isn’t there.

It gets worse. Young couples now have large debts before they ever get married, often from burgeoning student loans. On top of that, young couples now have to save for their own retirement, since Social Security benefits are far lower compared to national income than they were in the 1960s and private pensions have all but disappeared. And of course ordinary people now have to pay for health care expenses that used to be covered by insurance.

Families today are drowning in debt. Yet the problem isn’t the borrowing. Young families should be able to borrow to buy houses, cars, and furniture. The problem is that income and benefits for most Americans have stagnated over the past four decades.

If today’s young couples were getting 3.5-percent annual raises, didn’t have to worry about spiralling health care expenses and college tuition, and had solid company-sponsored pension plans to supplement ever more generous Social Security payments in retirement, they would have no problem getting themselves out of debt.

That may all sound like a dream. But it’s a dream that used to be reality for the majority of Americans.

It didn’t have to be this way.

Since 1970 the U.S. economy has doubled in per capita terms, after adjusting for inflation. We have the money for everyone to live very well — twice as well as in 1970.

Young families today are struggling because the benefits of America’s economic growth over the past 40 years haven’t been shared equally. They’ve all gone to the very top. It’s time to restore some balance. It’s time to give ordinary people a nice, big, fat raise. Then they could pay their debts on their own, with pride and dignity.

Salvatore Babones is an American sociologist at the University of Sydney.

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Filed under Human Rights, Politics

How To “Fix” Congress (in 8 easy steps)


This was sent to me as one of those “chain” emails. You know, if you pass this on to 20 friends we can change the world. Sorry, I just don’t do the forwarding thing. I did find this interesting enough to share here though. If you enjoy this, reblog it, stumble it, recommend it, or whatever you do to show your approval.    Thanks ~ sekanblogger

1.    Term Limits –  12 years max, some possible options are below.

        A.    Two Six-year Senate terms

        B.    Six Two-year House terms

        C.    One Six-year Senate term and three Two-Year House terms

2.    No Tenure / No Pension 

        Members of Congress receive a salary while in office, that salary ends when they leave office.

3.    Congress members (past, present & future) are to participate in Social Security.

        All funds in the Congressional retirement fund move to the Social Security system immediately.

        All future funds flow into the Social Security system, and Congress participates with all Americans.

4.    Congress can purchase their own retirement plan,  just as all Americans do.

5.    Congress will no longer vote themselves a pay raise.

           Congressional pay will rise by the lower of CPI or 3%.

6.    Congress loses their current health care system….

           and participates in the same health care system as the American people.

7.    Members of Congress must equally abide by all laws they impose on the American people.

8.    All contracts with past and present members of Congress are void effective 1/1/12.  

  The American people did not make the contracts members of Congress enjoy, in fact, Congress made all these contracts for themselves.   

       Serving in Congress is an honor, not a career.   

       The Founding Fathers envisioned citizen legislators,  Congressmen should serve their term(s), then go  home and back to work like the rest of us. NOT AS LOBBYISTS.

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Filed under History, Human Rights, Opinion, Politics

So You Think You Can be President?


Likening Social Security to a Ponzi scheme was the least crazy thing Perry said during the recent debate among Republican presidential candidates.

Donald Kaul By Donald Kaul

 In a country with a functional political system, Rick Perry‘s presidential candidacy would be laughed out of the room.  I mean, really. This is the 21st century, right? It’s the information age.

 Is it reasonable to take seriously a candidate who doesn’t believe in evolution, is contemptuous of  even the possibility of climate change, and calls the chairman of the Federal Reserve a traitor for attempting to help the economy?

It…is…not.

Gov. Perry’s dismissal of global warming is especially ironic. His state, Texas, is in the midst of the hottest weather and longest drought in its history. Fittingly, when Perry led a mass prayer meeting to ask God for relief, God answered by giving him the biggest wildfire in the state’s history.

You might imagine that the “lamestream media” — the aggressive left-leaning press that exists largely in the fevered imaginations of the hard right — would characterize him as a fool and buffoon.

It…does…not.

It considers him a legitimate candidate, a worthy opponent for President Barack Obama. Actually, he’s dumber than Michele Bachmann.

Perry doesn’t get an entirely free pass, of course. Following a recent debate among leading GOP presidential hopefuls, the media got on him (naturally) for his least crazy statement — his calling Social Security “a Ponzi scheme.” You would have thought he’d insulted Nancy Reagan.

(DonkeyHotey / Flickr)In reality, Social Security is a Ponzi scheme, of a kind. It was sold as an insurance program, but it never was. It depends on people putting money into the system faster than other people take it out. That’s classic Ponzi.

But Social Security isn’t the theft kind of Ponzi. It’s one that simply recognizes that younger generations have a societal responsibility to help support older generations. That responsibility is becoming heavy, however.

When Social Security began in the 1930s, there were far more workers than retirees, and the retirees didn’t, as a rule, live all that long. Providing them with a minimal lifetime income was a cinch. That’s no longer the case. We can now see a time when each worker will be supporting a single retiree, who in turn expects to keep driving around in his or her RV. Not going to happen.

My solution would be to raise or even eliminate the cap on payroll tax contributions. That way, a guy who makes $30 million-a-year would pay the same percentage of his income into Social Security as the guy who cleans his office. (I guess I’m just a flat-taxer at heart.) In any case, something has to be done, and we’re not doing it.

Overall, that Republican debate was kind of depressing, inspiring an “Is this all there is?” feeling.

Mitt Romney continued his imitation of the job-seeking teacher who, when asked if he believed the earth was round, said: “I can teach it round and I can teach it flat.”

Bachmann didn’t do much. The rest of them were…the rest of them.

Folks, we’re trying to pick someone who might become the next U.S. president. There’s no sign so far that Republicans actually care which candidate would make the best president. They just want the thrill of a contest. I thought that’s what “So You Think You Can Dance?” was for.

The day after that Republican debate, Obama addressed a joint session of Congress on the economy where he laid out a program that would create jobs, cut taxes, and might do some good.

The Republicans of course were dismissive, even though he promised to travel the country hitting them over the head with their reluctance to provide jobs for workers instead of tax cuts for people who don’t need them.

All of which is fine. But his solution, while welcome, is still too timid. It’s better than nothing but where was this speech and this program last year?

We’ve officially got 14 million Americans unemployed, and the total number of people who are out of work, have given up looking for work, or are scraping by with part-time jobs when they want to work full-time is an estimated 25 million. Yet these guys keep playing games.

None of this would be happening if the news media were still alive.

OtherWords columnist Donald Kaul lives in Ann Arbor, Michigan. – www.otherwords.org

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Filed under NEWS, Opinion, Politics