Hullabaloo

Sunday, December 04, 2011

 
By all means cut social security

by digby

Get that spare room ready kids. Grandma's moving in:

The Labor Department’s jobs report for November, released Friday morning, also shows that the number of employed high school graduates actually fell by 187,000 over the last 12 months, while the number of employed college graduates has gone up 1.1 million during the same period.

Nevertheless, readers have pointed out that even among the college-educated, there is one cohort that is still feeling more pain: older workers. More than half of all unemployed workers 45 to 54 years old have been out of work for six months or more, and among unemployed 55-to-64-year-olds, close to 60 percent have been searching for work for more than six months.

People in the older of these two groups are worse off than they were a year ago. The median duration of unemployment rose from 36.6 weeks a year ago to 42.7 weeks this November. The younger of the two groups is slightly better off; its median duration of unemployment fell to 27.9 weeks, down from 30.2 weeks a year ago.

This is happening at a time when this cohort just lost a lot of their nest eggs in the downturn. And this group will be affected by the beltway's favorite benefits cut gimmick, the "chained CPI."

This proposal is anything but a small technical fix. The chained CPI would jeopardize the already fragile economic status of many of the most vulnerable seniors and others dependent on Social Security and SSI as a primary, albeit, inadequate source of income. Adoption of the chained CPI would diminish the core income security benefits promised to every American.

One in three seniors relies on Social Security as 90% or more of their income. Average Social Security income for older women amounts to a little over $12,000 for women and slightly under $16,000 for older men. Small benefits cuts that compound over time will increase economic vulnerability and financial hardship among aging and disabled Americans and most of all for women.

For today’s Social Security recipient who begins receiving benefits at 65, use of the chained CPI would result in a $560 annual benefit cut by age 75. Cuts would disproportionately harm older women who tend to live longer and on lower incomes. For an older woman living on $1,100 a month, the median Social Security benefit, the chained CPI would reduce her benefits by an estimated $672 per year by the time she reaches age 80, $1,044 by age 90 and $1,212 by age 95.

This economic downturn is going to reverberate for many, many years as it is. The losses that people heading into the last part of their lives have experienced are unrecoverable even if they could find work, which apparently they can't. To even contemplate cutting the one guarantee they have to keep them out of poverty in their old age is unconscionable.


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digby 12/04/2011 11:00:00 AM |