Friday, May 13, 2011

Yet another blow for income inequality

The idea of raising the age for full Social Security benefits to something above 66 or 67 turns out to be one more way of transferring the society's goods to the better off at the expense of the less well off. The notion is popular among pundits and some pols -- no wonder, they stand an excellent chance of finding themselves among the winners!

This chart, from The Incidental Economist by way of Matt Yglesias, tells the story. Since 1977, better off male citizens have gained nearly 5 years of life expectancy after living to 65 (blue line). But if you were in the lower 50 percent of earners at 65, you hardly gained a year over the last two and half decades. So raising the Social Security eligibility age is simply a transfer from the poor to the rich from the program's accumulated trust fund.

The statistics sure don't make for a pretty picture of the nation's medical and occupational health system either. Why are life expectancies so skewed by past income? Might this have something to do with less affluent people experiencing intermittent periods without health insurance and a consequent inability to seek medical care? Might they have perhaps worked in more dangerous or less healthy conditions?

Oh well, they're worn out anyway -- no reason to keep 'em alive in old age ...

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