Social Security was first proposed in the mid-1930s, as a jobs bill, an answer to the unemployment problem.
In the mid 1930s a California doctor, Frances Townsend, proposed establishing a 2% sales tax on all purchases, and using the resulting funds to guarantee every American over 60 a pension
As you can see below, he saw it as a way end unemployment by getting the elderly out of the work place:
“Retire the aged,” it says, and “put youth to work.” “The Townsend Plan will solve America’s problem of unemployment.” FDR disliked Townsend’s plan, but the plan was so popular he was forced to enact his own less generous bill, which we still have today. At the time it passed, there was almost zero opposition, from either side of the political aisle.
Remembering the bill’s origins frames the modern debate differently. One argument for reforming social security, proposed by Alan Simpson and Erskine Bowles, focuses on extending the age at which people can collect. Life expectancies have increased, the argument goes, so we need to extend the retirement age.
In my own line of work, there are a lot of young Ph.D. out there who would like to see people like me (age 51), and the baby boomers ahead of me retire, and free up some jobs. Extending the retirement age does not help them at all.
It’s also true that while bloggers may be able to work longer, not everyone can: millions of Americans do physically demanding, physically taxing jobs. And it’s not easy to keep doing car repair, plumbing, waitressing, construction, agricultural labor, gardening, factory work or house cleaning after 65. Life expectancy has increased, but the capacity to work into old age has not, not for everyone, and it’s hard to imagine it ever would.
The Simpson/Bowles plan does not raise the retirement age right away–it gradually increases the age at which you can collect social security, to the extent that today’s toddlers will not collect until the reach 69.
But extending the age of retirement amounts to a bet that a larger number of people won’t live to get Social Security, and therefore and will never see the benefit of a system they paid into their whole lives. That is, this proposal is rooted in the hope that many more people will never live to collect. And do I who will these people likely be? The poor, the working class, the less advantaged, who under this plan, will be made to work longer in the secret hope that they will drop dead before they collect.
It hardly seems to be in the national interest to force gardeners, auto mechanics and maids into a painful old age while keeping young people unemployed. This is a case where thinking about the history of the social security bill might help us think about it more creatively today.
What’s also usually missed in the stupid “life expectancy” argument is productivity gains in the labor force. While productivity has increased an annual average of 3-5% over the last fifty years, people sure as hell haven’t started living 3-5% more per year over that time (hint: 4x as long or more).
why must one retire? at the time SS was started life expectancy was 57 years, now it is 77+
65 was picked because it was thought that few would live to that age.
You can start collecting social security whether you are retired or not–the debate is about the age at which benefits start, not the age of retirement. But it’s true that if benefits start earlier, one can retire earlier.
65 was picked because Townsend’s original figure was 60, and FDR thought that would be too expensive. It’s why it’s relevant to see it as a jobs bill–it was intended to retire people 60 and older, to free up jobs for younger people.