What's
Good
About
Social
Security ...
Social Security has dramatically cut poverty among the elderly and
disabled. While about 12 percent of seniors currently live in poverty, without Social
Security, 42 percent would be poor. About two-thirds of the elderly rely on Social
Security to provide over half their retirement income. Social Security is especially
essential since the U.S. does not require employers to provide pensions.
Social Security is progressive. Those who have been paid high salaries
throughout their lives will get a much smaller percentage of their salary replaced by
Social Security than those who have worked all their lives in low-wage jobs. An average
wage-earner retiring in 1997 will get back about 44 percent of his or her earnings from
Social Security. A high wage-earner gets back about 25 percent. And a low wage- earner
gets about 80 percent.
Social Security benefits just about everyone. About 92 percent of people
over 65 get Social Security. It’s a program that working-class, middle-class, and
poor people can all get behind.
Social Security is efficient. Because it is run entirely by the federal
government, puts all the money into one pool and invests it in one place, Social Security
only spends about one percent of benefits on administration.
...
But Other
Countries Do Better
All seven major industrialized countries (Japan, Canada, United Kingdom,
U.S., Germany, France, and Italy) have systems that are, like ours, pay-as-you-go.
Today’s workers support today’s retirees.
Italy, Germany, and France spend 12–14 percent of their gross
domestic product to support retirees. The U.S. spends 6.9 percent. Japan, Canada, and the
UK pay slightly less than us.
In the U.S., the average-earning worker can expect to get 42–44
percent of his or her income replaced on retirement. In Germany, France, and Italy the
rate is 50 percent.
In the U.S., Germany, and Japan, retirement age is now 65. It’s lower
in France, Italy, and Canada. In the U.K, it’s 65 for men and 60 for women. (The U.S.
retirement age is slated to go up to 67 for people born after 1960.)
All the industrialized countries have programs to cover the healthcare
costs of retirees, but American retirees have to pay more out of their pockets than
seniors in the other six countries. Today, U.S. seniors pay a third of their medical costs
themselves.
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