An expected 3 million Europeans are preparing to take to the streets in protest next month over government plans to raise the age of public pension eligibility and rejigger how pensions are calculated in a way that will reduce what most people get or would get.
The Financial Times points out that life expectancy is the real issue. In the 1980s, the FT calculated pensioners could expect to spend one-third of their lives in retirement. Now they spend about 45 percent of their lives retired. It quotes Dexia Asset Management's projections that the ratio of older nonworking people to workers will double by 2050. It's retirement planning math that doesn't add up.
The situation in the U.S. isn't much different with any suggestion of Social Security reform meeting with anger and resentment. In a Wall Street Journal/NBC poll last February, 77 percent said it would be unacceptable to trim Social Security at all to balance the budget.
I don't think it's hard to understand why so many of us are opposed to fixing a program that has worked so well. Most of us who are about to claim Social Security or have done so recently have paid into the system for at least 45 years. One of the reasons we think we should get what we paid for is that during those 45 years we have witnessed remarkable changes in the economic well-being of the elderly. Between 1960 and 2010, the poverty rate of those aged 65 and over has fallen from 35 percent to 10 percent.
As of 2010, Social Security paid an average of $13,968 per year to retired individuals, while the U.S. Census Bureau's poverty threshold for people older than 65 years of age is $10,289. Retired couples get an average of $22,704 per year from Social Security, while the poverty level is $12,982. It's not a princely amount of money, but it's lots more than our grandparents -- at least my grandparents -- struggled to get by on.
When we talk about Social Security, we seem to hear mostly from the protestors in the margins. Whether they are advocating a vastly different program or lobbying for large increases in the system, I don't think what they say reflects the opinions of most of us in the middle. If we heard reasonable suggestions for putting Social Security on a more stable footing without radical changes to the program, most of us -- including those who are close to receiving our own benefits -- probably could be supportive. But we have to hear it from people who can explain the changes without ranting and without using the word Ponzi.