Social Security, the rich, and the rest of us

December 20, 2010

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BE WARY of people posing as myth busters.

Robert Pozen (Op-ed, Dec. 12) says that it is a myth that Social Security’s benefits are progressive. Why? Because the rich are not like you and me: They live longer and so collect benefits for a longer period of time. This is true, but it is only a small part of the story, since Social Security replaces 90 percent of the wages of low-income workers and about 40 percent of wages for the average worker. The rich may live longer, but their benefits are a lot lower.

Pozen’s memory, meanwhile, seems to be quite short, for just a few paragraphs after bemoaning the shorter life expectancy of low wage earners, he says that we should extend the Social Security retirement age because we are living longer. But demographers can tell him that the bulk of life expectancy gains have accrued to the affluent.

The average Social Security benefit today is $14,066, about equal to minimum wage. Maybe Pozen buys into the idea that we must cut this modest benefit to keep our nation strong. But then again, he seems to like myths.

Norman Stein
The writer is a professor at the Earle Mack School of Law at Drexel University.