Two weeks ago, the UWT Center for the Study of Community and Society, in partnership with Pierce County Labor Council and Social Security Works Washington, held a forum on campus to discuss the future of Social Security.
The first speaker, Patty Rose, Secretary-Treasurer of the Pierce County Central Labor Council, opened the forum by urging attendees to understand how important it is to protect Social Security. On the state and federal level, talks on reducing the debt are gravitating towards a reduction in Social Security.
“Social Security has not added one cent to the deficit,” she said.
Marilyn Watkins, Policy Director for the Economic Opportunity Institute, gave a brief Social Security 101, outlining the economic reasoning behind why the program does not pose a danger to our economy.
She also told personal stories about how Social Security had been important to her family regarding her own sons whose father died when they were children. Social Security helped them live with security
“The unexpected happens to some of us,” she said.
Prior to social security, the elderly and those who experienced tragedy were forced into poor houses, whereas now the elderly rarely live in poverty.
1 in 4 families have someone in their household receive Social Security; the majority of recipients are retirees. However, some are disabled workers and survivors.
The Social Security Trust Fund did see drastic cuts in the 1980s, bringing changes to the program, such as an increase in payroll tax, that built up the Trust Fund, which is now 3 trillion dollars and predicted to keep growing.
Although it’s a common refrain, Social Security is not going broke, despite the fact that there are currently about three people working for every retiree, and it is predicted to go down to two people.
“It’s an easily manageable problem, if it’s a problem at all,” Rose said.
Technology has increased productivity per person, meaning that, according to projections by the Social Security Administration, beneficiaries will receive higher benefits than they get now in thirty years.
The real problem in the retirement system is that over half of today’s workers have no retirement plan whatsoever. Some have 401ks, but these are often drawn upon for emergencies, and little is left for actual retirement. Social Security ends up being the main source of income for most retirees.
“We could make Social Security better,” Rose said, “We could do it by scrapping the cap, and raising benefits.”
The majority of workers pay 6.2 percent of their wages into Social Security, but only on earnings up to $113,700, and nothing on earnings over that amount. The extremely wealthy pay a fraction of a percentage of their income into social security; “scrapping the cap” would require everyone to pay 6.2 percent into the program.
Famed economist Dean Baker, ended the evening by explaining where the panic over Social Security’s demise originated, and why politicians’ claims that we no longer need Social Security are untrue.
He explained that the industry of people who have committed themselves to convincing Americans that the Social Security shortfall is going to destroy the economy are incorrect, and that they are creating a generational conflict.
“We have a totally dysfunctional retirement system; the only part that works is Social Security,” he said. “Why go after the part that works?”
The media has been reporting over the past few years, about millions in shortfall. However, as Baker explained, many of these numbers are produced by projections into 2100, and have nothing to do with people who are living now.
While there is a shortfall, it would be closed if the cap on payroll tax was eliminated.