I agree with Tom Lindmark. Theoretically, upping the retirement age makes great sense. Practically, however, this would result in greater numbers of older people competing for jobs with younger people. Because the job market has been downsized and doesn’t appear to be getting stronger any time soon, this places a burden on people in all age groups.
And take a look at this chart, and comment by Barry Ritholtz. - Ilene
Some ugly data points, courtesy of David Rosenberg of Gluskin Sheff, in anticipation of Friday’s NFP release:
Employment-to-Population Ratio: Men (25-54 Years)
Courtesy of Tom Lindmark at But Then What
Greg Mankiw posted this chart yesterday.
Here are his comments:
Americans, as well as citizens of many other advanced nations, now spend about twice as many years in retirement as they did a generation or two ago. During that time, they expect the government to provide them with income support and healthcare. Is it any wonder that we face serious fiscal problems?
I hope the president’s fiscal commission makes raising the age of eligibility for these programs one of its main recommendations.
It all makes perfect sense when viewed in isolation but raises the question as to how those who find their retirements deferred are supposed to provide for their well-being.
The unvarnished truth is that older workers have a much tougher time finding jobs. Age bias is a reality. Older workers also have a narrower range of professions in which they can reasonably expect to find employment. For instance, your typical sixty year old male is not likely to be able to physically meet the demands made of a worker in the construction industry. Throw high structural unemployment into the mix and it becomes difficult to discern how those nearing retirement age would navigate a change in eligibility.
I don’t disagree with Mankiw’s suggestion, I just see lots of practical obstacles given the current state of this economy. In as much as we aren’t generating enough jobs to satisfy the demand created by natural population growth, throwing more job candidates into the pool by increasing retirement ages would not appear to be an optimal solution.
Realistically, most older Americans would probably prefer to work if they could continue to find fulfilling employment. At the same time, younger Americans would probably just assume they left the labor force thus opening up more opportunities. The intra-generational issues are not insignificant.
Just one more example of the fact that the only way out of a lot of our dilemmas is to grow this economy. Then proposals like this one have a chance of success. Otherwise, they only serve to solve an issue by creating problems elsewhere.
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